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What is reasonable debt for a student to incur during undergrad?

Ame E.

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We are not talking pre-med kids... One is a music student and the other is academically talented, but undecided in her major... (they are both seniors)... Trying to figure out what amount of loan is reasonable over 4 years... We of course are hoping for full scholarships for one or both of them... but it may not happen..



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It is a really personal decision and families decide about this in a lot of different ways.



:iagree: And for us, it varies by the student and their plans too. In general, I'm looking for 20 - 30K total (for 4 or 5 years total, not each year). But, for us that also includes knowing my kids, what their plans are, and how likely they are to succeed with their plans or other similar financial types. It also depends a lot on the college they are going to, but so far, we've been able to select colleges with a good track record of placing graduates with my guys' majors.


Youngest might be a little different since his planned job is not a high paying one. I'm on the fence with how much I'm comfortable with and have decided to just wait and see what happens both with our finances and his college acceptances/packages two years down the road.

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As little as possible, obviously. But, in the real world, alas, some degree of student debt is hard to avoid. When CollegeMan was accepted at several schools, the financial aid package from most did not cover enough - his (and our!) debt would have been too much for a then History major. When he decided on a science major (now Chemistry after toying with Bio) it seemed more feasible that he would be able to pay off his debt. He is taking out the maximum for the school he is at (a LAC, which gave the greatest amount of merit aid vs. total cost) while we are taking out no loans, although we are paying almost $16,000 each year. The local state schools would have cost MORE than that (our EFC is higher than what we ended having to pay the LAC) - CollegeMan is at a LAC as he won top merit awards everywhere he got in. He ended up at the financially best option. Luckily it turns out to have a stellar Chem. Dept and he is already, as a sophomore, doing research for a professor.


The next kid in line is going to the local CC. She aims only for a two-year Marketing certificate at this time. She did not care to do the work to earn the grades/scores to win a merit award anywhere, so CC it is. If she pulls herself up, grade-wise, she may yet get some scholarship to help her move on to the local state school if she so desires. We will see. The youngest kid it is too soon to tell which of her older siblings we will take after.


I did the local cc, etc. bit in my day - then went a bit to a state school,, than a LAC, then UCLA, then Northwestern - by which time I had a student loan. I was a film history major and it took FOREVER to pay off that loan!


Hubby had no loans at his LAC - but had $20,000 loans to cover grad. school...he paid it off the same year CollegeMan started college! He might have paid it off sooner, but we had twins, one of them had autism, and any extra money went towards therapies, not to paying off student loans faster!


I would NOT take out all the loans possible unless the student is heading into a potentially lucrative field. A friend's dd has gotten tons of loans to pay back - but she just graduated with her four-year nursing degree, so they have no fear of her having trouble paying it off! The next girl is studying media - so the parents are trying to help her keep costs down. The last girl wants to study fashion- the parents are rolling their eyes and hoping she changes her mind.

Edited by JFSinIL
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It's not a good idea to borrow more than the student can get through Stafford loans. For dependent students, that amount is:


Freshman year - $5,500

Sophomore year - $6,500

Junior Year - $7,500

Senior Year - $7,500


So, that's a total of $27,000 loans for the student. I highly recommend aiming for fewer loans for folks who aren't heading for solid earning careers.


Parents could take out additional loans (PLUS loans or line-of-credit on their homes, etc.) if they are eligible and feel comfortable with the amount of loans they are taking.



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Don't forget about income based loan repayment where your payment is capped at a percentage of income, with the balance discharged after 25 years.


Also, there is a loan forgiveness plan where the student loan balance is discharged after 10 years (120 payments) for people in certain public sector jobs.


These programs wouldn't be a reason to take on additional debt, but they might encourage someone who needs loans to attend college to go ahead and pursue a fulfilling, but lower paying, job.

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