Situation Overview:
- Child accepted to several elite Liberal Art schools (very proud of her)
- One immediately off the table because $400k total undergrad tuition
- Next school gave $25k/year scholarship, out of state, so no at home living
- Household income roughly $200k
- $25k college savings account (makes me feel a total failure as a parent)
Details:
- $90k/year tuition (including room & board)
- $25k scholarship
- $65k/year after scholarship
- $260k total 4 year degree cost
Financials:
- $65k annual costs
- $9k student loan available at 7% for 15 years
- $56k parent loan available at ~9-12% for 15 years
And for the full 4 years it seems terrifying.
- $260k total costs
- $36k student loans = ~$325 monthly payment for 15 years
- $224k parent loans = ~$2,700 monthly payment for 15 years
————–
Student desired jobs include academia (college level) or high niche roles with average salaries ranging from $50-90k in HCOL major metrics. Most prefer or require a masters degree (so assume another $120k to $180k on top of this).
The ROI for the total school loan and cost vs. the target job isn't there.
Child is devastated to have done the extremely hard work to get accepted to these prestigious and low acceptance rate schools (< 10%), but now might not get the opportunity. L
ocal state school or community college feel like failures. They could allow for future grad school, but they are not in a desired metro/geography for the aspiring career roles. Offer limited connections and opportunities; however, still considered a quality school.
As a parent I don't know what to do…
- I know that we have a good income/life and a chance my earnings could increase
- Behind in our 401Ks, not catastrophically, but now is time to catch up
- House is affordable (~3% mortgage rate, < $1500 month in major metro)
- Child feels like dreams are completely slipping away
- Spouse feels like we have let our child down if they can't go
Spouse wants to take the loan and says we will figure it out.
I do not want to take the loan and am terrified that making this investment for our daughter to pursue her dream will cripple us financially, put an extremely low margin of error for the next 20 years, and basically eliminate any chance of retirement. Including a possible risk of losing home.
———————
Who has taken loans like this to support their child for arts like degrees with dream jobs that have annual salaries of only 20-30% of total loan cost?
Cosigning for new high school grad on very high cost loans (> $250k for all 4 years) for liberal arts degree
byu/Legitimate_Yak_9063 inStudentLoans
Posted by Legitimate_Yak_9063
46 Comments
lmao.
bro, that’s how much a medical school degree costs for a doc that will be making 300K 5 years out of school. your kid wants to take the same amount of debt to be a teacher.
you need some dave ramsey in your life.
This would be financial suicide for you and your daughter. She needs to change schools and majors. You can’t have your dream life if you don’t earn enough to live.
Please don’t do this.
I was in the same position as your kid. I went to the state school and it was totally fine. I was a bit disappointed but ultimately understood the financial aspect.
Hi! If your daughter wants to keep going after undergrad (e.g., potentially accumulate more loans, although I’d recommend a fully funded PhD, if she is interested in academia), undergraduate institution doesn’t matter as much. Yes, your daughter will be sad right now and feel like her college application process ‘was a waste’. But debt is really really overwhelming too. I think sadness in the short term is much better than your whole family having this debt hanging over them. I have numerous anecdotes to share about this but the TLDR is that institution doesn’t nearly matter as much as we think, debt is probably equally if not more stressful than ‘settling’ on a lower tier school, and you & spouse are amazing parents even if you do not go into debt to make your daughter’s every dream come true. College prices are so out of control, and your future matters too. A happy mom (assumed you were mom here, but can insert ‘dad’ or ‘parent’, editing bc realized I assumed :)) is more important IMO than her undergrad institution, even if she doesn’t see that for the next year. (Your spouse sounds like a lovely and doting parent for what it is worth – but your joint happiness and retirement matters too!)
It would be irresponsible of you as a parent to co sign this. The people who go to these schools are either poor and get significant financial aid or their parents can write the check. If your kid can get into an elite private school they can get scholarships at state universities or small private schools
You said “ocal state school or community college feel like failures.” I get why you said this. When we were coming up in high school, the kids who went to junior college were unmotivated slackers. But you need to shift your paradigm on this point. Things are different now.
Nope. You have a budget and then your kid can take out the normal federal loans that everybody takes out $27,000. That’s your budget that’s where you live. Life isn’t fair and lots of kids every year don’t get to go to their dream school. This is a good time for your kid to learn that you need to live within your means and that you can’t have everything that you want and put your parents financial well-being in jeopardy. And the other side of the coin is this is not setting a good example if you do do this.
Taking $350k loan and out of it $150k is private loan for medical school and still scared whether I‘ll be able to pay that off in 25 years with my at least $300k salary. Absolutely do not take this amount of loan for undergrad or even grad school. I am also a graduate from an elite university with a science degree in nyc and job market was horrible.
No. No ‘elite’ school is worth this. This is financial suicide for both of you. It also shows them that its totally ok to bankrup yourself for school. Which it isn’t. This is so stupid it feels like ragebait.
Truthfully, the main benefit of those prestigious schools is the name brand and possibly the networks that they connect you to. Many public state schools are classified R1, which is still quite prestigious.
Academia is a rough road unless a business major, which is the main path that a PhD actually pays well enough to live above poverty line. Having said that, one’s graduate study need not be the same as the undergrad, and your child can do nearly anything with any degree, so long as they finish.
What our hearts desire in high school can be very different in 5-10 years, and going to school out of state can be rough. At least look into in state schools as a Plan B to see how their reputation and costs compare.
Right after high school I went to Tulane. I thought it was my heart’s desire but it wasn’t. I wish I had taken the in state full ride I was offered, rather than excessive student loans.
Stupid is as stupid does🤷♂️
Dont do it. You can get the same degree for 20k to 30k local college.
My child wouldn’t be speaking to me after hearing me laugh so hard at this scenario.
Absolutely not. All of this should have been considered prior to applying. Too late now, but your daughter needs to start making adult decisions.
I knew some people in college whose parents applied for a job at the local liberal arts school so that they could go for room and board only. Not sure if that is even an option in this scenario, but it’s at least a different suggestion than you are getting.
Otherwise, you’d be crazy to do this.
Jfc.
“Student desired jobs include academia (college level) or high niche roles with average salaries ranging from $50-90k in HCOL major metrics. Most prefer or require a masters degree (so assume another $120k to $180k on top of this).”
This statement right here means that a very expensive degree to get this outcome would be consumption spending, not investment spending. It does not sound like your finances support this kind of consumption, therefor it shouldn’t happen. $50K doesn’t even require a college degree and $90K doesn’t justify anything other than a good state school. I hope that by the time your kid get there that graduate programs have dropped in price because the ROI on many of those is terrible as well.
Send her to Europe. Much cheaper for a college degree there.
Please give the name of the schools and what sort of jobs she is planning to do. No point in trying to be vague here. Are you talking elite like Ivies? That will open doors. Otherwise no, not worth. And again, are you talking about high end finance jobs like investment banking in a HCOL area? Be more specific if you want help
Bruh those interest rates are insane
And RIGHT HERE is the great dilemma. People be taking out a QUARTER MILLION dollars in loans to get a degree that will hold NO VALUE and serve NO PURPOSE in the real world.
Next post will be from OP in five years saying their daughter can’t find a job, and how unfair it is because they weren’t informed of the loans’ terms, they were preyed upon, and they can’t afford to pay the loans back.
Elite colleges also offer majors that *do* pay or increased admission chances to law, business, or medical school. Basically this child needs to find a plan they are willing to live with and go for that.
If their dream job is really a 50-90k future job – something that you can get with various 2 year programs in trades or medical from a community college – they need to pick a school where the math checks out.
If it’s one of those : “college level academia, you need to have gone to an elite school and then we’ll maybe pay you 90k a year after a post doc” positions : no. Those are scams and essentially careers for the idle rich.
You keep talking about your “child’s dreams slipping away” first of all calm down, they’re either 17 or 18, they will survive. Secondly think of all the dreams that will 100% die when they’re paying 3k a month for decades on a sub 100k year job. They won’t be able to afford kids, a house, nice cars, a social life. They may be able to afford their new SSRI prescription to help with the crippling anxiety and depression.
Do not sign you and kid up to be debt slaves for life. For the love of god, don’t chase the “prestigious” schools at the cost of your life.
i’m not sure what they wanted to major in but I see commenters referencing that it might be teaching/being a professor. If that is the case, please know that having an undergrad is pretty useless, if you want a job in a good paying school district you need a masters or doctorate. Ergo, you should be looking at their education in terms of the cost of the entirety of it
All the hard work they did was for themselves not to “get into said fancy school”. They will thank you in 10 years for not letting them make a life long mistake.
Holy moly. No undergrad school is worth taking out 260k in loans! How many redditors are going to ask this over and over again. You would be a fool if you did this, especially because you don’t even earn 260k/yr to repay it. These expensive private schools are predatory. Ask every redditor who has taken out this much whether they would do it again if they had a redo…almost every one says no unless they are earning between 300-600k/yr. You owe to yourself and your daughter to find a school you can afford. You cannot afford this…period.
If your spouse wanted her to have her dream school why didn’t you save more along the way? You had the funds to do so. I know you can’t go back in time, but you didn’t do it then so why do it now? These loans are ridiculous. There are better options out there.
One thing is what state do you live in? Is there anything where community college is free or discounted? How is the local state colleges? No liberal arts degree is worth that much student loans with no guarantee of making that much or getting a job at all. I have two liberal arts degrees, went to a cheaper state school and still have $100,000 because of interest. Tell them you’ll buy a new car if you they go the CC route or a cheap car and facilitate a state college degree. Private liberal arts schools are not worth that much at ALLL.
Prestigious schools are bullshit if she’s not going for specific law or engineering degrees. She needs to match her expected lifestyle to the school.
Honestly this would be dumb to pay for even if you did have the cash.
Look at it on what the cash could be used for instead. You could help her with a down payment for a house, you could pay for a study abroad during undergrad. You could help purchase a freaking car. Angle toward that over the “missed” opportunity that a prestigious school offers.
The best time to plan for this was 18 years ago.. but at this point you’ve got to stand firm. There is no guarantee that the student will finish the school or get the dream job, they could be working at Target or Starbucks. In fact I’d have them start that right now to help pay for whatever college they can afford.
The fact is that you can’t afford this. Hopefully the narrative with your kid wasn’t “all you have to do is get accepted” but also “if you don’t qualify for student aid we can’t afford those schools.” There is a student loan epidemic right now. And a parent plus loan epidemic riding on it.
I teach at a liberal arts school so understand that a community college/local state school is not going to provide remotely the same educational experience. I also know many of them give really good need-based financial aid. Are there no other options besides these two schools because a gap year and applying to some with better financial aid/getting money to help offset costs might also help. Not what you want to hear, but the alternative is you or your child takes out nearly $300K in loans.
All that said, $50-$90K is not that high in a HCOL area if that is a ceiling and unlikely for a starting role if the school’s ROI is low. How good is the alumni network?Do graduates get jobs immediately?
Academia will pay pennies. Even as a tenured professor the pay is not great relative to corporate jobs not to mention the extra years of schooling.
A master’s, in my opinion, is. It worth taking out loans for. Your child either waits until they have a job that will pay or until they can pay the bill each semester (even if they go part-time).
NO
Do not do it. My parents helped me take out 60k in private loans and I feel like that it too much. I only just recently was able to refinance the loans and have my parents name removed from the loan.
Your child should really reevaluate what they want to do and go to an in-state school. If they’re is a school close enough where they can live at home, that would be ideal. These schools charge so much money for dorms.
$260K to maybe make $50K in a HCOL area where rent could be 2/3 of this kid’s take home pay? Dude… it’s time for some real talk about how much the world costs with your kid.
If her long term goal is academia, she shouldn’t be getting a liberal arts degree. She should be getting a relevant degree in the sector of academia she wants so she can then get a masters and even a PhD in it.
Liberal arts degree is quite worthless, especially if the goal is academia – academics want specialists in their field, not generalists.
No way. Please dont do this
First of all, I am sorry- this sounds incredibly hard for all involved.
Would your child be entering into a career path that would make them eligible for Public Sector Loan Forgiveness? Because that may be a pathway to getting loan forgiveness in 10 years. But I think you make an important point that has to be considered:
“The ROI for the total school loan and cost vs. the target job isn’t there.”
As a person who took out a boatload of loans for my Master’s of Social Work- I personally understand the mismatch. And I think that you are correct to be resistant to the idea of compromising your financial future in service to a first-rate degree for your daughter. There are other options available to her and although they may not be “dream” options, they will still leave her in a position to pursue the Master’s degree she will likely require down the line.
There are 2 futures/pathways that must be considered: your and your husband’s financial future and your daughter’s educational/career future. And I think compromise is necessary as you consider both, but the compromise shouldn’t come at the expense of one group’s future. In your daughter’s case, going to the local/affordable school will not compromise her educational/career future because she will likely require a master’s, and can put her efforts towards securing a position at a more prestigious master’s program if that continues to be of importance. However, in you and your spouse’s case, taking out a boatload of loans to fund a tier-one degree (when a tier-two degree is sufficient) DOES have the potential to compromise your financial future, leaving you tied to massive debt during prime earning years. Instead of preparing for retirement, you’re funding an education that is not affordable for your family. And I think for that reason, you are justified in looking at the point of compromise as being at your daughter’s school choice and not at you and your husband’s choice to take out loans to fund her education.
I think in 20 years, when your daughter is paying bills and has an eye to her own financial future, she will understand your position. But right now, she can’t empathize w/it, and that’s understandable. I think it’s your job to help her cope with the disappointment of shifting expectations. It’s an opportunity for her to better understand that she is part of a family unit, and sometimes decisions have to be made that prioritize the health of the entire unit over the wants of individual members of the unit. For your part, you and your husband should stop beating yourselves up about not having more saved. $25,000 is a good chunk of change; you’re not gazillionaires, you’re working people and $200,000 ain’t what it used to be (look at an inflation calculator for what that was equivalent to in 2000). You clearly want the best for your daughter, but what will be best for her ultimately is if her parents are in a secure financial position and can be of assistance to her throughout her adult life, rather than being financially indebted to a degree that simply isn’t worth it.
If her prospective salary for a +$250K degree (+/- $120-180K for masters) is $50-90K .. I mean, what are we doing here? That’s a big no. That’s a huge investment failure on both yours and your child’s part.
What about potential grad school? Medical school? Masters? Some other professional degree? If your child has $200k in loans from undergrad alone, they will be locked out of any opportunity to get an advanced degree. Can you imagine paying another $300k for medical school? Now you’re looking at $500-600k in debt, that’s wild to imagine.
I’d be more concerned that you’ve let your child down in the sense that they would even want this. As some others have said, allowing this isn’t really supporting your child. They need to understand money.
Merit awards are part of the deal with these schools. It should have been understood that those were essential all along. Just getting in without sufficient aid is too costly. I’d suggest having that real talk with your child now along with a little faith that they’ll be able to understand, and that will ultimately be better for your entire family and your daughter’s future.
It’s time to take another look at options with the financials front and center.
This is complete financial suicide for all parties involved.
You absolutely should not be taking on this debt or facilitating your child’s pipe dream.
There is no undergraduate degree that is worth this much.
You also can no longer even borrow this much in parent plus loans thankfully so it’s a non starter. Private loans are even worse.
You haven’t failed as a parent for not being able to pay 6 figures for a *undergraduate* degree with no ROI.
I’m more concerned how the hubby isn’t backing you up. I think the elite school name is clouding judgement. I’m sorry, OP, because you have both you daughter (who doesn’t understand) and your hubby (who should understand) against you
What discussions were had with your spouse and child leading up to this! I don’t understand how expectations were so off. She won’t be able to pay those off, so make sure you understand what you will be paying. The job landscape is changing a lot and as you get beyond 40, layoffs and age discrimination are a real possibility.
There is no way I would sign in for this. The whole “dream school” thing is just setting kids up for disappointment – either because they can’t afford to go or because it makes adult life feel even worse by comparison when they finish 4 years in their dream environment and then have to go pay the bill.
I allowed all 3 of my children to go to good schools in New England. Right now i owe $478,000 for parent plus. I will never be able to pay it off. Dont do this. Her brain at 18 is still maturing and she has NO idea what crushing debt does to people. It is awful and since i have an english degree i can tell you. We dont get jobs.