. . . It isn't all that bright to take out $100,000 in student loans for a job that pays $30,000 . . .
But here's the catch: The article girl wouldn't have believed that SHE was going to end up making $30,000 a year. She was certain that she'd graduate from THE school, get THE job, and live her dream life -- in short order, thank you very much. 20-year old her wouldn't have believed that 26-year old her would be in this situation. Those things happen to other people!
I suspect few students take out loans knowing they'll be overwhelmed later in life, but many discover too late the difference between entry-level and dream job. Or worse, they can't find a career-oriented job at all and find themselves making loan payments while waiting tables.
I disagree with the idea that student loans are not evil.
I understand about student loans and am fine with taking them out. I have done math with my cousin who owes 100 grand and we figured out that if you make 45k (his salary) you can have your loans payed off by the time your 30. I do not think that's bad. Now, I do know that I may not make 45k right off the bat but still, I am fine with paying student loans. And I know you are going to try to convince me otherwise because I am young and all but you are not changing my mind! I already know where I really want to go (all of the other schools are just backups) and I will pay whatever to go there because that is how much I loved it.
Let's assume he's bringing home 80% of his salary, which for a just-out-of-college worker would be rather amazing (I assume he doesn't have dependants or significant deductions); he'd have $3000 a month, and his loan payments would be almost $1300/month. That's best case scenerio -- the reality would be worse.
Really, I believe no one's going to convince you, but at least read the article about the girl who went to American University. You sound like you're following in her footsteps, assuming everything's going to be manageable.
Schools aren't divided into THE ONE SCHOOL THAT I WILL LOVE and a bunch of other places that I'll hate. Look into lots of them and find one that's BOTH affordable AND well-suited to you. I'll give you an example: My daughter has two "favorite schools" right now -- and they aren't the two I would've predicted when we started talking about college, but they became favorites as we visited, talked to people, and researched. She absolutely loves the college-town feel of School A, loves that they're football-crazy in the fall, loves everything about the school . . . EXCEPT that it's in the mountains, and she doesn't like the cold. If it wasn't for the certainty of snow for several months of the year, she'd be begging me to send in a housing deposit NOW. The other favorite is also a great fit for her . . . EXCEPT that it has no football team, and she really does want the school spirit that comes with that. So which one's THE SCHOOL for her? Both have everything she wants academically, and both have one big drawback. She's probably going to attend one of these two schools; either choice will make her happy, and either choice will be missing something she wants. You're not going to find a school with every single detail perfect for you.
Tuition and fees at the UNC branches are roughly half as much as UVa's. Both of the flagships are in the top 10 in the list just sited. It's really hard to find a private school of similar caliber that can meet the fee -- there's plenty of lesser ones, of course.
I really think our NC schools are something unusual: Our average state school is much better than our average private school. I'm not encouraging my girls towards private at all.
I commend your cousin for living so frugally and planning to do so for the next ten years. A person making $45,000 will probably clear about $32,000 a year after taxes and insurance premiums/copays. That's approximately $2,700 a month clear. When you take $100,000, compound 6% interest annually, you would need to pay $1,500 a month to pay it off in ten years. I don't know many people who can live on $1,200 a month with rent, food, car, commuting costs... I guess no vacations, no boyfriend/girlfriend no kids, no house for the next ten years. Now, if you make $35,000 a year with that same debt load, you can expect to clear no more than $2,100 a month. Minus $1,500 for loan payments and that leaves you with $600 a month to live on for ten years. Good luck.
Real math is not nearly so much fun as fantasy math! Real math makes student loans look like . . . real sacrafice for many years!
I completely agree.
I think what MrsPete says, and I have seen over the years to be true as well, is that in general here the average kid doesn't get the huge scholarships to the privates that are better than the state schools. Most kids don't get into Harvard. Most kids don't get a full-ride to W&L.
In general, the state schools around here are so good that most kids would not get into a private that is better and would give them so much merit aid that it would be less expensive than the state school. Even with hefty merit aid that would put the private in the price-range of the public, there aren't many privates that are comparably ranked. I hope that makes sense. Obviously, it's not all about ranking or even mostly about ranking. But when the subject is discussed, that is the angle from which it's usually being discussed.
Yes, that's what I've seen in teaching high school seniors for 19 years.