College Tuition Example?

Question

I am going to a private university next year... $45,000 for one year's tuition!

let's say i get the tuition down to $25,000 per year... meaning for four years (to get my BBA) it will cost 100k.

Is this practical?

If it costs me 100k out of my own pocket...

how can i pay it off if I have no money to start college with.

I will have a job either on campus or in the nearest mall (min. wage at starbucks or a small food franchise)

but is there a certain loan i should get if im going to use half my monthly paycheck to pay off monthly loan bills?

and is it reasonable to say after i graduate, i will have 30k of debt? (after paying off little by little, month by month throughout college?)

What is a typical interest rate for this?

i dont understand how i'm supposed to pay for college after financial aid is taken out and all that stuff

Answer 1

College is a lot more expensive than expected.  The costs of living alone, with Cell phone, internet, rent etc. bills really add up.  I worked 30 hours at 9 dollars and hour and that just covered my living expenses.  Since school is your number 1 priority, you may just want to take out a loan and work less.  Your grades will reflect that decision, I'm sure.  (I will never work again during a full semester).  You better be going for a field that is in demand, because private schools are so much more expensive-- often times they aren't even worth it.  There are some good websites to get loans (salliemae.com) but Obviously first fill out your FAFSA to see what sorts of loans you can get from the government.  Those rates are usually lower.  All my student loans are at about 7%, with two cosigners.  Always get cosigners, it can reduce your interest rate by up to 10%!!  I'm set to graduate in the fall, and I'll have about 40k to pay off in loans-- but it is going to be totally worth it!     Just get into a good field!  Good luck!

Answer 2

Private universities are all well and good, for those who have folks that can afford them.  No employer is going to offer you a higher salary simply because you have a private college education.  Often those who graduate with huge debt from private schools are delayed in "getting on with their life" after graduation because of crushing debt after graduation.  (my brother in law is in this situation).

A couple of things to ponder about your plans:

You said, "say I get this down to 25K a year"... why exactly would the school do this.  this is a risky (and costly) assumption.  My experience is private schools are more than willing to reduce your tuition (to hook you in) your first year or two, but by the time you are a JR  and Senior and it's too late for you to transfer, you'll be paying full price with no (or very little) scholarships or tuition reeducations.  Not to mention the work you'll have to do each year to get the tuition reduced by over HALF.  

Second, 100K is only practical if you can even obtain financing for it.  (federal student loans have yearly borrowing limits -  and for good reason).  Also consider if you will be able to afford to pay it back when you graduate.  If you are going to school to be a teacher then NO - 100K is not practical.  Borrowing 100K is a 1,000 a month loan payment. You could not afford that on a teachers salary.  (Never borrow more than what you would expect to earn your first year out of college.  This ensures you can afford the payments).  Teachers make about 25K a year.... if you are to be a teacher for example, don't borrow more than this and you'd be okay.

Third, Student loans are set up to where you don't make payments on them while you are in school.  Minimum wage jobs aren't going to be enough to make ANY payments to them while you are in school... no matter how good your intensions are.  It is not realistic to think you could pay off 70K of debt while your in school.  

Federal student Stafford loans are 6.8 %.  The MAXIMUM dependent freshman can borrow is 3,500 a  year.  It goes up to 4,500 as a soph and jrs and srs can borrow 5,500 per year.

Private student loans are EVIL and should be avoided at all costs.  Interest rates are in the double digits, not to mention you will have to pass a credit check and get a cosigner.  Consider a cheaper college as a fall back.

Hope this helps!!