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This was my situation. I did not qualify for federal loans as a result of my parents income and assets. They did not help me pay for school, therefore I was stuck taking out private loans.
This is a common misconception, but unsubsidized Stafford Loans (and Parent or GradPLUS) are available regardless of income/assets.
So you wouldn't have benefited from any grant or subsidy, but there were federal loans available to you unless you weren't eligible for some other reason (citizenship, drug conviction, selective service non-registration, etc.).
Now, the rub is that Stafford loan eligibility by itself typically isn't enough to pay for the cost of an education. That, and/or the unwillingness to give data to the feds, are very common reasons for choosing non-federal loans over federal.
In response to a post further up-thread - Subsidized (no interest while in school or other deferment) loans are still available to undergrads, but not to grads. So anyone getting an MBA would not have that option today, regardless of demonstrated need.
This is a common misconception, but unsubsidized Stafford Loans (and Parent or GradPLUS) are available regardless of income/assets.
So you wouldn't have benefited from any grant or subsidy, but there were federal loans available to you unless you weren't eligible for some other reason (citizenship, drug conviction, selective service non-registration, etc.).
Now, the rub is that Stafford loan eligibility by itself typically isn't enough to pay for the cost of an education. That, and/or the unwillingness to give data to the feds, are very common reasons for choosing non-federal loans over federal.
In response to a post further up-thread - Subsidized (no interest while in school or other deferment) loans are still available to undergrads, but not to grads. So anyone getting an MBA would not have that option today, regardless of demonstrated need.
When I applied for financial aid, I was not offered any federal loans. I filled out my FAFSA as required, submitted all the necessary paperwork and was still told no. I now receive federal loans as I only have to report my income and my husbands income.
This was my situation. I did not qualify for federal loans as a result of my parents income and assets. They did not help me pay for school, therefore I was stuck taking out private loans.
Your parents made so much income that you didn't qualify for ANY student loans, yet they didn't help you AT ALL? They didn't spend a dime on your school?
Unless you had a whole houseful of siblings making it difficult to keep things equal, this kind of selfishness makes me mad.
I make a good wage as does my wife and my kids all qualified for some federal student loans. We paid for half of each of their college tuitions and expenses. They either received scholarships, worked, or borrowed the rest. I did it this way to not saddle them with decades of debt, yet they still had skin in the game. It really wasn't that big of a sacrifice on our part.
With our kids still qualifying for some federal subsidized loans, it's apparent your parents made even more than us. I'll never understand some people.
Your parents made so much income that you didn't qualify for ANY student loans, yet they didn't help you AT ALL? They didn't spend a dime on your school?
Unless you had a whole houseful of siblings making it difficult to keep things equal, this kind of selfishness makes me mad.
I make a good wage as does my wife and my kids all qualified for some federal student loans. We paid for half of each of their college tuitions and expenses. They either received scholarships, worked, or borrowed the rest. I did it this way to not saddle them with decades of debt, yet they still had skin in the game. It really wasn't that big of a sacrifice on our part.
With our kids still qualifying for some federal subsidized loans, it's apparent your parents made even more than us. I'll never understand some people.
This is accurate. They didn't understand why I needed to go to College since they were successful without it so they felt no need to help me pay for it.
It may be more financially sound decision in this market not to dump that much money into your student loans and put those funds into retirement accounts instead. Your bank account will thank you when you retire to front load your retirement accounts vs putting money into low interest loans. Having 40 years to grow 50K, assuming no other additions to that account and your balance will be 1,086,226.07. Take the same amount and only 35 years you are looking at 739,267.21. That is a big difference when your loan interest will only be about $10,500 during those 5 or so years, maybe.
I know. I would have had a ton of money if I went that route. I had over $200,000 in loans (doctorate in medical field), and I'm currently at right around 50k. I really hate debt though, even though I'm aware that that's not considered by some to be practical financially. My plan was to do as much as I can right away to get out of debt, and I'm almost there. I just bought a house with cash however, so I had to take a couple months off of pounding away at the loans; that should be able to resumed in August barring any unforeseen events. That's another thing with me and debt. In my mind, you never know what's going to happen. I should have a job, but that's no guarantee. I actually moved a couple years ago to a place where the business I was working for closed down! Now that was scary and I was glad I didn't have loads of debt hanging over my head (was around 95K at the time. Know that sounds like a lot to most people, but it would have been much worse if I hadn't been doing what I had been doing!) and had lots of money saved. So, it just depends on the person, some are more open to risks.
It may be more financially sound decision in this market not to dump that much money into your student loans and put those funds into retirement accounts instead. Your bank account will thank you when you retire to front load your retirement accounts vs putting money into low interest loans. Having 40 years to grow 50K, assuming no other additions to that account and your balance will be 1,086,226.07. Take the same amount and only 35 years you are looking at 739,267.21. That is a big difference when your loan interest will only be about $10,500 during those 5 or so years, maybe.
You don't know that the interest rate is that low. Furthermore your math is wrong because the $10,500 should be compounded as well.
1. How long did it take you to pay it off?
2. While paying for it how much did it impact your ability to go do fun things, buy things like new toys/clothes etc.?
3. Do you think for the amount you paid it was worth it?
It took me fourteen years and there was great celebration when it was paid off. That thing was like a millstone around my neck.
The whole situation - going to school, two part-time jobs, a husband who worked long hours and raising two children with as little babysitting expenses as possible WAS our family life. That's what we did and who we were. It wasn't like there was some other life out there that we were supposed to be living but couldn't because of our choices.
It never stopped us from finding inexpensive things to do for fun and our kids grew up to be great appreciators of nature. They both know how to entertain themselves without huge expenditures of money. And they know what it means to work hard and to save for what you want.
I had a separate account for the kids' wants and needs and it's honest to say that they usually came first before my husband and me. They also had one pair of very generous grandparents who made sure they had the "right kind" of tennis shoes, etc. I don't believe in conspicuous consumption but I do remember how important those things were to school kids.
I don't regret it at all although at the time I had concerns whether I was making the right choices. We're retired now and reaping the rewards of our self-discipline.
1. How long did it take you to pay it off? The first one took a few years and the same for the 2nd.
2. While paying for it how much did it impact your ability to go do fun things, buy things like new toys/clothes etc.? Yes.
3. Do you think for the amount you paid it was worth it? Yes, in life we have to learn sacrifice and that we cannot always have nice things, you get other rewards.
I am also fiscally smart so even though for many of those paying off years I made very little money I made sure and paid the minimum plus the interest or 5-10 bucks extra, otherwise it does not add the interest in and it take forever to pay it off.
To avoid large debt for later in life only take the loan amount you need-not the amount you want. Like I worked pt and never took more than 2500 each time. Don't think you can take it all-live sorta large and then pay it all back later-recipe for disaster.
1. How long did it take you to pay it off?
2. While paying for it how much did it impact your ability to go do fun things, buy things like new toys/clothes etc.?
3. Do you think for the amount you paid it was worth it?
1. My student loan debt was modest and paid off in 10 years.
2. Due to being a modest loan it did not affect my budget a whole lot, especially as my salary grew.
3. The ROI on my education is fantastic. A decade after my first post-college job my salary had nearly tripled.
That was the story of my student loan debt, which was modest and from a local public university.
My wife's debt is a whole different story. She went to a small private liberal arts college.
Her debt:
1. She has been out of school for I believe 8 years and there is no end in sight to paying the debt off.
2. It absolutely affects our budget in a negative way. It is an albatross we are working to pay off and when we finally do there will be a whole lot of celebrating.
3. Her debt was absolutely not worth it. We are talking about $60k worth of loans for a liberal arts degree. She received a lot of terrible advice from her parents when she was a teenager who absolutely encouraged her to pursue this. They were terribly irresponsible with finances and educated her to be the same way. She seriously regrets her choice of schools. Please note that I'm not saying it isn't fair or whining that we got screwed like some people do. She made a bad decision and we are living with the consequences. We are paying off the debt and not blaming government etc.
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