Well to do college debt or State school with money in my pocket?

CrockPot's picture
Rank: Chimp | 11

Here is my dilemma: Should I go to a private university that is considered the best in the area or a state school that is fairly regular? If I go to the private school I'll graduate with $15K in student loan debt, If I go to the state school I will be able to graduate with at least $25K in my pocket.

Here's the back story for those who may care. Currently I attend a community college, but I have to transfer in the fall as it's been two years. I am majoring in economics and have narrowed my transfer options to two schools. I live in the NKY area and could transfer to either NKU or Xavier. I don't expect anyone on here to be familiar with NKU on here but it's just basically an average state school, nothing wrong with it. Xavier is a private university and while it isn't an ivy league school it is probably the most prestigious and highly looked upon college in the Cincinnati area by employers.

What I want to do with my life is real estate investing (building a portfolio of rental property). My plan has always been to work a 9 to 5 in my 20's after college and use a good portion of my paychecks to kick start a RE portfolio that I can concentrate on fully in my 30's through the rest of my life. I have a college fund of about $15K and my personal money I have made through working and investing of about $20K. I figure that if I go to the state school by the time I graduate I'll have at least $25K which is a great amount to get started with in the local market. If I go to the private school, I'll have to contribute my money in addition to my college fund (I'm getting a good scholarship from X) leaving me with $15K in debt upon graduation. I'll also have to transfer with about a semester less of credits than if I go to NKU, but I feel as though I could take extra classes and summer classes allowing me to still graduate on time at XU.

I know $15K isn't a lot of debt to graduate college and I could probably clear that in a couple years of my first job. But I don't think I would continue to pursue my RE dreams if I take that route. I don't want to look back and regret not becoming my own man and building my own business in my 20's when I'm old. At the same time, I don't want to look back and feel like an idiot for not going to the best school I could get into and being able to get a good job straight out of college.

Also, I already have a small home that I inherited so that isn't something that I will need to worry about when I get out of school either way.

I know this may seem like a privileged problem to have but I just want to make the best decision possible.

I'm not sure what I did to make the second paragraph look like that but I can't seem to fix it.

Comments (8)

Apr 22, 2018

If your goal is to stay in the Great Lakes area, then even if you worked from 22-30 at a regular 9 to 5, how much money are you going to reasonably save? Average yearly income of say 75k, saving maybe 20k a year (50k take home - 30k in living expenses) x 8 years = 160k?

If I was 20, had 35k in cash and my house paid off, I probably would have foregone school and started RE investing immediately.

I would think that in a part of the country where the average house is probably sub 250k, you could easily leverage your current house add it to your 35k and start a flipping operation.

Now, that would take a fair amount of work to get started and be good at it, but if that is your plan at 30, then why wait?

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Apr 22, 2018

My goal is to stay in the Cincinnati area, but I wasn't planning to wait until I'm 30 to start investing in RE. I planned on investing while working through my twenties. So, while your number of what I could save is fairly accurate it would be compounding year over year as I would be investing it rather than just saving.

Also, yes the $20K I have now plus the $15K I have in my college fund adds up to $35K but my parents aren't going to give me that $15K if I quit school right now. Also receiving my house in my name is basically dependent on getting through school so dropping out isn't really and option. Additionally, next to all my bills and living expenses are being covered by them while I am in school and if I dropped out of school I'd be own my own as far as living expenses go. I have two options go to the state school or the private school.

Average cost of a house in my area is about $200K so $20-25K would be a good start (I actually plan on starting with houses in the $100K range). But I'm going to need a job and a year or two work experience to get a loan. Additionally, I don't plan on flipping as the market here isn't rapidly going up like in LA. I want to build a portfolio and focus on cash flow for long term wealth, rather than doing deals, so I don't have to work a 9 to 5 beyond my early 30's.

Apr 22, 2018

Hmm...so what are you thinking on the 9 to 5? Are you wanting to work in RE as well as invest after school?

The thing about RE is that unless you are targeting a major REPE fund, then education is less important than experience and networking (assuming that you just aren't a complete idiot). You should be fine with going to the state school and networking with EVERYONE you can find that is in RE (alumni are the best way to start, but being a part of your local investors club, ULI, etc. is also very good).

Also, I hate to break it to you, but loans for SFR/1-4 unit investment properties aren't as easy to get as as regular loan for your personal residence. You usually have to put down 30-40% for conventional financing. If your intention is to not flip houses, but try and build a long-hold portfolio, then you are going to have to save for a couple of years at minimum before you purchase your first house.

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Apr 22, 2018

How about you simply ask the private school to give you more money or you can't afford to go? I did that with my UG and they gave me an additional $10k year scholarship.

Or go to the private school and go part time while working?

More than just two options.

Apr 22, 2018

I am working part time. How would I go about asking for more money? Should I just call my adviser and tell her I can't afford to go?

What should I say if they tell me they have already met my financial need? Which is true atleast as far as FAFSA is concerned, my EFC is 18K and their scholarship plus financial "aid" loans brings tuition down from $39K to 18K.

Apr 22, 2018

Go to NKU, or like TNA said, try and corral extra scholarship money. If you're trying to get into RE, school shouldn't be the driver. You can easily network your way into a RE role as they often focus on fit and soft skills over education. While in school I suggest taking finance, modeling, and argus courses. Also, make sure to reach out to school alumni that work in RE, they love to help students and are always looking for interns/new hires.

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Apr 22, 2018

Honestly this is what I am leaning towards at the moment but my decision changes by the hour lol. I've already tried to passively push for more financial aid by meeting with a financial aid adviser and asking her about my EFC (which somehow has tripled from 5.5K to 18K over the last year) and mentioning that I am the child of a single parent but she didn't really seem to care. I guess I could try to talk with my transfer adviser who is much more helpful and tell her that I can't afford to go. Either way though I do plan on interning and reaching out to alumni. My minor is finance as well.

Apr 26, 2018
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