Nelson wrote:But I don't think your original post actually helps much other than to show that there are some people who are better off taking a full ride. Sure, but those people are only better off assuming outcomes are equally likely. And they aren't. The argument for HYS in most cases is that the placement outcomes are better and that their LRAPs help mitigate the increased debt to some extent. If you start from the assumption that placement is equal (as you do in your OP by setting out three equal scenarios), then obviously the free option makes better financial sense.
This is definitely a better explanation of what you're trying to say. As I've said before (as early as my second post), HYS is a terrific option for those interested in prestigious PI, which, while still a bit unicornish, are certainly far more obtainable from Yale than from, say, Berkeley. Placement is clearly not equal, and I did try to account for that fact in OP; though that was definitely not the point I was trying to make.
The problem I have, and I think you'll agree with me, is where an OP starts a thread that says, "I have a full ride at Penn and I was accepted with no financial aid at Harvard, I want to be an AUSA, what should I do?" And at that point, someone will undoubtedly come to Harvard's defense with "You don't have to worry about debt, because exceptional LRAP!" I don't contend that Harvard may in fact be the better choice based on hypothetical-though-frequently-not-OP's goals, but I think it's only fair to properly represent the situation in question, especially when there are so many posters actively misrepresenting the school's LRAP program.
NYstate wrote:Why are you assuming the Michigan grad has zero debt but won't have the same savings at other schools? Most full ride people still owe debt for COL.
I did address this earlier -- if it makes you feel better, you can give the HYS person the same 40k-ish in COL savings. Now instead of being 250k in debt, you're only 200k or so. Since you're obviously not going to pay even 200k off in ten years on a PI salary, the question still remains -- do you use HYS LRAP and have the debt forgiven by the school, or do you use PAYE/PSLF and have the debt forgiven by the feds? One thing is for sure, you wasted 40k of your savings because there is literally no difference in outcome between 250k in forgiveness than 200k in forgiveness.
On the other hand, it makes sense for the Michigan grad to pay off all his loans ASAP because he almost certainly would
be paying off the entirety of his loans with a standard repayment plan. So why borrow money you already have at 8% when you have it sitting in your bank?
This raises a factual question on my part - do LRAP iterations or IBR/PSLF take personal savings into account? I've never heard that, so my guess is no, but it clearly impacts your ability to pay.
Harvard does for sure, as I pointed out in OP (obviously not tied to PSLF), I wouldn't be surprised at all to find out Yale and Stanford did as well. Some PSLF-tied LRAPs, notably NYU, won't let you participate in their LRAP if you have in assets more than the amount your loan. So if you have 300k in the bank, and 280k in student loans, they'll tell you to pay your damn loan.
According to the FSA glossary, (found here: http://studentaid.ed.gov/glossary
), partial financial hardship does not seem to take into account preexisting assets.