A reality check before you start fantasizing about a $200k+ private/out-of-state school

Every decision season I watch high schoolers get talked into an expensive dream school by peers who either have family money or haven't run the numbers. Before you sign, here's what $200k in debt actually looks like. In most cases in-state is the smarter play, but let's use real figures instead of vibes. First, a reality check on loan types, because it changes everything. You almost certainly can't borrow $200k in your own federal loans for undergrad. Federal limits cap a dependent undergrad at $31,000 total and an independent undergrad at $57,500. Parent PLUS loans can cover more, but as of July 1, 2026 they're capped at $20,000/year and $65,000 total per student and that's your parents' debt, not yours, and it isn't eligible for income-driven repayment. So a $200k undergrad balance is overwhelmingly private loans (possibly plus some Parent PLUS). That matters, because private loans have none of the federal safety nets. Everything below assumes a 6.50% rate. 1. The floor: just treading water To keep a $200,000 balance from growing at all, paying only interest, touching zero principal, you owe: 0.065 × $200,000 ÷ 12 = $1,083/month Anything below that and your balance grows. That's your floor. 2. Actually paying it off (private loans) Private lenders don't let you tread water. On a standard 10-year schedule at 6.50%, the payment is about $2,271/month . Over 10 years that's roughly $272,000 total , about $72,000 of it interest. Tempted to refinance or stretch the term to lower the payment? Watch what happens as you push the payment down toward that $1,083 floor. At $1,250/month , only ~$167 goes to principal at the start, so the loan takes about 31 years to clear and you pay roughly $465,000 total — around $265,000 in interest. You'd be paying it into your 50s. Lowering the payment feels like relief; mostly you're just renting the debt for longer. (Note: refinancing usually means moving to a private lender, so if any of your loans were federal, refinancing permanently strips their protections.) 3. The small federal piece and why the old "ballooning balance" scare is outdated For whatever modest portion actually is federal, the rules changed in 2026. New borrowers now use the Repayment Assistance Plan (RAP). Unlike the older plans people love to warn about, RAP waives unpaid interest on on-time payments, so your balance doesn't balloon, it just takes up to 30 years, and any amount forgiven at the end may be taxable (the federal tax treatment past 2025 is currently unsettled). It's slow, but it's not the horror story it used to be and it only applies to the small federal slice, not your big private balance. 4. What this does to your paycheck Starting salary: $60,000 Take-home after taxes, FICA, and benefits: roughly $3,700/month (varies by state) On the 10-year private payment: $3,700 − $2,271 = $1,429/month left to cover rent, food, utilities, transportation, and any emergency. In an expensive metro, that's rough on a salary that looks fine on paper. Stretch to the $1,250 payment and you keep $2,450/month (average rent in Boston is $3400!!!), but you've signed up for 31 years and ~$265k in interest to get there. Pick your poison: squeezed now, or squeezed for three decades. TL;DR: A $200k undergrad balance is mostly private debt with no federal cushion. Done honestly, the math is ~10 years at ~$2,271/month, or ~31 years and ~$465k total if you stretch it out. In-state usually wins, not because prestige is worthless, but because the interest math is brutal and doesn't care about your dream school. Run your own numbers before you sign. Disclaimer: Not financial advice. Loan limits, interest rates, and tax rates vary wildly based on your state, dependency status, and individual timeline. Run your own math with a real loan simulator before making any major life decisions.