<p>Is this too much? I will be graduating from a private school, having to pay about 20K per year in loans. So I will owe around 80K when I graduate with my Bachelor's. I was hoping to go to graduate school, but I feel like I have too much debt to take on more. Should I work with my bachelor's for a while first and pay off some debt?</p>
<p>Anyone else with a similar amount of debt? Advice?</p>
<p>Im considering incurring the same kind of debt because I want the opportunity to attend the school I truly want to be at.</p>
<p>Sent from my SPH-D700 using CC App</p>
<p>Depends. What’s your degree in? How much can you earn working? What kind of graduate degree do you want? In what field are you planning to end up?</p>
<p>$80K of debt if you can work as an engineer for a few years before going back for a Phd in engineering is different from $80k debt if you are a philosophy major with an acceptance to your state medical school (for example).</p>
<p>AS a rule, I would say that is too much debt. The kids I know who owe that kind of money are in trouble and stressed out as are their parents. They are not even making enough to keep themselves afloat much less pay the interest on the debt, and forget about the principle payments. Why don’t you figure out what your monthly nut is going to be? It’s not as though most kids have a nice big fat job waiting for them when they graduate. You have more needs, most likely. If your lucky enough to get a job, you have to get the clothes and props for it. Finding a job usually requires some money too. If the job is not within a commutable range from free room and board, you have to get a place to live lined up too. My son’s first year costs out of college were about half to fully what college costs. </p>
<p>I’ve given an example of my friend’s daughter many times. She owes $90K and can’t even get full time hours at a coffee shop. Her parents are in no shape to help her and she and the mother are stressed out since they do owe on some private loans that the mom cosigned. There is no way, she can even pay the interest owed on her loans, and she is deferring what she can. That is a huge debt for a 22 year old to have started with when job hunting, and her degree is not going to help her land any big time jobs. The area where they live is depressed and jobs are at a premium even at $8 an hour. It’s a bad situation.</p>
<p>$80k is too much for most people to take unless there are some truly extenuating circumstances. You can go to a local school, commuting from home, working part time and owe a quarter of that at most. I would investigate those options.</p>
<p>That is too much debt even for an engineer (and I come from a BIG engineering family).</p>
<p>What is your major and future career? </p>
<p>What are your other school choices? </p>
<p>Remember…the DREAM is the career, not the school. Don’t ruin your DREAM by burdening it with big loans (that you’ll be SICK of by the first year of payoff.)</p>
<p>Many majors should not borrow more than $30k. Some should only borrow $20k or less. Some with highish starting salaries might be able to get away with borrowing $40k. Anything more than that would seriously negatively affect your post-school life.</p>
<p>Engineers start out making about $50-60k per year (if lucky in this economic climate). As a single person, you’ll be taxed heavily on that amount. You’ll also have to pay rent, utilities, food, clothing, car, car-related expenses (gas, insurance, repairs), cell phone, cable, entertainment. </p>
<p>The payments on a loan that large would be about $900 per month. That’s like 3 extra car payments for 10 LONG YEARS. I do not know ONE young engineer who can afford to pay 3 EXTRA car payments (in addition to all of his own expenses and possibly a REAL car payment).</p>
<p>Ask around…ask newish grads if they can afford to pay 3 extra car payments in addition to their own expenses. They’ll look at you as if you’ve lost your mind.</p>
<p>Have your parents said that they would co-sign those big loans? If not, how would you get them? </p>
<p>Do you know if your parents would qualify to co-sign them EACH year? Some parents can qualify for a year or two, but then they can’t…then the student has to leave the school and finish their degree at a local public. And…then…their degree is not from the “dream school” at all…but they have a lot of debt from that school.</p>
<p>I think you should determine how much you will actually owe by the time you graduate (including any capitalized interest), how long after graduation your first payment would be due, and, most importantly, approximately how much you will owe each month.</p>
<p>Then you have to ask yourself:</p>
<p>How much will I have to pay every month? For how many years? What happens if I can’t pay?</p>
<p>What will I be doing after graduation? Will I be working? If so, in what field? Am I likely to find a job quickly enough to begin repayment of my loans? Will I be able to afford my loan repayments while supporting myself/paying rent/eating/commuting, etc.? </p>
<p>Will I go to graduate school? If so, will I have to take loans for grad school? What would be my total monthly repayment amount after grad school (including remaining undergrad loans)? Can my undergrad loans be deferred while I am in grad school? For how long? Will interest accrue on my undergrad loans while I am in grad school?</p>
<p>Until you answer these questions, I recommend holding off on taking out $80k in loans for undergrad. You need to understand the immense financial obligation you are undertaking. Once you understand, and if you still feel that it is worth it, then you consider taking those loans. </p>
<p>In my opinion, the circumstances warranting taking that amount of loans for undergrad are limited. Taking $80k in undergrad loans is a decision that will affect your life for up to 15 or so years after you graduate.</p>
<p>I already have 18K in loans, for my first bachelor’s degree (in Biology). I cannot find anything I want to do with my degree, and have decided to go to an accelerated nursing program (one year program leading to BSN). The program is 52K (so total for both degrees = 70K). Once I graduate, if I can get a job as a nurse I will make about 45K a year (before taxes). I estimate post-tax amount to be around 3,000.</p>
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<p>Post-tax amount of income or loan repayments?</p>
<p>Who is going to co-sign the loan?</p>
<p>I estimate post-tax amount to be around 3,000.</p>
<p>what does THAT mean?</p>
<p>Sorry, I meant 45K per year, about 3,000 per month after taxes. </p>
<p>I’ll have a family member cosign.</p>
<p>So, you’re saying that you’ll have income of about $3,000/month after taxes? Does that take into account the amounts you’ll have to contribute to your medical/dental/vision health insurance?</p>
<p>If so, how much would your student loan repayment amount be/month?</p>
<p>How much will you have to spend on rent, commuting, cell phone, cable, internet, food, sundries (shampoo, toothpaste, etc.), medical visit co-pays, prescriptions, etc.? After you’ve paid everything you have to pay to live, will you have enough left each month to make your student loan payments? Will you have anything left over?</p>
<p>Using a very simple loan repayment calculator that I found online (I am not attesting to the accuracy of the calculations), if the term of your student loans is 10 years, the principal amount is $80,000 and the simple interest rate on the loans is 6.8%, you would be looking at approximately a $920/month payment. Over ten years, you will pay almost $30,500 in interest, and make cumulative payments of over $110,000. </p>
<p>Each of the online calculators that I looked at suggested that you need an annual salary of at least $110,000+ in order to support this level of loan payments ([FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org)). At an annual salary of approximately $73,500, the finaid website suggests that you may “experience some financial difficulty”. It would be up to you to determine what $920/month for 10 years of your life would mean to you.</p>
<p>Sally - thanks for running the calculator for me. 35K in interest does seem like alot, but that’s if I pay the 900 per month, right?</p>
<p>The average salary for where I want to work is around $4,000 per month for a new-grad nurse. After taxes, employee insurance, etc - it comes out to about $3,000 per month. So that is my total gross.</p>
<p>So back to the loan calculator - I don’t plan on paying the minimum payment of 900 per month. I would pay closer to $2500-$3000 per month toward the loan.</p>
<p>That does not make sense - You will not be able to pay $3,000/mo if your take home pay is $3,000 - What will you live on?</p>
<p>I would also carefully look at the job situation. In our area, 18-24 months ago nursing jobs were easy to find in our area. Now 2 of the major hospitals are on hiring freezes and 1 experienced lay offs. I know 4 who graduated and passed all testing in January. Only 1 has found full time employment. Another is working at a doctor’s office for MUCH less than the hospitals pay.</p>
<p>Have you looked into getting a job with your Bio major at a hospital who may have tuition reimbursement?</p>
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<p>Are you certain that your take-home salary would be that high? Are you adding in state and local taxes? FICA (Social Security) and Medicare taxes? Those take a nice bite. I’m concerned that you’re underestimating your total payroll deductions.</p>
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<p>So, am I correct in assuming that you’ll be living at home with no expenses? No car, no gas, no auto insurance, no commuting, no toothpaste, no lunch? If you can do that than you would be ahead of the game. Typically, student loans do not include any prepayment penalty.</p>
<p>Longhaul - the area I live in is still hiring nurses. Definitely not at the rate they used to, but the hospitals are still hiring. Also - I didn’t know I could work in a hospital with my biology degree. I would love that if I could, but what sort of job could I apply for?</p>
<p>Sally - I used an online calculator that asks your state, filing status, etc. If I make $4,000 a month, I take home around $3,000 after taxes:</p>
<p>Salary Paycheck Calculator
Your Pay Check Results</p>
<p>Monthly Gross Pay
$4,000.00</p>
<p>Federal Withholding
$556.25</p>
<p>Social Security
$168.00</p>
<p>Medicare
$58.00</p>
<p>New York
$195.39</p>
<p>NY SDI
$2.60</p>
<p>Net Pay
$3,019.76</p>
<p>Does having the government keep 1/4 of your paycheck seem like not enough?? I feel like taking home only 75% of what you make is ridiculous enough - you’re saying it might be more than that?</p>
<p>As for expenses - I will have very little. My family (thankfully) is paying my cell-phone bill, car, and car insurance. I am living with the person I am in a relationship with, who is very very supportive of my career choices and agreed to pay all bills, food, etc so that I can put my entire paycheck towards student loans and pay them off quicker.</p>
<p>You’ve made a great start on thinking this through. Believe me when I tell you that when you add in federal, state, local (if you’ll be living and working in NYC you can take another few percent out of your paycheck), FICA and Medicare taxes, taking home 75% is great. I take home a much smaller percentage of my salary than that (though I am in a higher tax bracket many years into my career). You will have to pay for health, dental and vision insurance, and it is difficult to predict what your monthly contribution will be without knowing who your employer will be. </p>
<p>You are in a very different position than most in that others are planning to pay all of your day-to-day expenses for you. Just remember that if that situation changes at any time, you would likely be faced with some very serious financial constraints. If you go to graduate school, depending upon the nature of your loans, they may be deferred while you obtain your degree. However, typically, interest will continue to accrue during any deferral. You may want to consider working while you obtain your graduate degree.</p>
<p>Well the $4,000 a month estimate was after paying employee health benefits, etc. It was an estimate based on what other people in the area who work the same job tell me they make after all that, but excluding taxes, so I added in taxes.</p>
<p>If it makes it seem less crazy, the average salary once I complete my graduate school education (2-3 years) is $157,000.</p>
<p>Why are you going to a $52,000 private school for Nursing? You should have much less expensive programs available at public universities. Whatever qualitative difference there may be between your private school and a public option will be negated by the fact that you’ll only have one year’s experience at the private, and you really won’t be there that much with your clinicals to attend.</p>