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<p>People in this section talk about "debt" like it's the worst thing ever. Yet I don't see how it can be a big deal to have $60,000 or even $100,000 of debt if, ten years after you graduate, you make even $80,000 a year (which isn't difficult for someone who graduates from a top school).</p>
<p>So, people who have actual experience with significant "debt," I'd appreciate your advice. Thanks.</p>
<p>I think people are advising against graduating with substantial amount of debt because you aren't going to be using a big chunk of that theoretical 80k a year to be paying back your 100k debt.</p>
<p>think of it in reverse -- read all the threads of parents making $150,000 a year who find it a stretch to pay $20,000 a year for their kids to go to college. These are people who already own cars, houses and have assets.</p>
<p>Now -- if they find it hard to pay that, why would you think that someone just out of college would find it easy to pay off $100,000 of debt with less than half the income?</p>
<p>AnotherAngryTeen - </p>
<p>You know - life just doesn't always turn out the way you dream. Somewhere along the way stuff just happens.
Not every grad gets their "dream job" making the big bucks. Some new college grads want grad school and that adds more debt.
Most want to strike out on their own and have to suddenly make car payments, rent, utilities, cable TV, internet, cell phones, vacations - all while saving for a house, their own retirement and investing.
It adds up. Throw in the love of your life, the desire to raise a family and then the debt becomes a burden.
That $200 - $400 per month of college loans stays with you long after college - often into the birth of your children and your third career! That is money you won't have to spend, invest or save.</p>
<p>Not only that - if misfortune should strike and you find yourself in real financial trouble - educational loans are not dischargable with bankruptcy. You eventually have to pay and pay dearly.
It's enough to make AnotherAngryTeen turn into AnotherAngryAdult.</p>
<p>I went to an Ivy League school and lived after graduation with a houseful of Ivy League grads who were all working at entry-level jobs, probably $12-15/hr in today's dollars. Yes, some people in my class became investment bankers right away, but the majority went to grad school or lived like grad students for at least the first few years. I make a lot more now but the idea of being 80,000 in debt is truly frightening. You can't discharge student loans in bankruptcy.</p>
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Yet I don't see how it can be a big deal to have $60,000 or even $100,000 of debt if, ten years after you graduate, you make even $80,000 a year
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<p>You don't get to wait 10 years before you have to start paying. You don't get to wait until you have a good enough job to pay. You get a reprieve for 6-9 months after you graduate. Payments can be delayed if you go on to grad school, but your borrowing will increase as well. You will be accruing interest on most of the loans from the day it is first borrowed.</p>
<p>Figure out how much you will borrow each year.
Figure out the total amount you will owe, including interest, when you have to start paying back the loans.
Figure out what your monthly payment will be.</p>
<p>At this point you will have some idea of what the impact of $60K, $80K, or $100K will be.</p>
<p>Understand that no one in the entire college/lending domain has much reason to say "don't do it". They all gain by having you borrow money and they will have no sympathy if you have trouble paying it back. If you don't set limits for yourself regarding how much to borrow, no one else will. That's why you need real numbers based on realistic scenarios to guide your decisions. This is true whether borrowing for college or a car or a house.</p>
<p>The person I know that makes the most out of college is my nephew who didn't have loans and who received an aeronautical engineering degree from an in state public university.
He makes about $60,000 a couple years out of college.
His current job is going around to college campuses and recruiting & his minority status as well as being a native spanish speaker probably aids him on campus.
Of course he has two kids, as he got a young woman pregnant when she was still in high school, so I can't say he doesn't have a lot of expenses.</p>
<p>My daughter who graduated from one of the top academic LACs in the country, makes so little she can't afford a car or new clothes, however she is happy and doing what she enjoys.
She doesn't have huge loans, she doesn't ask us for money, but basic living expenses are a much larger portion of her budget than they were when I was her age.</p>
<p>She doesn't have any peers that went into business per se- although one did start an organization in Brazil to help street children, but that is hardly going to be a big money maker ;)</p>
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It's enough to make AnotherAngryTeen turn into AnotherAngryAdult.
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<p>This says it all! Debt in today's economy is so incredibly risky. Don't do it.</p>
<p>Significant debt on top of paying a mortgage + a child or two, child care, gymnastics,baseball </p>
<p>Oh I shudder the thoughts of making 80K a year and having to pay that amount of debt and have a life. Aint happening.</p>
<p>Just wait till you go back for your 10 year high school reunion -
you are still paying college loans because you consolidated them and went for 20 years, you are married, with a child or two, still renting, no vacations, driving a 10 year old car ---- then you see some kid who graduated with you and went to community college for two years, paid his way through and transfered to the state U - went part time worked and took 4 years to get his degree. He graduated at 24 but has a great job has been able to sock money away, drives a nice car, just bought his first home with his lovely spouse and a baby on the way......
Then you will seriously wonder why you spent so much money going to that "Tier 1" college that you could not afford.
If you don't think this will happen to you - think again - happens all the time.</p>
<p>You will, however, have a nicely framed "prestigious" diploma hanging on the wall.</p>
<p>And I bet JustAMomOf4 and all these other bored, sanctimonious housewives have no personal experience with college debt. Thanks for trying to help; I'll find out for myself, since you can't realize that I want to know the truth, not something you heard from Oprah.</p>
<p>This board is good for something, though: it made me realize that the people who promote things the most zealously usually don't even know what they're talking about. People who actually have experience don't bother zealously promoting what they see as common sense.</p>
<p>I finished undergrad with little debt; my spouse finished law school with maybe $10k? $15k of debt. This was back in the old days, where interest on one's subsidized student loans didn't start up until you finshed school. But two years after I finished undergrad, we had a total household income of about $80k a year, and we bought our first house, taking on over $100,000 of debt. So you're right, having that much debt isn't a big issue in terms of being able to afford to service the debt. However, if we'd had $60k in student loans outstanding, then we'd have had close to $200k in total loans to deal with, and that would have been very difficult, if not impossible. </p>
<p>I was also contributing to my employer's tax-deferred retirement savings program. Starting to squirrel away retirement savings early on, and allowing compound interest to do its work, means our retirement savings are in good shape. Doing this AND paying a mortgage AND servicing major student debt would have been even more difficult.</p>
<p>You're welcome, AnotherAngryTeen! Good luck on your quest for the $80,000 truth!!!!</p>
<p>I graduated with about $25,000 in debt (in 1982 dollars). I got a good job, consolidated my loans when it looked like interest rates would never go lower than 13% again. I finished paying my loans about 5 years ago. I always called it the "mortgage on my education."</p>
<p>Yes, it's made life more difficult, and limited the amount I could save for my daughter's college education, as well as for my retirement. And AnotherAngryTeen, please realize that 10 years out of college you very well may not be making $80K per year. I graduated from a top school well over 10 years ago, have been steadily employed full-time in the workforce since graduation, and don't earn $80K per year. </p>
<p>If you want to dismiss me as a "sanctimonious housewife" feel free. I feel that the debt I took on was worth it, and I did pay it. However, other than my student debt and the mortgage on my house, I had no other consumer debt - no car loans, no lines of credit, credit cards paid off in full each month. If you think you can also live like that, then maybe even $100K isn't too much debt. However, if you also intend to have consumer debt, it is extremely easy to get in over your head very quickly.</p>
<p>AnotherAngryTeen - don't shoot the messenger. You obviously know not of what you speak. Don't ask the question if you can't stand the answer.</p>
<p>FYI - I absolutely have actual experience with college debt and so do my kids. I have had a kid in college for 7 years in a row now - I have heard it and seen it.<br>
Don't take my word for it - do your own research.</p>
<p>There is also a point to made that, in many cases, taking on significant debt just isn't necessary. The real value for that money just isn't there in many instances. So why do it? It hasn't been proven, at least not to my satisfaction, that the most expensive schools reliably deliver any tangible experience or education worth the cost differential.</p>
<p>With the attitude and energy you're exuding, I don't see anyone hiring you for $80k a year anytime soon.</p>
<p>finaid.com has a loan calculator that you enter your loan amount and interest etc and it shows you payments</p>
<p>FinAid</a> | Calculators | Loan Calculator</p>
<p>So just purely from a numbers point of view. For a debt of $80,000 at 6.8% interest the monthly payments would be a little over $900 for 10 years and they recommend a salary of 110k. Remember out of the recommended 110k (if you can earn that right out of college) income you will also be paying a hefty chunk of taxes as well as rent, utilities medical insurance etc etc. You may want a nice car and nice vacations. Perhaps get married - have a family? The debt will certainly limit your options for several years. And are you guaranteed to earn 110k right out of college?</p>
<p>The calculator also assumes you have either subsidized loans and/or have been paying the interest while you are in school. If you have to capitalize the interest on the loans while you are in school this would increase the amount of debt you start off with when you complete school. For instance borrowing 20K a year unsubsidized at 6.8% and capitalizing the interest would increase your debt to @ $94,556 at the end of 4 years of college. This would increase your payment to nearly $1100 a month with a recommended salary of $130K.</p>
<p>(this is based on a simplified calculation that if you borrow $20,000 in year 1 the interest in year 1, assuming a 6.8% interest rate, would be $1360 so at the end of year 1 you owe 21360. Borrow another 20,000 at the beginning of year 2 then the interest for year 2 is 6.8% x 41360 = 2812 so your debt is 44172. ANother 20K at the beginning of year 3 your interest for year 3 is 64172 x 6.8% = 4364 so your debt at the end of year 3 is $68536. Borrow another 20K at the beginning of year 4 and your interest for year 4 is 88536 x 6.8% = $6020. So at the end of 4 years your $80,000 you have borrowed has already grown to $94556. There are probably tables out there that would give you a more exact figure but this gives you an idea).</p>
<p>Is the 4 years worth that amount of debt to you? Only you can really answer that. You will be paying for those 4 years for at least the following 10years. Good luck with your decisions.</p>
<p>Also remember, an $85k salary does not give you $85k of spending money. There are Federal Taxes, State Taxes, Medicare Taxes, and Social Security Taxes. They can add up easily to 40% of your salary. That would leave the $85k salary reduced to about $51k take home.</p>
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And I bet JustAMomOf4 and all these other bored, sanctimonious housewives have no personal experience with college debt. Thanks for trying to help; I'll find out for myself, since you can't realize that I want to know the truth, not something you heard from Oprah.
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<p>I just don't even want to go there. However, for those of us lucky enough to have graduated without debt, many have been able to save enough for our children to do the same. One of the best gifts a parent can give their child(ren).</p>
<p>I do have to say that in my generation, if a student went to his/her state flagship university, it was possible to earn enough money during the summer to pay tuition, fees, room and board. Of course, that was working 60 hours a week for the entire summer. That is not hardly possible today.</p>