Money problems / dillema

Paying for College
1

<p>Hello all,</p>

<p>I have some fear that I am setting myself up for a bumpy road here. Let me try to explain my situation:</p>

<p>I am a 24 year old living on my own in Chicago. I currently pay $1150 per month for a one bedroom rent that the lease will end April 2015. I was making good money, but decided to step down to go full time at school and focus on my physics degree at UIC.</p>

<p>I had planned to go part time - 24 hours a week, and had a strong financial plan to make it through my lease. </p>

<p>MY schooling will be paid for by loans. The school itself is awarding me a very low amount of money (loans) and I will have to compensate a few thousand dollars per semester through either personal money or more student loans through a different medium.</p>

<p>MY dilemma is now that I have my courses registered for Fall I am finding that I will only be able to work 16 hours a week in the Fall/spring. This would disrupt my plan and i fear that I will be running extremely low on funds either just before my lease ends or at the time which would make it that much more difficult to find a place.</p>

<p>I have a few questions:</p>

<p>1) Loans. I suppose they help with everything. But realistically, how bad am I setting myself up here? I am looking at three years of college at a tuition rate of roughly $18,000 per year. This would be around the $54,000 mark for school. I am hoping in the long run that I will earn scholarships, grants, and so forth to narrow that down closer to $40,000 or so by the time I have my BS in physics.</p>

<p>I do hope to go further and get my Masters which will add on to it, but is this 'normal?' Is it normal to be in debt somewhere closer to $100,000 by the end of things?</p>

<p>Should I be looking at using some loan money to help me through the end of my lease? </p>

<p>Basically, I'm very unknowledgeable to being in this situation and I'm not sure what to expect when I take out these massive loans to pay for school (and POSSIBLY part of my rent). I still think I can justttttt scoot by my rent at the end of this lease.</p>

<p>And I'd rather NOT break lease as that seems to have problems written all over it. </p>

<p>Any guidance is appreciated.</p>

2

<p>Any chance you can convert the living room to a bedroom and get a roommate?</p>

3

<p>Yes. You are heading for trouble, most likely. You are taking out way too much in loans, IMO. My suggestion to you is to work as many hours as you can and go to school part time for this year so you borrow as little as you possibly can get away doing. Then when your lease is up next April, you should find a room share for about half or even less than what you are paying and downsize your life style. Full time students who don’t have parents or other money sources paying for their apartments don’t live in high rent places. Grad students live in the student slums and eat ramen for years. that’s the life you should be setting yourself up for. Frankly, getting a terminal masters in Physics makes no sense to me. Get your degree and look for a PHD program that would pay you some stipend and give you some tuition remission. You will still be a poor grad student those years of studies but you won’t owe mid six figures for the honor of living that way. </p>

<p>Seriously, look at the prospects in extra earnings for your investment. Bear in mind that these schools are businesses looking for money from you. Your school gave you NO money. You are borrowing money to pay THEM. Please look at it from that perspective.</p>

<p>My son’s girlfriend is borrowing $40K to get her masters as well as living very very tightly while she works on the program. Her advanced degree pretty much will guarantee her a good paying job given the type of work she will be seeking, the demand for those so certified and the pay levels, but even then, it’s going to take a while before she realizes the gains that her “investment” is buying her. But she has NO other loans. You are looking at borrowing this amount, and more for your bachelor’s degree. You have to have the math to go into physics, Do the numbers and do them conservatively, not optimistically, but realistically as to what the payback of all of this. </p>

4

<p>Doubtful. I could go out of my way to get a roommate, but at this point that would do little good. I’d rather go out of my way to find someone to take over the lease IF i went that route.</p>

<p>I’m looking for more information on the loan situation, in particular. </p>

5

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<p>Thank you.</p>

<p>I am prepared to live in slums and eat ramen. This is of no problem to me and I already lead a highly efficient lifestyle towards saving money. </p>

<p>And yes, beyond my BS/MS I would hope to seek a PHD program. This to me is too far down the road at this current time, but yes, I do plan on exploring those options.</p>

<p>Your post serves a great use to me, thank you for bringing up these concerns/comments for me to consider. </p>

6

<p>My son wants to go to graduate school. He will be loan free for UG, but is looking into a humanities graduate program and these days many of them require student investment of funds for the first two years before getting accepted to the PHD part of the program. Big change from when I was in college and grad students would be very poor but did not come out with loans on their heads along with a possibly non useful degree when it came to job possibilities. Though Physics has a lot more possibilities than the non STEM majors, going into major debt for a masters in the field…I don’t know. My son’s close friend turned down a possible PHD route there as it required too much debt as much as he wanted to go that direction. His father was adamantly against it because it’s one thing to live some years as a poor grad student studying what one’s passion is, a whole other to be paying for the rest of your life for that stint because you borrowed money to do this.</p>

<p>As an independent student, you are allowed to borrow up to $9500 dollars from DIrect Loans if you have freshman standing, more up to $12500 for junior, senior standing, with an UG total limit of $57,500. Any loans you’ve taken from Direct Loans, Staffords count and there are unsubsidized/subsidized limits within that limit. It does not appear that you are entitled to subsidized loans if you have no need as defined by EFC. The interest rate is a little under 4% and starts to accrue as the amounts are disbursed. You would be eligible for a tax credit for tuition and any loan interest paid is deductible if you meet IRS standards for those benefits. Do check out any and everything I say as things change, and I could also be wrong.</p>

<p>The physics grads I know make about $50K a year–they are primo but novo, great students and stats, no job experience. Most get jobs outside of the field. My understanding is that a PHD is needed for serious work in the field itself but this is something you need to investigate yourself. For grad school you can borrow up to $138,500, but what you borrowed as an UG comes off of that limit and the loans have a higher interest rate, I believe for grad students. Annual limit of about $20,500 a year.</p>

<p>Do be aware when you get info from the school that they are looking at this as a business and getting money FROM you. Whether it puts you in a bad situation in the future is not their concern. Many are going after those Direct Loan goodies they can get through you. I believe there is even more you could possibly borrow through PLUS but that requires an app and is not automatic. The interest rates are higher too, I believe. </p>

<p>If you are going to be a “poor, starving student” , you might as well start now and give up that apartment which is about twice what you should be paying as such. Your EFC in future years will be about 1/2 your income over $6100 or so (don’t remember exact amount) plus a hunk of your assets/savings, so use up whatever you have saved/invested and replace with student loans which do not have to be reported as assets. Keep the paper trail clear as to any assets being student loan money. It’s an important differentiation for fin aid. If you can get your EFC down to under the $5600 or so, you can qualify for PELL which maxes out at $5700 for an EFC of zero. I’m not strong on independent student figures, so check out everything I’ve told you. Good luck. </p>

7

<p><<<
I am prepared to live in slums and eat ramen. This is of no problem to me and I already lead a highly efficient lifestyle towards saving money.
<<<<</p>

<p>we hear that a lot when it comes to young folks wanting to borrow big bucks.</p>

<p>the truth is, by the time you are done you will be about 30. People are usually settling down or settled down by that time…married, living with a SO, maybe starting a family…no one wants to be slumming it at that point.
And, who knows where your job may be? It may be in a region that there is only pricey places to live.</p>

<p>and no professional can live on ramen forever</p>

<p>btw…who would co-sign your big loans??? </p>

8

<p>Try to find a co-op situation. and if you’re lucky, you might find a company that will help pay for college.</p>

9

<p>I think it would be better to take less classes and work more so you lessen your debt. I wonder if you explored any options that would cost less or give you more aid. It is not a good plan to pay for your masters if you are meaning to go on to a physics phD. If you are any good you will get an offer directly out of undergrad. Otherwise you should make a plan B. No it is not normal to be 100k in debt, it’s pretty irresponsible.</p>

10

<p>…just to add, physics PhD students are funded, even through the Master’s portion.</p>

11

<p>If you are prepared to live in the slums and eat ramen, then start now. The earlier you start, the shorter the stint. </p>

<p>Also BrownParent not all physics PHD programs are funded through the Master’s portion and for full funding, I would not think every single one is even for PHD. I am seeing an alarming number of graduate programs, PHD ones too, that are asking students to borrow. This scares the heck out of me. I went to a university where a lot of kids became poor grad students and many of them even poorer post grad students working at low pay jobs in hopes of getting something in their fields. A lot of my friends and former classmates went that route. It’s not a recent thing, no news at all that jobs in academia are difficult to find that pay a living wage. All goes hand in hand with adjuncts, IMO. </p>

<p>But, at least most of those in that situation did not take out LOANS for their grad school. I am seeing schools smack their lips at that easy get $20500 a year grad Direct Loan and are pushing grad students to take them as part of their package just as schools include the Direct Loan in fin aid undergrad packages. For someone like my son’s GF who is taking a career path program that pretty much empties into a ready job market with payback, it’s ok, plus she does NOT have undergrad loans. When a kid who is already $30K+ in debt for the undergrad degree (with interest for the unsub parts, that’s easy enough and often that interest is not included when people talk about what they TOOK OUT in loans, not what they owed by the time they started to pay it back), is going into grad school and is pursuing a course of study where the chances of gainful employment are small, to take out MORE loans is insane. As I said, being the poor, starving stereotypical whatever–when it’s the artist, the writer, the actor, the inventor, the academic, the grad student, it’s one thing—but to be racking up debt while doing it is a whole other. This alarms me greatly.</p>

<p>But OP, one thing at a time. You need to get your bachelor’s before having to even think about master’s other than to keep it the back of your mind that those loans you take as an undergrad will be continuing to accrue interest like that massive rolling snowball if you go on for grad studies too. And they could start accumulating at amounts close to what you are paying back, and exceding that when you take out even more loans… So try to keep those loan amounts down, costs down. </p>

12

<p>Can you defer your master’s start?
It’d make more sense tode lay for a year to look for a funded PHD program. Retake the GRE if necessary, and work a lot/save a lot during your “slide” year. If push comes to shove and you don’t get into a PHD program that’s funded, you’ll still be able to compare which school is cheaper between the schools you got into and the Master’s program, AND you’ll have saved money from working during this year so you won’t get into as much debt. If you’re afraid of losing your skills and knowledge, use Coursera, EdX, OpenCourseware from MIT…</p>