<p>The income based repayment plan will help you cope with your federal loan debt. Using this plan, you won’t really need to worry about how much you take out in FEDERAL loans because your payments will be capped at a percentage of your income. To find out what that will be:</p>
<p>1) Estimate your first income post graduation. For this example, let’s assume $24,000.
2) Subtract the federal poverty from your income in #1. For a single person, the poverty level is $10,890. So income - poverty level = $13,110.
3) Your maximum yearly amount paid to student loans will equal 10% of your disposable income. 10% of $13,110 = $1,311.<br>
4) Divide the above number by 12 and you have your monthly payment, in this case: $109.25.</p>
<p>The payment amount is not dependent on total loan debt unless your total loan debt would give you a payment lower than $109.25.</p>
<p>As far as private loans go, you have to be VERY careful. Interest rates on private loans can be as high as 11%. The loan companies are not interested in your ability to pay, they are only interested in getting their money back. They do not offer generous repayment plans like the federal government does. They often will only give you 10 years to pay them off as opposed to the federal government who will give you 25 years. </p>
<p>Federal loan limits over the course of 4 years limit your debt to $31,000.</p>
<p>So if you needed $50,000 over 4 years, you’re looking at taking out $19,000 in private loans. If you took out $19,000 in private loans at 11% interest, you are looking at a payment of $261.73 for 10 years after graduation.</p>
<p>If you combine the federal and private loan payments, you are looking at paying $370.98 per month. Now, that number is not absolutely terrifying, but its a little on the high side for my taste. </p>
<p>If your rent in NYC is $400 per month (sharing an apartment), your transportation costs equal $125, your phone at $50, your internet at $20, utilities at $100, and food at $300, you are spending $995 without student loans. Add in your student loans and you are at $1,365.98. If you are earning $24,000 and paying 15% to taxes, you are bringing home $1,700 per month. So you would have about $334.02 left to spend on other expenses. That’s a pretty tight budget. But if you are earning $600 a week waiting tables, its doable. If you are working in a regional theatre or non-eq tour for $350 a week, its not as doable unless they are paying for your housing and transportation.</p>
<p>Do your own math and come up with your own numbers as you try to decide what’s best for you. Just remember, when there is a will, there is always a way. Even though you may not be able to go to your dream schools, you may either be able to work for a few years and save up money, move to a large city and start taking acting and dance classes while working, or earn an associates in a high demand field (such as nursing) and work part time with great pay while working on your BFA. Or practice your craft in a training program you set up on your own while getting a degree in something other than theatre that you could also see yourself doing. There are many paths to a career in the arts, and there is only one right way - the way that works best for you. I speak from experience, I did not start off at my dream school or in my dream major, but I am still doing what I always wanted to 13 years later - it CAN be done, but it takes hard work and perseverance. </p>
<p>Good Luck!</p>