Undergrad worried about college loans...any advice/reassurance/stories?

Parents Forum
1

<p>I'm a sophomore right now, majoring in a STEM field. My school has a very strong program and the average (mean) starting salary is quite high, >$70,000. I'm also receiving pretty generous financial aid, but it's an expensive school, so my education will probably cost $80,000 after four years...</p>

<p>A lot of my friends have been telling me to not worry about it, that we'll all make good money out of college and debt isn't too much of an issue. But I'm still worried, and I'd like to talk to some CC parents about this for a better perspective. There are some specific financial details that worry me:
[ul]
[<em>] neither of my parents are working right now. They're pursuing, I guess, alternative career options, and I'm happy that they enjoy their work more, but we might not have a stable income for a while.
[</em>] we're borrowing the money (it's not a student loan) at an excellent interest rate, and so far we've been paying the interest off with unemployment benefits. I don't know if those will continue to be paid.
[<em>] I essentially have no college fund (it was hit pretty hard by the stock crash a few years ago).
[</em>] I have a sibling 3 years younger who will have to go to college.
[/ul]</p>

<p>My parents have been telling me not to worry about it, and that as parents they'll make sure my sibling and I are educated and can start our adult lives without too much stress. But since our financial situation is tenuous and I don't want them to be paying off my college loans into their old age, I really want to be able to pay for my college costs.</p>

<p>I was thinking I could work during summers to help pay off some of the loan (I think I can contribute $3,000/summer, hopefully more, from working. But that's still a pretty small dent in the cost, so I'll be paying most of it off after I graduate. The big question is: how hard is it to pay off a debt of $70,000 or so? (Assume my starting salary is the same amount/year.)</p>

<p>I've been really worried about this. I can't tell how hard it would be to do this, because my parents are telling me not to worry (but I don't believe them & want to shoulder the burden) and my peers are telling me not to worry (but their parents actually can pay, or I feel they're too optimistic).</p>

<p>I'd really appreciate any personal experiences and advice from the parents out there.</p>

2

<p>Study as hard as you could and graduate on time.</p>

<p>Pursue any intership opportunity.</p>

3

<p>Ok</p>

<p>Google “no more harvard debt” and you will find a guy paid off his $90,000 student loans in 7 months.</p>

4

<p>It totally depends upon you. If you graduate with a 70K/yr job, and you live like you are making 70k/yr, then it will take forever.</p>

<p>But how are you living now? Are you living as if you are making 15-20K/yr or less? If you continue to live the same way, and plow all your extra money into the debt, you’ll pay it off in no time. That’s hard to do, but if you determine that you are going to live in a shared apartment or at home, live very low, right now you probably have very few financial responsibilities. Once you start a family, buying property…it gets tougher. But if is your priority, you can do it easily, having no obligations now.</p>

<p>Dave Ramsey is really amazing to listen to or read, if you’re interested in paying off debt. Though he always makes me feel guilty.</p>

5

<p>Dave Ramsey would tell you
No student loans, period. Withdraw from this school and transfer to a school that you can afford with cash.</p>

6

<p>^^True, but Dave is a little over the top on some of this stuff.</p>

7

<p>I was thinking I could work during summers to help pay off some of the loan (I think I can contribute $3,000/summer, hopefully more, from working. But that’s still a pretty small dent in the cost, so I’ll be paying most of it off after I graduate. The big question is: how hard is it to pay off a debt of $70,000 or so? (Assume my starting salary is the same amount/year.)</p>

<p>Do you qualify for work study? It seems that since neither of your parents are working, that you should qualify. What’s your EFC? It seems your school doesn’t meet need if your parents aren’t working but you still have $20,000 in loans per year.</p>

<p>How much of the loans are subsidized?
Since Stafford loans are about $5,500 for freshmen & Perkins loans are generally fairly small, are the rest of your loans Parent Plus loans or are they private?</p>

<p>I think you are wise to be concerned about the impact of your total debt because it will affect your flexibility in accepting jobs after graduation.</p>

<p>Generally students are advised to limit debt to $25,000 - $28,000 at graduation, less if they are planning on further education.</p>

8

<p>Most college grads are used to living “the poor student life”. If you get that good paying job and don’t increase your spending too much you should do OK. </p>

<p>You can always do the math to figure out the money. $80,000 repaid over 10 years at about 5% interest would be about $10,000 a year in payments.</p>

<p>The biggest item (as stated before) is to be sure to graduate in 4 years as to not take on any more debt.</p>

9

<p>It is hard to continue living like a student when you need an apt in a new probably high cost city, better clothes, taxes to pay, maybe a car, lunch. etc</p>