<p>^ You are not really reading and processing what folks are writing here…you seem to be repeating your initial beliefs despite other information provided. Maybe it is just for the sake of making an argument? </p>
<p>How about if you go into detail now, with the information provided, and see what you come up with. That is, what is your best REAL estimate of the money you need for the program, the total amount of your debt, then plug it into an online calculator to work out how much you’d have to actually pay each year to pay off that debt in 5 years. Then provide the real estimates of specific expenses, using the ideas individuals have provided. Then see what answer you get to answer your own question.</p>
<p>$15000 a year might be OK, but is not terribly generous. It may depend partly on your gender – some young guys need to eat a lot, and grocery bills can be high. You also need household supplies – cleaners, laundry soap, etc. figure $75 to $100 per week for everything, more if you eat a lot. Do you have a smart phone? Plans can start at$80/month. Willyou have cable TV and internet? Another $100 or so. Electricity and other utilities – I don’t know for an apartment, but somewhere between $50 and $100. Willyou be needing clothing? It does wear out, and you will need to look professional. Will you need a dry cleaner? Will you need to buy gifts for anyone? Will you be planning to do anything fun? Eat out? Buy a cup of coffee, or buy your lunch at work? Pay for parking? Your car will be 5 years older – by that time you may need to budget around $1000 per year for service and repairs to it, plus car insurance. Gas money obviously depends on how much you drive, but a tank of gas currently can run $50 to $60. Will you travel at all during this period? In short, even if you’re careful, life has a way of springing unexpected expenses on you, and I suspect your 5 year repayment plan will prove to be unrealistic. And while you don’t have to save for retirement right away, if you are able to do so you will be WAY ahead of the game, because that money will grow over such a long time. I second the suggestion that you find a budgeting web site. And kudos to you for thinking about these issues now.</p>
<p>okay i understand that i was WAY off at first and that there are tons of expenses i didn’t consider. my question has changed slightly though now. No one seems to be giving me an answer to why it is not okay to take on a large amount of student loans besides “i have lived longer than you and know it’s not” and the fact that i MAY not get a job. if that is REALLY the only reason why it’s not recommended, i’m willing to make that gamble (& i have no problem setting away 20,000 dollars a year and living like a typical college grad ie 50,000 salary for a few years) If there are other reasons why i shouldn’t i would love to hear them.</p>
<p>^ Well for starters, your numbers don’t quite work. A person earning $70k and paying a $20k loan per year is not equivalent to the person earning $50k because they do not take home the same proportion of pay after deductions. To pay $20k per year, you need to calculate how much extra you would need to earn before tax (taking into account the % you have to pay in taxes, social security etc). Do that and come back with new numbers. My guess is around 28k extra earned to get the 20k take home for the loan. </p>
<p>Also, the longer you take to pay off the loan, the more the loan actually costs you and it isn’t clear yet that your ‘say its $100k’ is actually going to be just $100k (dreamy estimates without details tend to be way too optimistic). Nor that your 5 year plan is realistic. Or that your rosy numbers are accurate (is the 100% employment rate into the actual occupation you are trained for? The average is 70k but what is the median? What if you are hired at the lower end of the range?). </p>
<p>Now add in the unknown and life events that those without debt don’t have to worry about as much: change in job market, loss of job, falling in love, illness, getting pregnant, taking your ‘dream job’ for less money or an expensive location, or a crap starting job just to ensure you can make loan payments etc. Now miss a payment, extend the payment period for whatever reason, and the debt gets even bigger…its always ticking away and adding money onto the money you owe (oh and then there is of course interest on the interest…). </p>
<p>It might or might not be worth it for an individual. But if you aren’t willing to invest an hour and run the numbers one can’t answer it and nor help you. Of course, if you just want to have a generic debate and work with generalities, I’m not really sure the point.</p>
<p>BTW, I think its fantastic you are thinking about this-- more students should do this!</p>
<p>Well, look at debt as something that takes away choices. If you have debt, you may be forced to take the job with lousy working conditions for more money over the good job that pays less. It means being less attractive as a marriage candidate since you will not have as much disposable income and being in debt in general makes you a less attractive mate. It can mean driving a cheaper car, taking no vacations, waiting longer to buy a house. You may wait to have kids, or have fewer kids. You will most likely save less money for your own kids college and not save as much for retirement, limiting the choices that you have upon retirement. </p>
<p>Also, it is darn near impossible to get a parent nowadays to sign off on loans that large. Even if they will cosign with you, they will need good credit. Not an easy combination to find.
Cross posted with starbright</p>
<p>MizzBee thanks i guess i never thought of it as that limiting before! i see now that that’s an impossible debt. fingers crossed for merit money!</p>
<p>Here’s another major problem. You take out loans for a year or two then either discover you dislike the field/program or don’t meet the requirements for finishing it. You therefore need to change majors or else you switch schools. You still have incurred the debt but no longer have the guaranteed job or income once you finish college. A very real scenario since most entering college freshmen either change a declared major or will be undecided. Not every student does well enough in the basic sciences required for entry into programs- especially in chemistry.</p>
<p>Do not count your chickens before they hatch. Try to have as little debt for college as possible, there are no guarantees in life. An accident or other misfortune could preclude your attaining your goals regardless of your academic abilities and current interests. How interested in the medical aspects of being a PA are you? Or is it the salary and job security you find attractive? Calculating the finances as posted sound more like someone heading for a business career.</p>
<p>Why limit yourself to one city? Broaden your horizons.</p>
<p>When our kid started to work, I encouraged her to save up 3-6 months of living expense just in case if she should lose her job. 5 years is a long time, you would be betting on that you would never be unemployed during that time period. With your budget, it is not likely you’ll have excess cash for raining days. Having 10-15K/year may seem like a lot of money, but when take into consideration of illness, car repair, gifts, travel…it is not a lot of money. You are still required to make monthly payment on your loans even if you could move back with your parents/relatives.</p>
<p>OP,
first I want to congratulate you for thinking ahead…well done!</p>
<p>When you are making your calculations, take 30-35% off the top from your gross salary as an estimate for taxes…it’s not just the IRS that gets its cut, also states (except for a few) and in some areas, also cities and school districts have their own taxes (like Ohio).</p>
<p>Also deduct from your gross income the amounts you will be paying for things like health insurance and 401-k contributions.</p>
<p>What is left is what you will have available to pay for your student loans, rent/utilities, transportation expenses (and if you have a car, it’s not only car payments, regular maintenance and unplanned repairs, insurance, gas…and in a city, parking is often in addition to rent), and of course things like food, clothes and a social life!</p>
<p>No doubt that $70,000 is a great starting salary.</p>
<p>Maybe you could borrow a little less than the $100,000 by doing things like becoming an RA or iiving in less expensive housing while you are in school, or holding a part time job during the school year and summers. My kids have done some not-so-run-of the mill jobs like teaching Hebrew school/sunday school ($25-30/hour), bar mitzvah tutoring for $45/hour, and reffing soccer games for $25-60/game. Their strategy was fewer hours for more pay…</p>
<p>Your plan to hit that debt with big chunks right after you graduate is good…you could moderate your life plan by maybe anticipating a roommate to share a 2 bedroom apartment? And living at home for a few months at the beginning both to build up savings and take a few big whacks at your student debt?</p>
<p>Use excel or go online to look at the amortization for paying back those loans.</p>
<p>If you have $100K in loans at 7% interest, and you pay $1700/month ($20,400 per year) at the end of 5 years you’ll still owe just over $20K. It will take a little over 6 years to pay off at that rate.</p>
<p>And as others have said, given that you’ll pay more taxes than a person with a 50K income, you will have less disposable income than someone making 50K with no loans. The other issue is that your social circle may include a mostly people living on 70K with no/minimal debt, and you’ll have to keep declining social invitations. That’s not the end of the world, but you have to think honestly about how you’d feel being in that situation for years. </p>
<p>Unlike others here I wouldn’t say “absolutely don’t” – you’re right that you can look on it as an investment, but be sure you’re going in with your eyes wide open. And think about other options to get get that education without as many loans. Do you absolutely have to take on $100K in debt to get that education and good shot at a 70K salary? What if you’re unlucky and end up getting a little below the average salary – say 65K? can you still make ends meet paying 20K per year on loans? If you had to drop down to paying 1250/month (15K per year) it would take you a little over 9 years to pay back the loans. If your loans are at a higher average interest rate than 7%, again, it would take you longer to pay everything back.</p>
<p>What is your per-year plan right now – how much does the school cost per year for everything you need (tuition, fees, room & board, textbooks, travel to and from school, personal expenses while in school), and how much will you contribute from summer and school-term earnings, how much if anything will your parents contribute, what if any financial aid would you be eligible for, and then how much will you need to take each year in loans, and where will you get the loans (do you have someone to co-sign for you)?</p>