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Ryan asked:
I just finished undergraduate school with no loans. I am very glad. However, my degree is such that I can’t do much with it unless I get a Masters. So, I’m in graduate school right now. I have to take out loans, and I’m expecting to take out a considerable amount to pay for two years of grad school. Now, even when I get my Master’s degree, I will likely get a job that only pays $35,000/year, if that. I’m planning on going into teaching, and at a Catholic school.
Sphere: Related ContentI just finished undergraduate school with no loans. I am very glad. However, my degree is such that I can’t do much with it unless I get a Masters. So, I’m in graduate school right now. I have to take out loans, and I’m expecting to take out a considerable amount to pay for two years of grad school. Now, even when I get my Master’s degree, I will likely get a job that only pays $35,000/year, if that. I’m planning on going into teaching, and at a Catholic school.
So, my question is: should I be overly concerned about paying back my loans? Has anyone else here taken out college loans and was able or are able to pay them back, even though one wasn’t in a big-bucks paying profession?
I really appreciate the advice!
Tags: Big Bucks, Catholic School, College Loans, Grad School, Graduate School, Job, Masters, Profession, School Loans, Undergraduate School
July 22nd, 2008 at 4:17 am
A good rule of thumb is, add up all the loans that you would have to pay, and then estimate the payment. If the payment, monthly, is not more than 10% of you gross income, you are doing great!!!! And remember, it all comes down to happiness. If you are truly happy, it is worth it, no matter how long it takes to pay it back. Great job with teaching, thanks!
July 25th, 2008 at 9:33 am
Yes, I have paid back loans for education, though many years ago, and so have my children. It is really in your best interests to try to pay them back as it will affect your credit rating. If you are making a good effort to pay them back you may find there are special programs to help you. There are here in Canada - not sure about the US. For a while you may need to look at extra work - tutoring, etc. to make a bigger dent in the debt. In the end it will be well worth it, and the record that you did it will always be there. Best of luck with it.
July 25th, 2008 at 6:20 pm
Someone will always owe more money back in student loans than you, so don’t worry. Yes, they’re manageable, there’s consolidation, forbearance, deferrment, low payments over a period of time, it’s easy. I dropped out of college and owe student loan creditors enough money and I certainly don’t have a job equaling the pay of a job with a college degree. You make it work somehow. Bills make the world go ’round… or something.
July 25th, 2008 at 8:00 pm
I think there is a program that you can get your student loans waived if you work in a public school with at risk students, for a few years. Any chance you would be willing to do that, before moving on to the Catholic school?
July 26th, 2008 at 2:54 am
Yes Keep and start to pay right away so it dont seem like for ever
July 27th, 2008 at 4:14 am
Hey! Congrats on graduation and wtg on getting through without debt! That’s awesome!
Now comes grad-school…and you should absolutely be concerned with paying back your student loans. Aside from it being the right thing to do, you will thank yourself years down the road for not letting the debt accumulate to astronomical proportions from all the interest you’ll be charged if you don’t pay them back! (Interest differs depending if you have a federal govt. subsidized loan or a privatized loan.) Having said this, however, there is no need to stress out over them.
Student loans (as with any other debt) are completely managable. The key is to have a plan…a budget. Be prepared to make a few sacrifices. It’s amazing how little a person can survive on IF he/she is willing to scrape for a while.
Don’t panic…the belt tightening only lasts a short while. Sit down and write out a budget, listing all of the *necessary* expenses you know you will incur (i.e. rent/mortgage, utilities, food, transportation, etc.). Get rid of those items you only *think* you need, but really don’t (i.e. cable or dish TV, subscriptions, spa treatments, froo-froo hair care, gym membership, eating out, etc.). Set your budget for what you can afford and still pay yourself first and your creditors 2nd. Here’s an example:
$35,000/year = $26,250 after taxes (assuming 25% fed. tax)
= $2,187.50/month budget
Savings @ 10%: $ 219.00
Rent/Mortgage: 900.00
Food: 250.00
Utilities: 150.00
Phone: 50.00
Car (gas, ins.) 200.00
Medical exp. 30.00
Miscellaneous 100.00
_______________________
Total $1,899.00
This leaves you with $288.50 to divy out to other expenses. If your minimum loan payment is $150/month, you could pay $200 on it which has a twofold positive effect: 1) you make your payment on time, thereby avoiding additional interest, and 2) you knock down the principle by an additional $50/month. This will shorten the life of your loan and cost you less in interest in the long run. Just how short or long your loan life is depends on the terms and amount of your loan. But just to give you an idea of how this can work, my husband and I pay an extra $100 dollars per month on our mortgage. What this is doing is shortening our loan from 30 years to 18, and we’ll save something like $150,000 in interest. That’s HUGE incentive to pay back the loan, and to pay it back early! 30 years seems like forever…but 18 is like light at the end of the tunnel. I’m guessing your student loans aren’t anywhere near the cost of a house, so you could be looking at paying off within 5 to 10 years. That’s certainly manageable for a young person just out of college!
So, make a budget, decide what are your *essentials,* decide what you can reasonably pay for those essentials, resign yourself to doing without for a season, and make sure you PAY YOURSELF FIRST! It may seem crazy to sock away 10% of your income when you think about all you’ll be giving up for 5 years. It doesn’t have to be 10% to start…just put away what is reasonable 5%, 3%, whatever. As your salary increases, you can increase the amount you put into savings…and your loans will get easier to pay, too. But just to show you what 10% looks like…$200 savings per month, over 5 years will add up to $6,000 savings (and that doesn’t even include adjustments for salary increases and bank interest earned). How many people can say they have that? A little discipline now pays huge dividends later…and you can buy a lot of froo-froo hair care with $6,000! lol ; )
Good luck to you and God bless you for being a teacher. : )
P.S. Here’s a cool little student loan interest calculator website:
July 27th, 2008 at 1:35 pm
There are two types of loans when going through a school. The first is subsidized, the other is unsubsidized. The main difference is that the subsidized is based on need and does not acrue interest until 6 months after the student stops going to school. The unsubsidized is the opposite and will accrue interest while the student is still in school. As to your question these loans may be forgiveable (either partially or tottaly) based on the field you are going into. Also schools are usually really good about setting up people with banks who are very forgiving and can work with students. Hope that eases your squeamishness a little.
July 30th, 2008 at 11:14 pm
Of course you should be concerned about repaying the loan. To not pay it back is no less than stealing. You borrowed it, you pay it back. It may take a while, but at least you do not become a thief.
August 2nd, 2008 at 10:04 pm
I go to school and they toold us about those type or thing .College loans can be manageable if you put your mind to it an work hard .
August 6th, 2008 at 7:36 am
I managed to pay off my student loans, but that was over 30 years ago. College was more affordable then, and I had a decent paying job (in a field unrelated to my college education). Today, college is much more costly while wages and salaries are mostly stagnant. You will probably be able to pay back your loans over time, but it will put severe strains on your budget. Still, you seem like a person who will make those sacrifices to do what you believe in. Best of luck to you.
August 8th, 2008 at 3:05 pm
loans are something to be used sparingly with an eye to the repayment schedule. you just have to wei the pros and cons because you have to live with it….
August 10th, 2008 at 11:38 am
College loans are payable in installments. Depending on how much you pull out of course depends on how much your minimum payment is but even if your minimum payment is more than you can afford than you can contact then to get it lowered. Good luck with this and take care.
August 12th, 2008 at 12:56 pm
no , because if you payed more money for your studies than you would earn . it is absolutley not managable.
August 15th, 2008 at 5:51 am
yes, by taking advantage of offers given by the lenders…….
August 18th, 2008 at 2:49 pm
Yes you should be concerened about paying off your loans. For one thing it will establish an excellent credit rating for your future for another it is the honest and respectable way to do business,
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