Please do the math
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| Sun, 11-08-2009 - 5:06pm |
There is something that is bothering me. It is the amount of student loans that people are taking out. I have seen some posters lately that have $70 to $80 even a hundred or more grand in student loans plus credit card debt, and a mortgage or some combination of the above.
How much money do you have to make to actually pay those student loans back? I can understand if you are going to be a doctor or lawyer or some really high paying job to be able to afford to pay this off. What doesn't make sense to me is getting into that much debt for a job that pays 40 grand a year. It would take forever to pay these loans back. From what I have learned you cannot bankrupt student loans.
Do people really sit down and do the the math before they plunge into something like this? As far as what people make in the industry they want to go into, how much they will need in loans, and how long it will take to get out of debt?
Don't get me wrong, my bf has loans. And I don't consider them small. It is something we are working on. He could have had much more debt had he not worked during the summers and lived cheaply etc. We have been able to pay off half of the total in the last year(in a couple months it will be half).
I guess case in point people don't do things with a lot of planning. I got divorced and didn't sit down and figure out how much debt I would be in when it happened. As it turned out I had no idea I would even be in debt(then I got my surprise when I bought this business). I'm not saying everyone is perfect(including me) but I was just wondering on the thought process involved in a major venture like this? Do we place to much value on education being good debt? I know it would, and does stress me out as much as other debt, although not a mortgage for some reason. Maybe that is because you have something tangible you can sell for (hopefully) what you put into it if you want to.
It seems people with these large debts are having an awful time?
Thoughts on this ladies (and Duke)?



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Well, I know that I was scared when I took out my student loans,
Bex -
It does seem that way, and it's sad.
Kate
I really didn't think of how I was going to pay the loans while I was in university. However, I was pretty conscious of how much debt I was incurring along the way. I decided to earn my 4 year degree in 5 so that I could work along the way, too. So, I ended up with only $20 000 in debt and my family didn't give me a lot of money for my education (about $1000).
Despite the fact that my degree is in psychology, I have a great job that I love, and it is secure. I make a pretty good wage ($62000).
I agree with some of the other posters that there is a lot of pressure to further your education and it seems now that a masters is the minimum needed to get a good job. I hate to think of how much education my kids will require to earn a decent living.
I will encourage them to take what their hearts tell them to, even if the degree isn't one that has a reputation of leading to well paying jobs. I will support them financially to the best of my ability, but they will be expected to pay some, live frugally, and if required take loans, and/or complete the degree over a longer period of time.
I went away to school and I really feel that living away from home was good for me, and part of my education. I hope that my kids will have to opportunity to go away if that's what they want. However, with the cost of education increasing, and the need for advanced degrees becoming more necessary, who knows if we will be able to afford to send them away.
I find myself worrying about this at times. But, when I do, I have to step away and live for the now. This is in our future (at least 10 years away). I realize it will go fast, and we do put some money away for their education. But, I think it is just as important to enjoy being parents of young kids.
Where I work (my little team only of 4 only included)
This is an excellent thread.
There is a general assumption that higher education will open the doors to wider opportunities and thus, higher pay.
Though Duke makes an interesting point : maybe it isn't about how much you'll earn as soon as you graduate.
Kate
Its an interesting point Kate. I do strategic planning as part of my job, and the word around the campfire is that we are looking at budget cut-backs in the 2011 budget if not 2010. My department is planning contingencies. One of them is to not hire externally to replace the retiring boomers and hiring internally instead. Meaning there is going to be an upward "shift" as people at my level move into higer positions leaving lower positions empty for the time being. This will be a great opportunity for those in a position to take it. Some of these higher level positions require a Masters degree. If you don't have one, you can't move up.
I guess there are a lot of ways to look at it. I do know that if I hadn't put myself in debt and made the choice to go back to school I wouldn't be in the position I am in (i.e. making a great salary as a twenty something). If it means a few years of sacrifice to pay back the loans, then I think it is worth it!
A note - I mentioned earlier that my dad is paying my loans for me as part of an agreement we had. I am planning on taking them over as soon as I am in a financial position to do so, so I'm not just blowing smoke, lol.
Bex -
"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."
Bex -
We are having discussions about this right now in our home. Our son is a junior in high school and is exploring his college options. First choice schools have tuitions ranging from $28,000-$40,000 per year.
Tuition plus room and board at the local state school (which is too far way for him to commute to) would run him $18,000 per year.
I have about $140k in student loans...which paid for the tail end of college and all of law school for me.
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