Share Student Loan Stories

[corpsole2]

One of the big reasons I can not make a decision about graduate school is that I do not like the idea of taking on large student loans. For a time in my childhood, my parents were debt free, and extolled the virtues of not owing money. So, when I realized I needed to take two course at TESC to graduate with my B.A., I dragged my feet before I accepted my small student loan of $6700. I think the thing that shocked me into reality was my aunt, who is soon to be graduating with her M.Ed., and she expects to pay on her student loans the rest of her life. She basically told me to get a life.

But, I am running into this same reluctance as I face going to grad school. Even going to WGU, I would have to take out $3250 every six months in student loans until I graduate. Also, to get into Harvard Extension I would have to borrow $7200 for three introductory courses. I know a master's degree will be beneficial to my career, and possibly up my earnings and it will enable me to pay off my loans, but I am not a guy who likes uncertainty.

How are you guys managing your student loans? Are they manageable even in the $20k - $30k range?

[AkaiOkami]

The problem with student loans is the daily interest rate after the grace period. Depending on the type of loan, the interest is 3.5-6.5%; last time I looked into student loans. Calculate 30k with accrued daily interest, and that will give you the idea what you are getting into. If you can not pay off the loan by end of the grace period, do not take out the loan.

I know several people that get burned by student loan interest rates. 10 years later they are still making payments on student loans. Be smart and do not fall into the trap that schools play. They will tell you that you need that masters degree to get that magical unicorn of a 100k job. Then, charge 10-40k tuition per year, while, you have sucker written all over your face. Do fall into the trap that you need it for your job. If you need it for your job then the company will pay 100% for the tuition. If the company will pay only a certain percentage, then that is a red flag. If you can not get a scholarship that pay 100%, that is a red flag. Go with your gut on this and do not fall into the trap, or you will get burn like so many others.

[GoodYellowDogs]

That's why I chose Patten.edu to get my Masters. It's $1600 ($400 each month for 4 months) for the first term and $2000 ($500 a month for 4 months) for the second term and I plan to finish in two terms. I'm lucky that I'm just doing my Masters to check off a box and stay competitive until I retire. However, I'm really happy with the courses I'm taking and I'm learning a great deal.

I would recommend it for anyone who needs a Masters. The bottom line is that unless you are in Law, Banking, or some of the other snooty professions, no one cares where you got your Masters. It's simply a tool to show that you can start and complete something, and to get you by the automated HR screening.

[dfrecore]

I would NEVER get a student loan under any circumstances. My parents didn't let me do it when I got accepted into Stanford with a partial scholarship, so I went to SJSU instead. I thank my mom regularly for her foresight and wisdom. I have always paid for college myself through working. If I didn't have enough money to pay for a class or semester, i just didn't do it.

I would suggest saving up until you have enough to pay for the degree that you want, and also do a lot of research on where you can go the most cheaply (obviously that fits your goals). Patten and WGU seem to be popular here, because if they can do it quickly, they could do it cheaply.

[clep3705]

Some people say there is good debt (home mortgage) and bad debt (credit cards). Many classify student loans as good debt, but the evidence tends to refute that. Look at how many people can't pay off their student loans. It is a $1 trillion dollar problem.

Do everything you can to avoid student loan debt. $6,700 is a small loan? How long will it take you to pay it off at the rate you are paying it off now? Have you started paying it off? Do you still think $6,700 is a small loan?

My neighbor told me a story he heard on the Dave Ramsey show. It goes something like this. Caller said he could afford to buy a $20,000 or $30,000 dollar car after making a $1,500 down payment. Dave asked questions and it came out that $1,500 was all of the cash the caller had or had any hope of accumulating. Dave told the caller that what he could afford was a $1,500 used car and that is what he should buy. Going into debt for Harvard Extension makes no sense at all. Do something you can afford.

[cookderosa]

If you don't think you can do it without borrowing all of it, my suggestion is to wait until you can pay cash for at least 1/2 of it. While you're enrolled, keep saving- save like crazy and save the other 1/2 while you're in school. Before you graduate, send a lump sum BEFORE your grace period closes.

Student loan interest is tricky, it's like those "no interest for 6 months" promotions, and you're accumulating interest- so when 6 months and 1 day comes, BAM you're hit with thousands of dollars of interest. What you borrow will NOT be what you owe on the day you enter repayment. Even though the loans are 8%, you're going to spend the first several years not touching principle. I have a small student loan (I borrowed about $5000) and have paid it perfectly since the first day out of my grace. My principal balance is higher than it was when I started, and that's 12 months out. I actually decided to pay it off in one lump sum with my tax return money this Feb, but 100% of what I've been paying has went to interest. It's a terrible, terrible, terrible burden..not the "payment" but the "balance" which I can't get at! It makes me crazy, and my loan wasn't very large.

[Exfactor]

I always tell people to be cautious when dealing with student loans, especially private student loans. I worked in the financial aid department at one of my previous schools (work study), and the amount of loans people were taking out was just crazy! However, a friend (school psychologist) had 120k in student loans, and had the entire debt cleared/forgiven due to working in the educational system in my state. I say never take on more than you can afford to pay back.