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[Mr. B Natural]

PhD is worth the extra debt. You're pot committed now, play until the showdown. Also, I too would be surprised if your student loan isn't the best interest rate you see in your life.

I agree. You're commited. You made your decision now see it through. You're not gonna benefit from jumping ship now. You should have had this all planned out ahead of time, or at least, was willing to accept the apparent debt that came with your decision.

At 100,000 dollars at 6 percent interest rate you're talking about 6,000 dollars interest a year. A lot of money to toss out the window, but at the same time, it's not that much for such a large loan. Then you can deduct that 6,000 from your taxes which means you might get a thousand back your way in april (totally pulling that number out of my butt). 5,000 dollars between a couple of professionals should be easy as long as you become professional.

So, personally I wouldn't sweat the debt. Instead I'd be spending that anxiety on figuring out how you're gonna bounce out of college with a phd with a gusto and a career that will make your debt and your money woes from now on seem like a small insignificant crease in the book of your life.

 

[AndyD]

The amount of money you save buy renting, and putting it into actual investment vehicles-a house is a saving vehicle with a negative interest rate, not an investment, will actually yield greater wealth.

My mortgage is cheaper than an apartment about two thirds of the size of our place down the street. Yes I can fund a cheapio apartment with little space and in a part of town I don't want to live in, but your argument is not always valid.

 

[diffusionx]

The amount of money you save buy renting, and putting it into actual investment vehicles-a house is a saving vehicle with a negative interest rate, not an investment, will actually yield greater wealth.

Mortgages are cheaper than rentals where I live, and I don't live in the boonies or whatever.

Sure if it goes underwater I am fucked but whatever, the stock market is a casino nowadays too. I have to spend my money living somewhere and I might as well give it a shot. The only people who seem to have it totally safe nowadays are the ones with corner offices on Wall Street... and DC. They take care of each other.

 

[The Lamp]

I will likely be in 89k+ debt by the time I finish my bachelor's degree.
Sucks that there are no scholarships or grants I'm qualified for.

Considering the baseline salary I'd make it would take me around 7.8 years to pay it off (worst-case scenario), but since I want to go to graduate school, longer than that.

I think my interest is 6%...not sure, though. My family has really good credit so if people are getting 2-3% interest rates, I don't know where from.

 

[diffusionx]

I will likely be in 89k+ debt by the time I finish my bachelor's degree.
Sucks that there are no scholarships or grants I'm qualified for.

Considering the baseline salary I'd make it would take me around 7.5 years to pay it off, but since I want to go to graduate school, longer than that.

I think my interest is 6%...not sure, though. My family has really good credit so if people are getting 2-3% interest rates, I don't know where from.

89K in debt for a bachelor's degree is a LOT. Let me guess, out of state school, family makes decent amount of money so less help, etc?

BTW 7.5 years is probably conservative unless you want to sacrifice everything and send every spare dollar to Sallie Mae. Which you might! But if you do, be prepared to curse out your decision every day, like I did.

2-3% - interest rates were very low in 04-06 or so. I think they are higher now.

 

[samus i am]

My Ph.D. would be in Information Systems Management.

Also relevant: My wife and I make about 90k a year combined, I'm in my early 30's, she is in her late 20's.

What are you complaining about? I'll show you real debt, just look at my bank account.

 

[The Lamp]

89K in debt for a bachelor's degree is insane. Let me guess, out of state, family makes decent amount of money, etc?

BTW 7.5 years is probably conservative unless you want to sacrifice everything and send every spare dollar to Sallie Mae. Which you might!

Well my tuition is 9k a year (in-state, thank goodness) but my living expenses for living off-campus are currently 12k a year (super expensive but it was my only option besides dorms this year), but I'm moving out to somewhere cheaper that will bump my living expenses down to 7.5k a year.

Since my bachelor's degree will take about 5 years to complete (my major is the hardest/longest at my university)

It's 21k(1) + ~16.5k(4) + 6% interest (not sure how this works but I just compounded it on top of the total amount) =~ 91k debt when I graduate.

That's assuming no scholarships/grants, same loan until I graduate, same future living situation until I graduate, all of which is unlikely. So that's kind of a not-so-good case scenario.

But the average salary for my major after graduation is between $60-80k starting, but most start at $60k.

If I paid 1k every month it'd take me about 7.8 years, but I could always pay more or less in real situations.

I probably did the interest wrong since it probably compounds in a different manner, but I was too lazy to bother figuring that out.

 

[VanMardigan]

My interest is 6% on the 60k for my Ph.D. and 3-5% for the other 40k.

I pay less on my mortgage than I would on an apartment. I'm a family man now, I ain't renting if I can own something that I can then pass on to my children.

But that's another debate, right now I'm trying to figure our where to draw the line. Taking a year off to pay down mu balance a bit sounds like a good idea, something I'll discuss with my mentor.

 

[PetriP-TNT]

I've said it many times and I'll say it again: the school system, especially student loans, in usa are really fucked up. I can't even figure how'd I feel being half a mil in dept after graduating.

 

[SturokBGD]

Do what my wife did, get married and make your husband pay your 6-figure student loan.

 

[vicissitudes]

Well my tuition is 9k a year (in-state, thank goodness) but my living expenses for living off-campus are currently 12k a year (super expensive but it was my only option besides dorms this year), but I'm moving out to somewhere cheaper that will bump my living expenses down to 7.5k a year.

Since my bachelor's degree will take about 5 years to complete (my major is the hardest/longest at my university)

It's 21k(1) + ~16.5k(4) + 6% interest (not sure how this works but I just compounded it on top of the total amount) =~ 91k debt when I graduate.

That's assuming no scholarships/grants, same loan until I graduate, same future living situation until I graduate, all of which is unlikely. So that's kind of a not-so-good case scenario.

But the average salary for my major after graduation is between $60-80k starting, but most start at $60k.

If I paid 1k every month it'd take me about 7.8 years, but I could always pay more or less in real situations.

I probably did the interest wrong since it probably compounds in a different manner, but I was too lazy to bother figuring that out.

Considering getting a part-time job. You don't want to have that much loans when you graduate. Trust me.

 

[zero_suit]

Do what my wife did, get married and make your husband pay your 6-figure student loan.

How did she "make" you pay for it?

 

[Monroeski]

I've said it many times and I'll say it again: the school system, especially student loans, in usa are really fucked up. I can't even figure how'd I feel being half a mil in dept after graduating.

That much debt is very very very VERY uncommon. I've known many people that even went through medical school and came out under 6 figures.

 

[zomgbbqftw]

My interest is 6% on the 60k for my Ph.D. and 3-5% for the other 40k.

I pay less on my mortgage than I would on an apartment. I'm a family man now, I ain't renting if I can own something that I can then pass on to my children.

But that's another debate, right now I'm trying to figure our where to draw the line. Taking a year off to pay down mu balance a bit sounds like a good idea, something I'll discuss with my mentor.

So around $5-6k in interest on your principal loans, and how much is your mortgage interest annually?

If your family income is $90k, you should be left with $65-70k after tax and deductions. You are spending too much elsewhere if you require loans to pay for you education. You need to budget with your wife, properly. Sit down and make a list of every single living expense, I mean everything - school fees, holidays, cars, gas, food, clothes, shoes, kids school fees. If that adds up to more than you income after tax, deductions and loan/mortgage interest payments you need to change your lifestyle and cut back on something. It's usually quite a tough decision, but you have to do it and finish your PhD.

 

[diffusionx]

Well my tuition is 9k a year (in-state, thank goodness) but my living expenses for living off-campus are currently 12k a year (super expensive but it was my only option besides dorms this year), but I'm moving out to somewhere cheaper that will bump my living expenses down to 7.5k a year.

Since my bachelor's degree will take about 5 years to complete (my major is the hardest/longest at my university)

It's 21k(1) + ~16.5k(4) + 6% interest (not sure how this works but I just compounded it on top of the total amount) =~ 91k debt when I graduate.

That's assuming no scholarships/grants, same loan until I graduate, same future living situation until I graduate, all of which is unlikely. So that's kind of a not-so-good case scenario.

But the average salary for my major after graduation is between $60-80k starting, but most start at $60k.

If I paid 1k every month it'd take me about 7.8 years, but I could always pay more or less in real situations.

I probably did the interest wrong since it probably compounds in a different manner, but I was too lazy to bother figuring that out.

Just a few comments, forgive me if they aren't wanted.

1. Uncle Sam pays the interest until you get your sheepskin on guaranteed loans. You're probably getting both guaranteed and unguaranteed. So it's not quite that bad.
2. Average salaries are misleading especially in this economy. You just don't know what will happen. Obviously the colleges have a vested interest in giving the most optimistic numbers possible. I wouldn't rely on a starting salary of $60K even in a desired field. You can't bet on anything in a poor economy.
3. If you are really interested in paying off your debt as fast as possible after college then your first priority should be not getting the debt in the first place. In other words, keep the debt load as low as possible.

Dropping one thousand hard earned dollars every month into the greedy maw of Sallie Mae fucking blows. Especially if its one thousand hard earned dollars you aren't spending on, say, trips to Vegas or whatever with your friends. Trust me on that one.

 

[kswiston]

I'm glad I did my schooling in Canada. Tuition is $6-8k/year for grad school regardless of the school (in Ontario at least) and if you are a high end student you can get that waived. Most schools provide TA positions that cover living expenses (if you live cheaply), and you can apply for Provincial and Federal scholarships that run $15-35k a year tax free.

I ran $35k in debt for my undergrad degree, but me and my wife received over $200k in scholarships and between us for Graduate degrees. Granted, you have to be in the top 20% or so. At least in Biology.

EDIT: In your predicament, I would make a judgement call. If you had started the PhD within the last year, and it wasn't going to increase your salary substantially, I'd say bail out. But if you think that potential for increased wages will more than offset $100k over the next 10 years or so, go for it.

A mistake people sometimes make is looking at how much more per year they could make with further schooling. Going from $40k to $55k a year doesn't make much sense if you are losing 4 years of potential earnings in the process, plus shelling out $60k in debts. It would take you almost 15 years to make back those earnings, and you will be under the stress of debt the entire time. Not really worth it.

 

[VanMardigan]

So around $5-6k in interest on your principal loans, and how much is your mortgage interest annually?

If your family income is $90k, you should be left with $65-70k after tax and deductions. You are spending too much elsewhere if you require loans to pay for you education. You need to budget with your wife, properly. Sit down and make a list of every single living expense, I mean everything - school fees, holidays, cars, gas, food, clothes, shoes, kids school fees. If that adds up to more than you income after tax, deductions and loan/mortgage interest payments you need to change your lifestyle and cut back on something. It's usually quite a tough decision, but you have to do it and finish your PhD.

My tuition is $4800 every three months, I can't pay that no matter what I cut, given my baseline expenses on a family of three (four this summer). What I CAN and will do is work with my financial adviser on trimming the amount of my loans so that I can cover at least part of the tuition and thus borrow less. And I think taking a year off (while still writing) should help me pay back some of my loans. I'll also look for some more scholarships while I'm at it, but I think I'll stick it out. This thread has been fantastic. Thanks guys, keep the suggestions rolling.

edit: the interest rate on my home is 5%.

 

[zomgbbqftw]

My tuition is $4800 every three months, I can't pay that no matter what I cut, given my baseline expenses on a family of three (four this summer). What I CAN and will do is work with my financial adviser on trimming the amount of my loans so that I can cover at least part of the tuition and thus borrow less. And I think taking a year off (while still writing) should help me pay back some of my loans. I'll also look for some more scholarships while I'm at it, but I think I'll stick it out. This thread has been fantastic. Thanks guys, keep the suggestions rolling.

edit: the interest rate on my home is 5%.

Even cutting back so you take on less debt is a good idea. You don't really need a financial adviser, you and your wife can do it. Usually it is better that way as you make the cuts to your lifestyle rather than having it imposed by someone who doesn't understand your situation.

So far outgoing expenses are $5,000/a on debt interest, $19,200/a on tuition and your mortgage interest which is 5% a year on some amount of money. Your monthly expenditure should be around $2000/m excluding mortgage payments which brings your total expenditure up to about $50k per year plus your mortgage. On a $118k mortgage that's $6k per year interest only, and if you are making repayments its another $5k.

You shouldn't need to take out loans to pay for your schooling. If your house expenditures excluding your mortgage is higher than $2000/m you need to cut back on shopping, food and maybe send your kid to a public school or get a cheaper nanny, get a cookbook specifically for low budget cooking and try not to eat out as much.

I know all of that sounds quite drastic, but being in debt sucks and interest rates are only going one way so now is a good time to pay down your mortgage with every spare penny, not take on more.

Edit: figures updated to reflect real mortgage cost.

 

[markatisu]

Once you get past 100k in student loans I don't think it really matters.

 

[VanMardigan]

Even cutting back so you take on less debt is a good idea. You don't really need a financial adviser, you and your wife can do it. Usually it is better that way as you make the cuts to your lifestyle rather than having it imposed by someone who doesn't understand your situation.

So far outgoing expenses are $5,000/a on debt interest, $19,200/a on tuition and your mortgage interest which is 5% a year on some amount of money. Your monthly expenditure should be around $2000/m excluding mortgage payments which brings your total expenditure up to about $50k per year plus your mortgage. On a $118k mortgage that's $6k per year interest only, and if you are making repayments its another $5k.

You shouldn't need to take out loans to pay for your schooling. If your house expenditures excluding your mortgage is higher than $2000/m you need to cut back on shopping, food and maybe send your kid to a public school or get a cheaper nanny, get a cookbook specifically for low budget cooking and try not to eat out as much.

I know all of that sounds quite drastic, but being in debt sucks and interest rates are only going one way so now is a good time to pay down your mortgage with every spare penny, not take on more.

Edit: figures updated to reflect real mortgage cost.

I actually meant the financial aid adviser. I do MS Money, I know where my money is going, and I know the sacrifices my wife and I are wiling to make (not $1600/month). I just badly, terribly, embarrassingly miscalculated my financial aid loans.

Thank you for the advice, I appreciate it.

 

[zomgbbqftw]

I actually meant the financial aid adviser. I do MS Money, I know where my money is going, and I know the sacrifices my wife and I are wiling to make (not $1600/month). I just badly, terribly, embarrassingly miscalculated my financial aid loans.

Thank you for the advice, I appreciate it.

It happens sometimes, you just have to make sure it doesn't ruin your life. My sister was in a similar position to you a year or so back, she had outgoings she couldn't afford and had to pay for her further education but my dad and I helped them work out a cost cutting plan which saved them £1100 per month and now she has been able to pay down some of the loan capital. Neither of them work particularly fancy jobs, they sound much like you and your wife.

You would be surprised as to how easy it is to get by without luxury items, my sister used to spend a lot on going out and clothes, and her fiancée would spend a lot on games and Blu-rays. Their new spending plan allows them to go out twice a month, buy one game per month and three Blu-rays and they have a LoveFilm plan for £15/m. Special purchase items like TVs and cars are taken from savings and need to be agreed between them and since my sister would never let him buy big ticket items like that they don't waste money any more. They also make do without unlimited phone plans so their bills are down from like £60/m each to £15/m because they stick to the same phone rather than upgrade.

All in all they found it was possible to save £700/m without changing their lifestyle one bit, but because of the desperate situation they decided to save more and cut down on going out and luxury food. It helps them eat healthier too because they mostly eat vegetarian unless they have guests.

They would have been bankrupt by now if not for those changes or they would have had to borrow (more) money from my dad or myself and we had already lent around £22k between us.

 

[sankt-Antonio]

I've said it many times and I'll say it again: the school system, especially student loans, in usa are really fucked up. I can't even figure how'd I feel being half a mil in dept after graduating.

this.
I am about to finish in five months without any debt and all i had to do was 10h of working every week to pay for my education+living.
And still, i was on many demonstrations to make education free of charge again (germany).
Its mind boggling whats going on in the usa.

 

[LyR]

wow crazy world, my largest dept was -732€, I'm not kidding. (and yes, I'm an University student too, and yes I've a credit card)

well time for another economy crisis, thank you




offtopic, to prove my point

Yes, we are still in the middle of a world wide recession because of the American banking system collapsing under their own greed. A crisis made possible because American's took on more debt than they could repay, going bankrupt in mass; and blocking the flow of credit because the banks are too scared to loan.

If there was any point that the rest of the world had a reason to be narked at American's, it would be now. They call it "America's Banking Crisis" for a reason, it rippled across the world like a great Tsunami, damaging the economies of every country it hit.

Millions of people out of work, because American's had to have the big house and the big car they couldn't afford.

Even the freaking Euro crisis was caused by an American bank. Greece wouldn't have qualified to join the EU if Goldman Sachs hadn't helped them fudge the numbers. Some people think it was done intentionally to sabotage the Euro's strength, protecting the Dollar's position as the world reserve currency.

 

[AstroLad]

well time for another economy crisis, thank you

yeah thanks vanmardigan. jerk

 

[LyR]

yeah thanks vanmardigan. jerk

I'm not kidding, we only need a few 1000s more like him, educate yourself

 

[zomgbbqftw]

wow crazy world, my largest dept was -732€, I'm not kidding. (and yes, I'm an University student too, and yes I've a credit card)

well time for another economy crisis, thank you




offtopic, to prove my point

Yes, we are still in the middle of a world wide recession because of the American banking system collapsing under their own greed. A crisis made possible because American's took on more debt than they could repay, going bankrupt in mass; and blocking the flow of credit because the banks are too scared to loan.

If there was any point that the rest of the world had a reason to be narked at American's, it would be now. They call it "America's Banking Crisis" for a reason, it rippled across the world like a great Tsunami, damaging the economies of every country it hit.

Millions of people out of work, because American's had to have the big house and the big car they couldn't afford.

Even the freaking Euro crisis was caused by an American bank. Greece wouldn't have qualified to join the EU if Goldman Sachs hadn't helped them fudge the numbers. Some people think it was done intentionally to sabotage the Euro's strength, protecting the Dollar's position as the world reserve currency.

I see your head is still firmly in the sand...

 

[VanMardigan]

Wait, what? I'm causing the next financial meltdown? I have already borrowed more than I can afford to buy a big car and a big house?

 

[LyR]

Wait, what? I'm causing the next financial meltdown? I have already borrowed more than I can afford to buy a big car and a big house?

yes, single handedly !

 

[Mister Wilhelm]

I have a college degree, own my car, and have literally never had more than $1,000 worth of debt in my life.

This is because of the following things:

1.) I don't buy shit I don't NEED.
2.) I find ways to save money when buying the above mentioned things.
3.) I budget well ahead in case I do need to pay for anything serious.

I was not born wealthy and my parents did not support me much. I don't make much money either.

The most expensive thing I've ever had to pay for in my life was college. However, even with that I went to a cheaper school and worked my ass off to get scholarships.

Everyone else my age I know is in debt for something and in most cases, these things were preventable.

Unless you're going to be a doctor or something like that, there isn't much point in spending 30k a year for school. It's a debt you're not guaranteed to ever pay back.

 

[Nizz]

Damn I thought my 30k debt was bad.

Both you and the OP have kind of lessened the blow of how much debt I owe (about $12K). I really thought I had it bad until I read this thread.

And the OP is so close. Might as well go all the way and get that PhD. You're still pretty young.

 

[ngower]

I'm somewhere around $26k with two more years in my undergrad. Interested in getting my masters, but I don't know if I'll get funding as most places don't offer it. Really...****ing...terrified!

 

[Diatribe1974]

Here's how it works (in my world at least):

(The following assumes this is a voluntary purchase(s))

When it comes down to petty purchases (re: sub 2k in cost)
If you have to go into debt (i.e. to use a credit card) in order to buy it = Don't do it

When it comes down to semi-substantial purchases (2k-5k in cost)
Saving up 75% in cash + the rest in debt (re: Credit Card) = Perfectly fine as long as you pay off the debt ASAP (credit history of someone who can go into debt, but pay it off shows good pay trend history with creditors)

When it comes down to substantial purchases (5k-10k in cost)
Much like the previous state, having a solid 75% is almost a must, but a little more leeway from it, due to it taking more and more to buy whatever it is that's costing this much, but still, same rules apply here as it's easier to climb out of this voluntary debt pit if you don't have that far to climb from.

When it comes down to hefty purchases (10-20k in cost)
At least a 50% cash save up is mandatory here. The rest can be done in debt, but at this point (and here on out) a person has to understand that you must prioritize your future spending to make sure you get out of new debt ASAP due to how easy it can to fall into the "I'll pay whatever the minimum it is the CC bill/loan from the bank asks of me, I've got other shit I want to buy this month." mentality that causes a 5-10k loan/credit card bill to turn into a 10-30k bill.

When it comes down to (potentially) life changing purchases (20-???k in cost)
If you can't come up with 50% of the cost (re: if it's college & it's required quarter/semester setups), then stop right there, it's not worth it, due to the almost guaranteed failure to pay it back any decade soon, thus causing a nightmarish time of your life to begin.

But that's how I see things & I live 100% debt free most of the time & what little I do go into for, is paid off as quickly as humanly possible.

 

[mt1200]

Thats a LOT of debt.

I consider a lot to be more than 100000, or to be more precise, more than what you can pay with 5 years of hard work.

Thats why I want to upgrade my degree study on a public college/university, I dont want to catch any debts.

 

[BriareosGAF]

Finish your degree, education is a huge forward investment. Given our almost-certain hyper inflationary future, you don't need to worry about your debt as it will be denominated in circa 2010 USD.

Half-joking!

That said, I went to a state school and thought it was insane I had 17k in student loans when I graduated. I actually haven't paid them entirely, despite being able to do so, because they're locked in at the pre-GWB interest rates and I can get a better return on investment spending that money elsewhere.

 

[bill0527]

I say grind it out and finish it.

Hopefully your degree is in something worthwhile that has actual job prospects when you're finished. If this is the case, then I wouldn't worry about adding another 30k onto 100k in debt.

You and your wife have stable employment and can pay on it, so you've got that going for you. I would probably have advised you to never go into that massive amount of debt to begin with, but since you're that close to end, might as well finish.

$30,000 in debt when you make $30,000 a year is crushing debt. I don't think you're in that boat.