How much is too much College Debt?

Question

I just looked at my credit report, and I'm 85,000 dollars in debt for college loans- thats 18k per year, and I have another year left! I'm really stressed out, is this much college loan debt normal?

Answer 1

I think it depends on what type of degree you are working on. Undergrad or Grad? Law school or Medical school? Liberal arts or Science?

For example, if you are just getting and liberal arts degree( History, Social Science, etc.) then yes you are in too much debt. If you are going to law school then not that is not too much debt. If you are working on a degree in Biology or Chemistry intending to go to medical school then no that is not too much debt. I will graduate with 20,000 in debt and I will have an associates and bachelor degree. Are you taking out student loans to live off or are you actually paying for tuition? I have a friend that has 30,000 in student loans and has a year left, but she is majoring in education. Her loans will be paid off by the state of Texas because she will sign a contract to teach in a low income area. You should look into this, all your loans will be paid off. Of course you will have to teach at the worst schools in the state which is not very comforting these days. You should also start paying off some of the loan money now even if you can only afford to pay 50 dollars a month. Hope this helps.

Answer 2

"how much college loan debt is normal" is not relevant. Regardless of the debt of others, how much can you repay comfortably?

I will assume that you expect your education to provide you a future source of income. When you started on this path of education, what were your expectations for income?

If you had no expectations of income - and therefore no plan on how you would repay the loans, you need to come up with a plan very rapidly.

TOMORROW - that's Monday morning - proceed to the placement office at your college and get information about the last few years of graduates with your major. What jobs did they get? What field? Was it related to the major? Is it something that you would do? HOW MUCH DOES IT PAY? You must come away with a number! If your grades put you in the middle of your class, plan on an income of the median. Use the median, not the mean.

Next figure out how big your payments will be. You are at $85,000 now. Add $18,000 for next year to get $103,000.

Call your banker to get real numbers, but here are a couple of SWAGs:
$103,000, 10 years, 6% = $1.144 per month
$103,000, 10 years, 8% = $1,250 per month

If you can expect to make $30,000 a year with your major, repayment is going to be VERY difficult. (understatement) How can you alter direction toward a higher paying career without extending your studies much?

By the time classes start this fall, you need to have a plan in place.

Answer 3

$85,000? Which college did you go to? Did you pay for everything with student loans from classes, to books, to housing to a new car? You shouldn't have more than $26,000 in student loan debt after 4 years of college. Now graduate school is another story!