Can you put a price on education?

Question

I will soon be embarking on yet another milestone, college. While I am absolutely overjoyed at being able to make the transition from high school to college, my biggest fear is that after college I will be bombarded with debt. Please, tell me of your experiences, or current dealings with such a dilema.
All answers are well appreciated.

Answer 1

Amazingly enough, I was able to graduate with a Bachelor's degree with just a little over $5000 of student loan debt.

YES, this is possible!

Here is what I did to limit the amount of loan money I borrowed to obtain my degree:

1. Apply for financial aid EARLY every year. This means completing the FAFSA for the upcoming school year in the January preceding that year. For example, if you will be starting in the 08-09 school year (Fall 2008) then the FAFSA will become available in January 2008. File right away! This ensures that you will be awarded the maximum amount of free grant money possible through federal and state sources. Depending on what state you are in, there may be additional paperwork/forms needed for the state aid, so be aware of this and any additional deadlines. You will also be more likely to get a Federal Work Study job, which is on-campus part time work while you attend school.

2. Community College! While many students fresh out of high school may think that going to the university right away and moving away from home is THE most important thing they can do, it is much more financially responsible to consider staying at home with the 'rents, attending a community college for your lower division undergraduate work (where the tuition costs are extremely cheaper than even a state university), then transferring to the university. This allows you time to save up money because you won't have housing expenses to worry about and will be paying next to nothing for the same coursework you would complete at the university anyway.

3. Work. More than part-time if you can. Yes, this is possible. It requires a lot of focus, determination, and dedication, but having that extra money in your pocket means not having to worry about how the heck you are going to pay your loan payment 6 months after you graduate.

4. Only borrow what you absolutely need for educational expenses. If you're borrowing to help pay for a car, rent, or food, I suggest you get a job instead. It may be difficult, but again, it's better than not being able to afford your loan payment later. You will pay A TON in interest over time. It's just not worth it.

5. Live at home as long as you can. Most often students borrow money for living expenses and while living with the parents till you're 21 or 22 years old might seem like a drag, it will put you in a much better financial situation when you're done with school. Then you'll be ready for the real world with a clean credit slate.

6. Assess your ability to repay. How realistic is it that you will be able to obtain a job 6 months after graduating that will allow you to repay your debt? My monthly payment is currently $57 per month for 7 years, and that's only for a little over $5000 of debt! Imagine $30,000 of debt! You could be paying over $200 a month for 20 years or more! I was conscious of what I realistically could afford once it came time to repay. If you don't think yuo'll be able to afford it, don't put yourself through that stress.

I currently make about $4500 per month and am extremely happy with the choices I made regarding borrowing. I am currently a Financial Aid Counselor and Student Loan Specialist in a financial aid office at a college in California and see student make horrible student loan decision year after year, like taking out the maximum loan amounts each year although their tuition is waived and they are receiving over $10,000 in Pell, Cal grant, Work Study, EOP grants, etc. I see it one of my main duties to ensure that students borrow wisely and only what they actually need.

Lastly, just so you know where I'm coming from, I am a first generation Hispanic that grew up on welfare, so please don't assume that my parent simply paid for everything while I was in college. It was definitely a struggle, but I pulled myself up by my bootstraps without ending up swimming in debt.

Answer 2

If you are worried about student loan debt, an idea might be to attend the college with the best financial aid package without student loans or attend the local community college and then transfer to your dream college. However, since you are a member of two minority communities, there are scholarships out there to minimalize your student loan debt. I recommend utilizing several different approaches to locate money. I will include several free resources to locate college tuition money.

First, complete the FAFSA form either in January, early February, or by the earliest financial aid deadline to maximize your financial aid package. Even if you think your parents made too much much, you should still apply. This will qualify you for the Pell Gant (if your EFC is the right number), work study program, need based scholarships from the college itself, and federal student loans. You do not have to wait until you are accepted into a college. The FAFSA takes into consideration your family size, your savings and income along with your parents' income and savings. This must be filled out each year until you graduate from college.

Second, go to the high school guidance office. They have a wealth of information including local scholarships and state grants. The easiest scholarships to get are the local ones.

Third, the local public library has a book listing scholarships with some not even listed on the web.

Finally, join several free membership scholarship search websites. You complete a profile, and it will search for scholarships matching your profile. There is a scholarship for almost anything out there including wearing duct tape to the senior prom.

Good luck!

Answer 3

I have 31k in loans and I'm graduating next semester. I am a little concerned, but I think I will be fine if I live in a place where rent is affordable. I calculated my monthly payment at about $240 a month. However, I am trying to get a federal government job, and they passed new legislation saying that your (federal, not private) loans can be forgiven in 10 years if you work for the government!

If you are truly concerned, try to attend a public university in your state, not a private school. The public school will be cheaper. There are loan forgiveness programs for many public service jobs as well, so keep that in mind. (One job I'm considering pays up to 5k a year in loan forgiveness.) Try not to take out more than you need, of course.

Good luck. Message me if you have more concerns, I'm willing to share my (limited) experiences with you.

Answer 4

I borrowed about $15,000 for my undergrad, but I went to a state school in California. Private schools are much more expensive (usually around $25,000 a year and up), and if you plan on an out of state college (even if it is a state school) it will cost you more in tuition. You're not going to be bombarded with debt unless you borrow too much in student loans. Only borrow what you absolutely need.

Answer 5

Yes, $120,000+