School loan question

[Altimus]

Ok here is the scenario. My GF is planning to go back to school full time. After checking out with various schools we came out to $45,000 for her degree.

I paid my way through school so I have not idea what the norm is for taking out school loans.

Personally I don't like taking someone's money, even if it's a bank. I paid my car loans off and am trying to pay my house loan of ASAP.

I'm telling her to work a little more and start saving money so she can knock that amount down from the start. But she wants to do a deferred loan and says she will pay it off when graduates and gets a better job.

But when she graduates the loan already will be at $52,425. Tag that alone with a 10-15 year plan to pay off and that is a lot of interest.

She is really set on this school so I don't if I should convince to go somewhere cheaper or what. Is taking such a loan on school normal?

[Husker_OS]

Re: School loan question

More people take out loans for school than you think. I was surprised to find this out when I started college. Out of state tuition can be a bitch. If pressed, I'd probably take out a loan to pay for school. The end profit of a college degree will easily pay for the loan.

[ubernoob]

Re: School loan question



I'm thinkin' bout goin fo a schola-ship.

[funky_chicken]

Re: School loan question

My student loans are adding up nicely. Does help that I am thinking of going to grad school after I get my bachelors in April.

[thegoat30]

Re: School loan question

Is taking such a loan on school normal?

I would say that it is pretty normal for the people that I know to have student loans racked up by the time they are done.

But, you can consolidate those loans and pay them off - like you said - over 10 - 15 years when you are done with school. That is a lot of interest, but it makes the payments much more manageble. Usually, the rates are pretty low for student loans as well if you go through the governmental programs available. The interest is also tax deductible if you meet the proper income limitations.

[JohnnytheSkin]

Re: School loan question

The end profit of a college degree will easily pay for the loan.

Key word being END profit...for the first several years a college graduate after loan payments will not be income competetive with a dedicated high school diploma person (i.e. not the Wal-mart guy, but the bank teller, etc.). It's the long term rate due to the salary increases and earning POTENTIAL that make college worth it.

Look, you take your loans, defer them, and hope that the interest rates drop again before consolidation. My wife and I will be free in another six years (10 year consolidations) and we each had near 20k. Unless you are rolling in the dough, have rich parents, or got lucky with scholarships...odds are you'll have to take a loan. Just be sure to research the rates and don't rely solely on the financial aid office. You can find competetive rates from outside lenders and banks.

[JohnnytheSkin]

Re: School loan question

The threshold for student loan deductions is pretty high as thegoat mentioned. I think it's like 5k a year max per person and unless you make near a quarter million per (my wife is already at the low six figures) you'll still qualify for the deduction.

[mjb2124]

Re: School loan question

I got lucky, my parent's paid for everything so I started out working in the black. Living at home for the first 4 years after I graduated was also a great move as I was able to invest my entire paycheck and watch it grow.

On the flip side, my fiance's parent's did not pay for her undergraduate or graduate (law school). She owes about 90K in loans right now. I'm starting to wonder what I've gotten myself into. On the plus side, once she does start working (waiting on results from the bar exam), we should be able to pay off the loans in no time at all.

[cjonesfan921]

Re: School loan question

I got by the first year with me and my parents, of course them paying most of it. But have to pull out a loan right now, which I did. Just waiting for the check in the mail.

[Pappy Knuckles]

Re: School loan question

I come from a family with no money, so loans were definitely the way to go in my case. Like someone else said, the potential earnings outway the downsides.

[TheGamingChef]

Re: School loan question

Look for any and all possible scholarships and federal grants. Those are paying all but about $900 of my tuition. I can pay an entire year's worth of tuition by working for a month in the summer.

[funky_chicken]

Re: School loan question

Student loans are a lot like medical bills. As long as you are making some sort of effort to pay them they leave you alone.

[Brandon13]

Re: School loan question

I'm glad I live in Florida. All I had to do was get a 3.0 GPA in high school and get a 20 on my ACT and I have 100% of my tuition paid for my first 2 years (community college) and 75% paid for the next two years. It's all funded by the Florida Lottery.

[Spectre]

Re: School loan question

I got lucky, my parent's paid for everything so I started out working in the black. Living at home for the first 4 years after I graduated was also a great move as I was able to invest my entire paycheck and watch it grow.

On the flip side, my fiance's parent's did not pay for her undergraduate or graduate (law school). She owes about 90K in loans right now. I'm starting to wonder what I've gotten myself into. On the plus side, once she does start working (waiting on results from the bar exam), we should be able to pay off the loans in no time at all.

I'm lucky too with my parents being able to pay. I have friends here in grad school that are gonna be 120,000 in the red when they graduate. It's worth it though, like your fiance, once they start working it won't take that long to pay them off. It might take a few years but its honestly better than scrounging together the cash now.

[Altimus]

Re: School loan question

Thanks for the info guys, much appreciated.

I told her that as long as she pays the monthly interest, I'll help her pay for books and what not.

That way when she gets out she will just have the straight loan with no interest attached.