working vs. loans

[EarthRootsStarSoul]

What are the pros and cons of working your way through college vs. taking out loans to work less? I'm a single mother BTW.

[meemee]

this is an extremely hard issue. and its very divided.

i chose loans and time with dd rather than work and less time with dd.

however i take out the minimum loans i need to. i try and get as many scholarships, grants that i can get.

however i am aware when i am done, i may not be able to buy a house, i will be in debt, i wont have a large savings. no retirement. however i havent taken out that much yet, but that possibility is there. as i go further on i will choose to work rather than not. for now i wont work.

i have seriously weighed the pros and cons. and still at the end of it - only one thing matters. that i spend time with dd NOW. the reason for that too is coz i am doing it alone with ex. he and i coparent. apart from that i dont have any other help. if there were siblings or gparents who were watching my dd while i went to school - those whom i could trust, i probably might work a bit. but since i dont i choose to take out loans.

it wasnt an easy decision. it wasnt a quick decision either.

i look at it this way. either way you may have to give up something. either i do it now, or later.

i chose later. twenty years down the line i might think otherwise. but i already know that the things like owning a house, a car, a retirement is not on my priority list. i may end up not even living in this country so that's why i am not so invested in my future with those kinda stuff.

my dd is smart. i dont feel guilty i am not 'saving' for her. i think she will do fine taking care of herself.

[JessieBird]

I agree, it is a very difficult decision and everyone will have a myriad of different factors to juggle. I chose loans and I regretted it deeply. Think long and hard about not only the difference it will make during the years that you are in school, but also the years after you are done school and repayment starts. A payment of a few hundred dollars a month didn't seem like very much to me at the time but it is incredible how much it held me back in life. I would have FAR preferred to have worked and taken more time to do my degree than to have the repayment burden for what felt like years and years and years and years. For me, the reality was that taking loans meant being cash-strapped and crazy busy for fifteen years (working extra hours, never taking a vacation, etc) instead of cash-strapped and crazy busy for just five.

[greenmulberry]

I didn't have kids when I was in school, (still don't now, I am pg with my first) but, I really would advise you to take the minimum loans you possibly can.

They are really a burden after you graduate. It's real easy to take out more loans than you need, so just be careful.

Having debt really hampers your future choices.

[JessieBird]

Originally Posted by meemee

i chose later. twenty years down the line i might think otherwise. but i already know that the things like owning a house, a car, a retirement is not on my priority list. i may end up not even living in this country so that's why i am not so invested in my future with those kinda stuff.

This is exactly how I felt. It took way less than 20 years - more like 2 - for me to feel differently, much to my surprise (as an eccentric travelling artist, I NEVER expected that a house or retirement would be of any interest to me at all). I'm not judging or trying to say "I told you so" in advance, just want to say that I can relate and that I'd encourage anyone facing this decision to take the longest-term view possible of the implications.

[sparklett]

For my first degree, I got through by working hard and not taking out a single loan. Same with my MA. When my husband and I went back to school, we decided to take out a few loans to make ends meet. For us, it's worth it to have the extra money.

Our repayment will be as much as a car payment, and since we have two nice cars, we're fine with it.

PLUS, the laws about repayment have changed. The most they can charge you per year is no more than 10% of your annual salary. Plus, if you work for the public sector or nonprofit, your loans are forgiven after 10 years. Both DH and I will be in one or both of those areas. For DH and I, this makes taking out loans a bit easier.

I would also echo the PPS and strongly suggest that you consider grants and scholarships first. I no longer need loans because everything is covered by grants, scholarships, and my teaching fellowship. We still take out a few loans for DH, but the repayment will be manageable.

[BetsyS]

I'm another that says take out as few loans as possible.

My dh and I both have loans. We each have 1 private and 1 public, so a total of 4 loans. In our case, the way the loans are structured, each loan is able to be up to 10% of our income, so since each one falls under that (but together, they are more than that), we do not qualify for income based repayment.

Student loans are forever. There is no bankruptcy, no way out, other than death. Those monthly payments dictate what jobs you take, where you live, and what you do for the next 15-20 years (or longer--two of our loans are on 30 year notes to make the payments affordable).

[sparklett]

I wanted to add that this subject recently came up my with SIL, who has $50k in student debt. She bought a house, transferred all of the loan debt to a credit card, then declared bankruptcy. I was just shocked when I heard that. She's secure in her house and will never have to pay another dime on her loan. Just seemed plain wrong to me, but I have a feeling that this happens more often than not.

[EarthRootsStarSoul]

THanks everyone! Right now I have tuition covered by grants, but I need to work for living expenses. I get good grades, I wonder how much I could get in scholarships.

[whoami]

How many years do you have left? Maybe you can get away with part time work?

I worked PT for 3 years and FT for the last since my employer paid part tuition for FT employees. Most of my tuition was paid through scholarships and I graduated with no debt. My only expenses at the time were food, gas, rent and phone, and this was before I had my son. I'm SO glad I declined loans. If I had to go back and do it all over with a kid I'd do the same.

[AndrewsMother]

I take out loans and receive scholarships and grants. I have two years left in a program that does not allow me to work. We have lived the past two years slightly financially strapped, and expect the spend the next two years counting our pennies. It is our plan to pay off our student loans in one year (about $50K). If we have lived with the bare minimum for four years, why not live this way for another year or two.

I took a job in January to help with my son's tuition, and from day one all of my check went to his school. I did not allow my self the opportunity to get use to the idea of having extra money.

I can't fathom the idea of paying back a loan for 15, 20, or 30 years when I can do it in 1. Borrowers pay off $40,000 to $60,000 automobile loans in 4 to 5 years but take ages to repay mortgages and student loans.

[2xy]

This is something I've been thinking about, as well. I've been a part time student for three years now, getting gen. eds and prerequisites out of the way. I start my actual program of study this fall, and things should be okay for the first year....I'll still be able to work.

In the second year (it's a 2-yr. program), I still have to take four classes plus do 32 hours per week of training in a clinical setting. That doesn't take commute into account. The hospital I'll be assigned to could be as much as an hour away. On top of that, my place of employment has a 3-shift/week requirement. If I can't do three shifts, I'll probably be let go. If I work three shifts per week, I will literally not have a day off for an entire year!

I've never done anything with student loans. All of my tuition and books have been covered by federal aid, state grants, and scholarships from my school. I don't even know where to begin looking for other kinds of scholarships. I have a 4.0 right now, so I guess I should look into that.

Also, can students with families qualify for any other kind of assistance?

[meemee]

Originally Posted by EarthRootsStarSoul

I wonder how much I could get in scholarships.

unfortunately depends on your field. if you are science oriented then good news. there are tonnes of scholarship. if not you really have to hunt around. when i was in the science program i got enough to pay for my living expenses. now its hard to find any decent amount scholarships.

check your school to see what scholarships they offer. there are places online through the fafsa that offer scholarships.

there are some companies that offer scholarships too. unfortunately of course mostly science related.

look for societies/groups like the Local chapter of for instance the archaeological society of XXXX. these are statewide scholarships and you'd be surprised how few people actually know or apply for these scholarships.

again if you are science then you also have the national science foundation - nsf.

[EarthRootsStarSoul]

Great, I am in science! Right now I'm just doing all my gen. eds. at a community college before transfering to the university for biochemistry. I don't have a time frame worked out yet. I'm going to meet with a college counselor when fall classes start to get a more solid plan worked out.

[BetsyS]

Originally Posted by AndrewsMother

I can't fathom the idea of paying back a loan for 15, 20, or 30 years when I can do it in 1. Borrowers pay off $40,000 to $60,000 automobile loans in 4 to 5 years but take ages to repay mortgages and student loans.

Well, I'll tell you how it happened.

I got out of school with $50,000 in debt to school loans, plus $30,000 in credit cards. The loans were all tuition, the credit cards were living expenses for 2 years (I was in a program that I couldn't work during).

I made about $10,000 more than I had before school. I completely and totally overestimated my earning potentional after school. Yikes. Shame on me. It was difficult to make the minimum payments, and I don't know, EAT. So, I refinanced for 30 years to make the payments tolerable. It wasn't a matter of living the same way I had in school. I was, but now I also had loan payments.

I got married, we were okay for a few months, making double payments, and my dh got laid off. He couldn't find a job, went back to school, and now I was supporting us (on that woeful salary), making both mine and his loan payments (he had them from undergrad). We survived on my salary, (stupidly) taking out MORE loans for his grad school tuition.

He graduated, I finally found a job. We paid off all the credit card debt.

I had a baby. My job wouldn't (like promised) make good on a part time offer. We couldn't balance his travel job with my schedule. I quit. No problems, right? We were still making double payments. Except. He works building materials. The housing market tanked. Big time. Which affected our home value (so we couldn't sell and down size), as well as his salary (cause no one is building anything new). So, back to minimum payments. Cause meanwhile, I had gotten pregnant again, so now had 2 little babies.

Oh, yeah, and the unemployment in my state went through the roof, so jobs in my field are very hard to come by, and when they do come up, they don't really pay for daycare for my 2 littles.

So, there you go. Life happens. And that's why it takes some people freaking forever to pay off a student loan.

FWIW, we also don't drive $50,000 cars. We paid $3800 for one of ours, and $10,000 for the other. Paid off in a couple of years for the big one, cash for the small one.

[AndrewsMother]

Originally Posted by BetsyS

Well, I'll tell you how it happened.

I got out of school with $50,000 in debt to school loans, plus $30,000 in credit cards. The loans were all tuition, the credit cards were living expenses for 2 years (I was in a program that I couldn't work during).

I made about $10,000 more than I had before school. I completely and totally overestimated my earning potentional after school. Yikes. Shame on me. It was difficult to make the minimum payments, and I don't know, EAT. So, I refinanced for 30 years to make the payments tolerable. It wasn't a matter of living the same way I had in school. I was, but now I also had loan payments.

I got married, we were okay for a few months, making double payments, and my dh got laid off. He couldn't find a job, went back to school, and now I was supporting us (on that woeful salary), making both mine and his loan payments (he had them from undergrad). We survived on my salary, (stupidly) taking out MORE loans for his grad school tuition.

He graduated, I finally found a job. We paid off all the credit card debt.

I had a baby. My job wouldn't (like promised) make good on a part time offer. We couldn't balance his travel job with my schedule. I quit. No problems, right? We were still making double payments. Except. He works building materials. The housing market tanked. Big time. Which affected our home value (so we couldn't sell and down size), as well as his salary (cause no one is building anything new). So, back to minimum payments. Cause meanwhile, I had gotten pregnant again, so now had 2 little babies.

Oh, yeah, and the unemployment in my state went through the roof, so jobs in my field are very hard to come by, and when they do come up, they don't really pay for daycare for my 2 littles.

So, there you go. Life happens. And that's why it takes some people freaking forever to pay off a student loan.

FWIW, we also don't drive $50,000 cars. We paid $3800 for one of ours, and $10,000 for the other. Paid off in a couple of years for the big one, cash for the small one.

Yes, life does happen. Barring misfortune, it is possible and realistic to pay off student loan debt within one to two years, especially if a person is living for example on 15,000 a year or less and their income doubles or triples after graduation.

There are still quite a few professions that it is realistic to expect to find a job earning well above averages wages even during our current economic situation.

My method might not work for everyone, but I have friends who look back and realize that they could have paid off their loans in less than three years, some in less than two years if they had maintained the same standard of living as during their college years.