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paying off graduate school debt?

Nov 24 '12 17 Last Comment
0e8r0908
Nov 24, 12 10:00 pm

I got into a good school but unfortunately with no scholarship- how do people deal with this situation? the tuition prices at some of the top schools are very high and it seems impossible

 

DaveZ
Nov 25, 12 11:18 pm

dont go.  you ll make no more than 38k starting out of school  lucky, working on extremely boring stuff like bathroom details. also it would help to have more about your background to give you some advise.  

 

1. do you have work experince

2. was your bs in architecture

ect.

Jonathan SandovalJonathan Sandoval
Nov 26, 12 12:35 pm

I'm going through the same issue, Loan Consolidation is my path. look for a fixed rate interest rate. 7.5% is decent FYI.

http://www.loanconsolidation.ed.gov/

LITS4FormZ
Nov 26, 12 12:43 pm

There are 154 NAAB accredited professional programs and not all of them carry the +100k price tag.

gwharton
Nov 26, 12 1:27 pm

DaveZ is correct. Don't do it.

Nov 26, 12 4:44 pm

There are three kinds of people that go to the top expansive schools: 1-the talented, 2-the moneyed and 3-the suckers.

If the school is offering you scholarships, then congrats, you've got talent (or at least the schools thinks you do).  If you can pay for the education out-of-pocket, then congrats as well, because you're already loaded and will no doubt leverage your social status for a good career.  

But if you're not in one of the first two categories then don't do it.  You don't want to be a sucker.  You might not realize this but right now you are just another applicant from a vast pool of interchangeable hopeful students whose only real value to the school is unlocking the vast sums of student loan money available.  These people are suckers because they assume the loans, pass on the cash to the uni and then spend a good chunk of their lives paying for it.  Even that 7.5% interest rate cited above is for chumps.  Have you looked at interest rates lately?  Student loans these days should be closer to 1% than 8%.  Total rip-off.  Oh, and you think "yeah, but I'll work hard and the schools name on my resume will help get a better job" then you are just setting your self up to get schooled again because when graduation rolls around it will be your handful of classmates in categories 1-talented and 2-moneyed who land the good gigs why you'll scramble just to get anything paying because you've got loan bills looming.

You are not a sucker.  Walk away from the shiny fool's gold.  And don't worry about fancy pants U. because they will inevitably find some other sucker (one is born every minute, right?) to fill your place.  Find a cheaper school or even a different career.

4 realz, yo!

Jonathan SandovalJonathan Sandoval
Nov 26, 12 7:54 pm

7.5% is for chumps yo...but thats real life yo! Im definitely not one of the rich kids or the talented. My dad was a janitor and never finished highschool from a third world country and my mother has an associates degree. I just have worked my ass off like my father taught me, and I like to think that there are still few among us in the profession that do the same. In fact I know a few at my current job. Yes I will be paying for the rest of my life...tough luck, thats my own deal.

I think things happen for a reason and Guys like ca$money above automatically rant, with what comes off to be a very uneducated tone of voice. Im lucky to have a job and be where I am at, because I have failed and I'm not scared to fall on my face again.

I say do what you want go with what feels right and prove everyone else wrong.

At the end of the day never do it for "your schools name" do it for yourself and the fact that one day your going to have to put food on the table for someone, and you better hope you've worked hard enough that your in a position to provide.

Good luck in all you future endeavors.

gwharton
Nov 27, 12 12:36 pm

Paying 7.5% interest on a student loan when the 10-year Treasury is currently yielding 1.7%?? You must be nuts. That's almost 600 basis points of real interest on non-dischargable debt! Holy smokes! No wonder student loans are such a racket.

accesskb
Nov 27, 12 12:55 pm

ummm Handsumcashmoney ... don't you think getting accepted into a 'good' school means he has talent or talented than most who don't get in?

gwharton
Nov 27, 12 1:11 pm

Getting accepted into a 'good' school only means that you're good at getting accepted to a school that has social validation status as 'good' and nothing else. Just like scoring high on the GRE means you're good at taking tests in a structured environment. There are correlations to talent and intelligence in those things (in some cases), but don't assume causation.

Isn't it interesting how universities have positioned themselves as gatekeepers of all our livelihoods without doing anything to justify that position? The priests jealously guard the doorway to heaven as usual, charging their exorbitant tolls along the way. They certainly are good at identifying those they think can pay the toll and make it through the door on their own, though.

Here's a hint: if you have the talent, smarts, and drive to succeed in architecture, where or even if you go to school will have no impact on your success at all. Nobody who matters, cares.

heavymetalarchitecture
Nov 27, 12 1:21 pm

Just do the math and decide what type of life you'd like for yourself. You can always apply again after working a year. You'll be making 38k out of school like DaveZ said plus or minus for your location. If you borrow 50k to pay for school, that's about $400 a month for 30 years. You will be semi broke early on, depending on your situation but you'll have a life and you might even enjoy your work. If you borrow more you will have no life. 100k for 30 years at $700-800/month means you will struggle to pay for anything, a new car or a house someday. Even if you get a great job at your dream firm, debt is a burden.

Nov 27, 12 1:47 pm

Getting into a prestigious school should imply that you've got talent and it should be a big step towards a comfortable & rewarding career.  But I would not argue that that is the reality right now.

Buyer beware, yo!

gwharton
Nov 27, 12 1:53 pm

One of the biggest problems in our society these days is that everyone has made a habit of systematically substituting "ought" for "is" in their thinking about nearly everything.

won and done williams
Nov 27, 12 2:36 pm

FWIW, my wife and I both graduated from a "semi-prestigious" university. I will say that I believe our degrees and the skills we learned at school did help both of us retain our jobs through the great recession while 60% of our peers experienced at least one lay-off. Hard to say if the math pencils out to justify our large student debt load, but I think relevant to the discussion.

Also, I'm shocked that anyone thinks 7.5% is a good interest rate on a student loan. When I consolidated in 2005, I got 2.8%. If rates are currently at 7.5%, I would have serious reservations about taking out large amounts of debt.

Nov 27, 12 4:11 pm

I'm still mind-blown by that 7.5% interest rate.  I know that this is an apples to oranges comparison but I think it's worth considering.  If you've been paying any attention to the sovereign debt crisis (especially in Europe) playing out over the past few years, you'll have noticed that countries start to get in real trouble when their bond issues rise into the 6% to 7% range (this is when bailouts are needed because the market has serious doubts about the credit worthiness of these countries). Greece is well beyond this threshold.  Portugal, Italy, Spain, etc have been flirting with it too.  This is the threshold where it becomes speculative rather than investment grade.  Junk bonds, in other words.

Now admittedly, I'm not a financier of student loans (although maybe I should be given how lucrative it looks) but it is entirely possible that a high rate of 7.5% is being set because they fully expect the student to default.  That is speculative, not investment grade.  Junk bonds.

Now how does that make you feel about your "talent" at getting into fancy pants U? That your talent and your career prospects are essentially junk to the people financing it?  They expect you'll default and that's why you pay a high rate.  They are preying on the naive emotions of the young & hopeful, looking for the next batch of suckers.  

And it's actually even worse than that because with student loans you are on the hook to pay even if you go bankrupt.  There's no out, they'll get their money regardless of how much misery you are forced to endure.  The risk is all on you.

And the less you have, the more likely you'll fail and so the higher the rate you'll pay in that vicious circle. You'd think a good education would be the ticket to a better life but the fine print reads more like a recipe for ruin.

Again, buyer beware, yo!

shuellmi
Nov 27, 12 4:27 pm

damn, i thought my 6.8% was bad.  all my undergrad loans are around 3-4%

gwharton
Nov 27, 12 5:04 pm

Related: http://www.zerohedge.com/news/2012-11-27/scariest-chart-quarter-student-debt-bubble-officially-pops-90-day-delinquency-rate-g

The 90+ delinquency rate on student loan debt has gone parabolic. LOL @ higher ed and US federal govt. Game over, kids.

t a z
Nov 27, 12 5:24 pm

Gov't student loans in the early aughts were variable.  One of the benefits of loan consolidation was that it would fix your interest rate.  If you set up an auto-pay plan you also get a 0.25% interest rate reduction.

Since the late aughts all the loan rates are fixed at 6.8%, 7.9% and 8.5% or whatever rate the gov't has set.  Now loan consolidation only provides the convenience of a single payment.

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