jla, i think volunteer is trying to say that things changed.  a lawyer pushing 40s, maybe mid 30s is quite probably doing well, but lawyers in their upper 20s, maybe early 30s, are operating in a different climate.

things for young lawyers today are not the same as they were when someone around 40 was the same age.  it is not a question of 'paying dues.'

Crap, my wife is working from home today and our house is not zoned for that use.... I hope no one finds out

^ that also heavily depends on the type of law that you practice.  From what I have seen lawyers usually make more money and hit career milestones way younger than architects.  Don't get me wrong, I would rather work the most banal architecture job than the most exciting law job any day but that dosent mean that its a financially wise choice.  On the other hand, now that the economy is doing well, most of my friends in arch firms with 5-10+ years experience are making a decent living...

@Alternative

What is your background and where did you go to school? You seem to be very anti-Ivy and anti-taking out loans of any kind. What are the personal experiences that got you there? 

You can't just expect us to take your advice blindly without understanding the context. 

Who said anything about being anti-Ivy?

I'm against unreasonable amounts of debt taken out by twentysomethings who still don't know the value of a dollar. I'm also strongly against people taking out loans and expecting the federal government to bail them out because of their poor foresight. 

I'm posting during admissions seasons with the hope that one or two people will take this advice and not ruin their life with debt.

People can talk all the shit they want but I think of this as a little bit of community service that I can do while I work at my computer throughout the day.

So, you post blindly and purport to give people "advice" on their personal financial decisions without knowing anything about their background, values, or personal situation. 

And you're not even drawing from your own life experiences in this department? Why would you assume twentysomethings don't know the value of a dollar? Plenty of them do and are responsible enough to make their own decisions about their future. 

Yeah, it'd be great to have no student loans, but education is an investment. As long as they're aware of how much they're going to have to make in monthly payments and what they can take on. And as long as they're aware of the sacrifices they'll have to make in other areas. 

You wouldn't go around telling people not to borrow money to buy a house or a car, would you? Or does a mortgage also fall under your definition of "ruining your life with debt"?

I'm posting anonymously but I wouldn't be sharing my views if I didn't have personal experience—and accompanying opinions—on the matter.

I would also tell people not to borrow money for a house or a car if they'd risk defaulting on those loans and therefore risk foreclosure and repossession. Credit default can destroy your credit score and affect things like (1) employability (employers check your credit score), (2) being able to have a family, (3) starting your own business (people need business lines of credit).

But unlike home and car loans, student debt isn't dischargeable under bankruptcy, and in that sense has the power to be more financially ruinous than either of the not-so-analogous examples you've provided.

Have you attended grad school?

Let me re-post what I wrote in another thread:

There are only three degrees worth 100k+: T14 Law, Medicine, and M7 MBA. Most medical schools are worth the money (not Caribbean schools), since the supply of doctors is restricted by the AMA, so most will be making 150-200K+ after their residency, upwards to 500K+ in their career. Most will pay off their loans quickly.

A M7 MBA is worth the cost because it can vaunt you into Banking, Consulting, or Tech with a salary that can pay off their loans easily.

For Law, you have to go to a Top 14 USNews law school for a greater than 50% chance of making 160K in a corporate law firm and paying off 200K+ of debt. The work is miserable and most stay long enough to pay off their loans and leave since their chances of making partner are nil.

If you didn't go to the top law schools, your chances getting those corporate law jobs go down the lower the school's USNews ranking is. Go to the ones just below the top 14? You need to rank in the top 1/3 (1/4 to be safe) to get a 160K job. Even lower than that? We're talking 5-10% of the class. Even lower? Maybe the top 1-5 people. Everyone who doesn't get those jobs are left with is 40-50k jobs, or any job at all, servicing six figures of debt. It's bimodal distribution of law salaries.

Which brings me to Architecture school.

Architecture school is a lot like law school these days, except that there are no 160K jobs waiting for the graduates of top architecture schools. There is NO student who has made 160K at their first job out of Harvard GSD or Columbia or Sci-Arc. Yet they expect student to pay upwards of 200K to attend their prestigious schools.

You may get to work for top names, but you'll be working for peanuts, or free, for the privilege of working 80 hour+ weeks in some of the most expensive cities in the world. At least law pays you well for such punishing work! Don't let them find out what good deals starchitects are getting from their gullible graduates!

Many Architecture students think they are special snowflakes who will one day be the next starchitect or partner at SOM or whatever. A lot of architecture grads felt that way in 2008 too. Except that with these jobs, unlike the other degrees above, you don't have a 100%, 50% or even 10% chance of getting the top jobs with the top salaries to match. We're talking decimal percentages here even from the top programs after decades of working in obscurity. And taking 100K+ out for such low odds is foolish. 

Yes school can change your life, for better and for worse. If debt doesn't matter to you because you'll get it paid off by mom and dad, great. Get a full ride? Even better. Know the entire Forbes 100 richest list personally? You're set. All I ask is that you hire me in your sleek new firm as your head CAD monkey.

But for unconnected schmoes looking at 150K for a top M.Arch. degree? Not worth it for what you will be making. Take the money and run. Good luck all.

I think there are good loans, and bad loans. If all the loans you take out are federal, and you can elect income based repayment the first couple of years, or even if you don't, a $45,000 starting salary is still livable. You won't be rich, but you won't be starving. If you're taking out private loans (there's no good reason to do this), then you might be f***ed. 

This is what I've been told by recent grads with 6 figures in debt: your take home pay will be around $3000 a month. $1000 will go towards student loans. The remaining $2000 a month is totally livable. You can even set some aside for retirement. Many people live on much less. 

I haven't attended grad school. I'm actually in the process of taking out what you would probably consider an absurd amount of loans to start M.Arch in the fall. Ironically, for Columbia, which you mentioned somewhere else. 

But I do this as a twentysomething who knows the value of a dollar, has an excellent credit score, and is fairly financially literate. In fact, I studied finance for my undergrad. I do this knowing fully well that these loans mean I probably won't be in a place to buy a house or start a family until I'm 40. And I'm perfectly okay with that. As I said, it's a personal decision whether your education is worth the sacrifice. 

I don't appreciate people spewing blanket, one-sided bad advice that they aren't backing up with numbers, or even anecdotal evidence. This is the same kind of thinking that leads young people from disadvantaged backgrounds not to apply to Ivy league schools (where they could be getting a free ride due to scholarships and generous endowments) and instead opt for state schools or community college where they end up paying much more money. Someone along the way told them "it costs $65,000 a year to go to Harvard" and scared them off. This kind of misinformation just galls me. 

I think the advice to be giving out is instead: 

1. Have a realistic idea of the numbers involved with your decision. Sit down and do a spreadsheet. Research what your loan repayments will be, what your take home pay will be, and make sure you understand what it means to live off of that number. 

2. Don't take out private loans. They probably will put you in a position where you end up defaulting. And they are much less forgiving/flexible about repayment options. 

3. Make sure you're doing it for a school that has excellent job placement and networking opportunities. 

4. Seek out as many scholarship opportunities as you can, from the school and from outside sources. 

This is all advice I've received from recent architecture grads with six figures in debt. All of the ones I talked to were all happy with their decisions and gainfully employed. 

I'm sorry things didn't work out so well for you personally. But I wanted to share the other side of the argument for anyone reading this in the future. Have a very clear idea of what you're getting into. Grad school is a lot of money, but you are the only one who can decide if it's worth it. If having kids early and buying a big house are important to you (they aren't to me), this path is probably not for you. But there's no need to try and scare people off from investing in their education at all. 

Please contact me when you're financially ruined from your GSAPP degree. Not kidding, and good luck.

Richard your link is specifically limits for Direct Student Loans (subsidized and unsubsidized Stafford loans) - not all types of federal loans.  In theory a student could borrow an additional 87k in Perkins loans on top of Stafford loans over the course of his undergrad and grad school careers, and even more (up to total cost of attendance) in federal PLUS loans.  Not that I'm advocating doing that!!! - I'm just correcting your trail of misinformation.  Because all grad students are considered independent students for purposes of qualifying for federal loans (parents' finances aren't considered), a larger percentage of grad students than undergrads qualify for Perkins loans.

Just one other thing. My finances are fine and nothing has gone wrong wih my career. I have seen others whose personal lives were ruined by student debt. And, darling, 2 grand a month ain't shit to survive as an adult with a professional degree. If you don't like what I'm writing, then don't read it. Maybe start a thread asking people to blow smoke up your ass and applaud your decision.

this absolutely amusing people yelling at each other on how to feel about debt or spend their money.

You should believe in debt!

You should deny debt, it's not real!

.....

I get it, on one hand there are 20 somethings that can't think well outside mommy and daddy's house and therefore will probably crash and burn and in the end owe nothing because they will go bankrupts - so who cares, it's only debt? mommy and daddy will let them move back in, don't worry about them....

then there's the 20 somethings who are unsure, who I think Alternatives is trying to talk to, because they may actually try to repay their loans instead of realizing they may just be fucked when graduating and probably think an education should take care of them.

then there are 20 somethings who take care of themselves whether conservatively or high risk, and no advice is necessary.

The student loan system is a welfare system for the schools. The student acts as a pumping station for the funds from the Treasury to the school. In exquisite irony the "elite" private schools, like Columbia, have a bigger pipeline to the US Treasury per student than the state universities do. You could not make this stuff up.

Video killed

$40k minus $12k minus taxes leaves you with about $1680 per month.  It is almost livable, if you liked and will continue to like into your late thirties, living like you do in school.

Which is to say poorly.  Ramen noodles once a month is fine, but three times a week will wear on you while you watch everybody around you start driving new cars and buying nice bottles of wine.  And women may date you while poor and in school (investing in their perceived futures with an architect) but being 35, in debt, living in your parents basement is a big turn off.

its not that borrowing money is necessarily a bad thing...the main problem is that its become systematic. 

Richard your definition of "adverse credit" is the definition that most private lenders would use.

However, the definition of "adverse credit" used for federal student loans, including PLUS loans, is not directly related to credit score, and it isn't at all difficult for graduate students in particular to obtain PLUS loans, because current debt load is not a factor in these lending decisions, nor is credit score. This is why student loans are too easy to obtain, and how students get themselves so deeply in debt.

"Adverse credit" for federal loan purposes is defined as a credit history that includes a current delinquency of 90 or more days, or that includes one or more of the following derogatory events within the past five years: default on a federal loan debt without rehabilitation, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or other default determination.

If a student does have any of the marks listed above on their record, the only one that will disqualify them entirely is default on a federal student loan.  The others will usually make it necessary to include a co-signer on the loan, but won't disqualify them.

Richard I'm not suggesting that anyone try to get a co-signer.  All I was pointing out is that virtually nothing automatically disqualifies students from taking out federal loans.

The language that I posted above is straight out of the federal regulations regarding PLUS loans, under the definition of "adverse credit". It is NOT explicitly stated in those regulations that credit score is a factor. As for debt to income ratio: this is not a factor in the awarding of student loans.  That's the problem!  If it was, then nearly no students would qualify to amass 6-figure loans.  Instead, the students with the lowest incomes and having the least assets are actually the ones who qualify to borrow the most, because they have the highest documented need.

If the student doesn't have "adverse credit" per the federal loan regs definition, and if the school signs off on the level of financial need, the loans will nearly always be granted - no co-signer required. If they do have any of those specific marks of adverse credit then a co-signer would be required.  

And I don't argue with your reasons why a lot of people won't co-sign loans.  But you're wrong that nobody co-signs.  Think about this: nearly all private student loans require a co-signer - and the private student loan industry does big business: hence there are a lot of co-signers out there!

Richard you're generalizing based on your own and your acquaintances' experiences.

But the private student loan market exceeded $25billion last year, and close to 90% of those loans had co-signers - so not every student has a family whose financial situation or values are similar to yours.

With PLUS loans there are some additional reasons why parents choose to co-sign for loans issued to the student rather than take out parent PLUS loans directly:

1. The interest rates for student PLUS loans are much lower than the rates for parent PLUS loans.  

2.  Parents aren't eligible for IBR or other income-sensitive "pay as you earn" repayment plans.  Even if the student makes full payments (not income-sensitive reduced payments) each month, there are significant saving associated with enrolling in IBR, because all interest is waived for the first three years and afterward it does not compound.  This can amount to savings of tens of thousands of dollars over the life of the loan.

3. If the loan is in the student's name then as long as it's paid on time it helps the new grad establish a good credit history.  

I understand this is not something your family would consider.  There are a lot of potential pitfalls for parents who do take this risk.  Nonetheless, many do it.

You got trolled by Richard. Sorry to be rude, but am I the only one on archinect that actually skip through his posts?