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student loan debt for architecture school?

111
JBeaumont

Rick I'm writing from experience on this:  there is no "20% cap" on some types of older student loans, unless you consolidate them for 25+ year terms.  I'm not talking about loans from before most on this forum were alive.  I had loans from my undergrad degree (early to mid 1990s) for which this was the case.  They were federal subsidized student loans, but do not fall into the FFEL category.  Those loans have a 3-year cap on income-sensitive repayment, after which they go into full payments regardless of income.  They can be consolidated if you also have more recent loans, and then once IBR came along in the mid 00s that let them go into the 15% category - but only if you put them on a 25-year or longer repayment plan.  They can't be consolidated or restructured in such a way that they can ever go into the 10% category.  Laura doesn't say what year she first borrowed in.  Generally the first loan type that you take out, in the earliest year that you borrow, greatly affects how you can consolidate and whether you can qualify for IBR, PAYE, REPAYE, etc.

Jan 21, 18 2:32 pm  · 
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JBeaumont

If she first borrowed in 2007 then she's in the 15% IBR category, and forgiveness would happen after 25 years of payments. I think her plan to pay this off in less than 10 years by living frugally and taking on additional jobs is a much better plan than paying 15% of her income every month for 25 years, and then still owing income tax on an amount that's likely to be near or possibly even in excess of the original principal when she gets to the end of it.

Jan 21, 18 4:45 pm  · 
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Gloominati

For me grad school resulted in much less debt than undergrad.  I didn't have parent support so in undergrad I took out about 40k in loans.  For my M.Arch I got grants for most of the tuition, and was a TA in most semesters and had a part-time and summer job in a local architecture firm so all of those things paid most of my living expenses.  I had 14k in loans over the 3 M.Arch years.  The grad school loans were all Perkins loans, so pretty low interest and I repaid them within a few years of graduation.  The undergrad loans were more problematic - they were from the 80s and 90s when interest rates even for federal subsidized loans were in the 8% to 11% range so the payments were much steeper than they would be now for the same loan amount.  There wasn't any Income Based Repayment or any of these other plans to limit payments at that time. You could apply for a hardship deferral if your income was sub-poverty level, but then interest would still accrue the whole time, so you'd be much worse off after the deferral maxed out.  There was a rule back then that people working in architecture firms full time and enrolled in IDP could defer their payments and interest for their first 2 years after graduation, so that was helpful, but that policy went away in the mid 1990s. I consolidated for lower payments, but then tried to double up on payments whenever I could so that I wouldn't end up in repayment for 20 years, and ended up paying them all off in less than the original 10 years by living/working in a fairly affordable mid-sized city during that time.  I don't regret the schools I chose or the route that I took, but I do kind of wish that I'd gone to school a decade later when interest rates were much much lower.

Jan 21, 18 3:41 pm  · 
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Gloominati

Huh? You have more than 38k in loans from 2 or 3 years at a state school, when you went there in your 30s after running 2 or 3 businesses for more than 10 years and living with your parents? I imagined you had a pretty healthy savings account built up at that age to put toward college and wouldn't have had to borrow. What do you spend your money on?

Jan 21, 18 4:56 pm  · 
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Gloominati

Where did the 38k come from that you put toward paying it back this year?

Jan 21, 18 5:31 pm  · 
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Gloominati

It still doesn't seem like the math works out. Community college tuition was what... $100 or so per credit? So even if you took 36 credits a year, you'd only be paying a few thousand dollars a year. It seems like you should have had about 18 full-time earning years at this point, right? Even assuming 8 of them were spent primarily as a student and had little or no income, what about the other 10? You live at home so probably have minimal rent. You say you don't really socialize, you talk about living on ramen noodles... you'd have to be spending a hell of a lot on books and advertising to use up 10 years of income. Do you have some sort of expensive hobby, or habit?

Jan 21, 18 5:41 pm  · 
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zonker

I paid for all my tuition out of savings - my Mormon neighbors told me I was not being realistic " you should put that money away for retirement" it was a great return on investment - a case were idealism won out over pragmatism 

Jan 21, 18 5:11 pm  · 
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marcelamardari

Everyone is spending a lot of money at school it is important to know the limits with the loans.

Jun 9, 20 6:04 am  · 
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Jaetten

I'll include my Int Des on this as well:

£50k Int Des

£20k total for for B.Arch and M.Arch (not yet complete, prices based on current rates of RIBA Studio course) £1k Part 3

Ignoring the Int Des, £21k for Architecture in the UK is a fantastic price. There was an article in AJ that stated UK qualification could cost up to £100k depending on the means tested student funding

Jun 9, 20 11:05 am  · 
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midlander

i'd love to see updates from the original batch of posters in 2007.


myself: paid off about 5 years ago with help from my parents. not a big amount compared to many of these on here.


i took my father's emphatic advice (coercion?) to decline the expensive top-ranked school for the great offer from a second choice and he offered to cover any remaining expense. i guess it was good advice.


ii often wonder if more pressure would have motivated me to do something more ambitious in my work. probably not! i've had staff from my top choice working for me - they're great. but they seem no happier with their career than me, obviously.

Jun 9, 20 11:59 am  · 
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midlander

add detail: roughly $20k usd for a b.arch

Jun 9, 20 6:46 pm  · 
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Non Sequitur

This is always a great topic and I wished I had added my own numbers because I honestly can't recall them anymore.  From the best I can piece together, I think my M.arch cost 18 to 20,000ish in tuition, so double that to factor in living expenses + maybe 20ish left over from undergrad?  Don't know but I do recall having 10k removed from my gov loan just because I filled in some form.  So, let's say 50k total for both degrees and that's in 08/09 canadian dollars... so 35kUSD.  It might actually be less than 50.

It'll all a little blurry because I absorbed all my wife's education and private loans shortly after getting married and I lost track of who had what.


Jun 9, 20 12:21 pm  · 
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+1 midlander, would be nice to see updates. While not an update, I'll add my numbers to the list...

I had a little over $25k from undergrad and grad school loans combined at a public university (4+2 M.Arch). Around $4.5k left to pay on all of that at the moment. Pre COVID-19 I was thinking of paying them off with the money I have in savings, but with the loans in automatic forbearance and accumulating 0% interest during this time, I've been making my normal payments and keeping the money in savings in case I need it. Unless I lose my job during all this, I'll probably pay them off in full just before they come out of forbearance this fall.

I could have paid more this whole time and probably would have had them paid off a few years ago, but my wife and I first met with a financial planner 7 years ago (maybe?) and since the interest wasn't that much, we kept a steady payment on the loans, and instead budgeted toward buying a house and putting money away for retirement. Growth on those investments has outpaced the amount we've paid in student loan interest (which we've mostly been able to deduct from our taxes anyway) in those years. We're overdue to meet with him again and talk about our next goals and how to adapt our financial plan to get there. 

Jun 9, 20 5:29 pm  · 
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Susz

All my loans are from graduate school. About 48k+ to cover reduced tuition & living expenses over 2.5 years in addition to interest accruing while I worked abroad on an extended internship one summer/taking out a little extra to graduate with some cushion. 

I've knocked off almost half of that since graduating in the past year by living at home with the parents and working in my hometown. It is not glamorous by any stretch but boomeranging pays. I've been able to travel some and save as well. I was actively gearing to move on/out in March when COVID interrupted all of my plans, let alone leaving the house. I try and reward myself every 10k that is paid off--the first 10 k I bought my first ever El Croquis book, the compiled one for Enric Miralles. Hope everyone is staying safe and keeping their chins up :)

Jun 9, 20 9:57 pm  · 
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shellarchitect

Love this kind of stuff...

Got an march in 2011 about 60k for that plus about 30 for undergrad.  Wife had around 20k for her undergrad degree as well, so roughly 110k total.  

We dicked around with income based repayment programs and deferments when i was unemployed.  Around the time i got licensed the income based payment schedule became less attractive.  We also met with a fin. advisor around that then.  He spent a couple months lecturing us on the need to get serious about paying off our debt.  

It took us about 5 years to pay off the high interest (6.8%) bulk of it.  We still have 16k left, but the rate on those loans is around 2%, so we are happy to pay the min. for however long it takes.  

Paying off that debt was a huge relief, also gave us a great deal of confidence that we could achive whatever we wanted.  We just refi'd our house to a 15 years loan and expect to significantly reduce my work schedule (can't imagine ever retiring) before that's paid off.

Jun 9, 20 10:21 pm  · 
1  · 
shellarchitect

absolutely! Wife was laid off and I'm doing 32 hour weeks (with 20% pay cut) but I really don't have any complaints. Working at home is much less stress. The extra free time is really nice!

Jun 24, 20 9:55 am  · 
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whistler

Graduated from a Canadian University in 89 ( masters and bachelor degrees ) with approx $24k in debt,  $8k was forgiven as a grant (I finished my degree within an allotted time and didn't drag out school).  so I had $16k to pay back starting six months after I finished school.  Bank rates and loan repayment interest was out of whack  some how so my dad suggested I get my grandma to pay it off and then in turn just pay her back.  Her long term savings account was giving her way less and so I upped her loan % by a point and paid off my loans to her in four years.

 I felt that was reasonable given the measly wage I was making and I was single and found a way to live cheaply for a few years before making a wage where I actually had some disposable income.

I will say some of the stories above are shocking and so soul crushing.  All I will say is that the value of your education is important but not worth you or your family living in poverty for the next how ever many years to pay it off.  That's just bad business folks, some will disagree. But no one ever said Architect's were business smart.

May 31, 21 8:13 pm  · 
1  · 
RJ87

I don't want to judge others based on their numbers, because it was their decision. But I would be interested in seeing a cost benefit analysis study where they determine at what level of debt would it have been more financially prudent to not get a degree. Particularly if you only get a bachelors / never get your license I bet it's not as high as most people think.

Jun 1, 21 10:02 am  · 
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lbls1

Zero.  Everything is paid in full.  Feels good to say this.

Jun 3, 21 8:19 am  · 
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starling

let’s see…


I’m currently sitting at about 39k in private loans from my undergraduate. And last time I checked, my federal loan was just under 300k, for undergraduate and masters.


Yes, that’s 300k, not a typo.


Many of you will ask “how the hell do you pay that off?!”


I don’t. It’s simple math. Even if I could afford the standard monthly payment, which is more than my salary, the interest accumulating is astronomical. It’s a lost cause.


So, I must be living in poverty now? No money for saving or spending? Constantly stressed about my next paycheck and how I will afford anything?


No! I will pay an income based payment for the next 20 years, and then my loans will be forgiven. I cannot really do much else about this, it’s literally my only option so I can’t put much worry into this.


Also, if you’re savvy about reducing your taxable income, you can lower your student loan payments significantly. I maxed out my pre tax 401k and my FSA, and I don’t file taxes jointly with my partner. Not only am I saving a ton, but I’m also reducing my student loan payment.


I have a great job at an architecture firm, met my partner, we have a lovely apartment in NYC and we do whatever we want and buy whatever we want. 


It doesn’t have to be crippling.


Would I recommend this? No! But these were the cards that were handed to me, so I did the best I could. 

Jun 5, 21 9:21 am  · 
3  · 
Non Sequitur

20years to repay? Ridiculous. 300k for an arch degree? That’s 10x what the degree is worth.

Jun 5, 21 9:53 am  · 
2  · 
starling

Agree. Absolutely insane. Welcome to America, land of the indebted, home of the naive.

Jun 5, 21 2:32 pm  · 
3  · 
midlander

did you take on the debt with this plan or had you been misled into thinking it was an appropriate value for the degree?

Jun 5, 21 6:55 pm  · 
2  · 
starling

Who in their right mind would plan this?

Jun 5, 21 8:55 pm  · 
3  · 
square.

thanks for being candid- it is indeed a crime that taking on that level of debt is permissible. best of luck, seems like you are as content as you can be.

Jun 6, 21 11:32 am  · 
2  · 
flatroof

At the end of those 20 years, currently, you will be taxed on the forgiven amount which will be substantial at that point, maybe 400k+. Or just work for the government for 10 years and you won't be taxed. But funnily enough, it's easier to work around IRS debt than student loan debt. Though I have a feeling Biden or some future dem president will get rid of this so-called "tax bomb."

Jun 7, 21 6:13 am  · 
1  · 
starling

​that is definitely a possibility, but it doesn’t really change my current options. And, we’ve already seen that almost 90% of people who went the PSLF route got dicked, so I’m not going to sacrifice my career track at this point and take a lower paying job with less potential for growth. No one knows what the student loan landscape will look like in 20 years, but when it comes, I’ll find myself a good tax lawyer.

Jun 7, 21 7:33 am  · 
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square.

the tax has been suspended through 2025 (was snuck into the covid relief bill), so maybe there is hope that it will be eliminated permanently.

https://www.forbes.com/sites/z...

Jun 7, 21 9:05 am  · 
1  · 
starling

Hopefully it does. But if not, given that most of these relief benefits do not apply to those with private school debt or high incomes, there will be a lot of very rich and influential people facing a very large tax bill in 20 years, and we all know how rich powerful people feel about paying taxes…

Jun 7, 21 12:18 pm  · 
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RJ87

How does the income based system work? What does it end up being as a percentage of your expenses? I was mostly curious if its enough to make a dent or if the total debt amount will just go up over time.

Jun 7, 21 2:07 pm  · 
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Non Sequitur

so, if I understand correctly... you pay the 300k + interest over 20years then the balance is forgiven at the end of term but the gov considers it as income for tax purposes?

Jun 7, 21 2:21 pm  · 
1  · 

Nearly 20 years ago my architectural degree cost $30K for a BArch from a state university.

Jun 7, 21 2:46 pm  · 
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square.

right ns, but you probably won't pay the full 300k, unless the math is so bad that you're paying very high levels of interest.

Jun 7, 21 2:50 pm  · 
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starling

Don’t have much time to explain the entire education department’s plan for repayments, there are many options and can be quite confusing and convoluted, but this is my situation: I enrolled in an income-based repayment program with my loan servicer (the US federal government) when I left school, because the standard repayment plan was not an option for me. The terms of this plan is that I pay no more than 15% of my “discretionary income” to a monthly payment. This amount is calculated every year by the government and is based on my adjusted gross income (income after tax). The interest on my loans is about 8%, almost double what it was when I first started my degree. The repayment plan is 25 years of “qualifying payments”, after which the balance will be forgiven, and currently, considered income. Because the interest and my balance is so high, even paying a $900 per month payment, it does not even cover the interest accruing, so my debt is increasing, not decreasing. This is just my federal loan! I still have a $40k private loan I that I will pay off in a few years, given this one is a much lower interest rate, and private loans don’t qualify for income-based repayment plans. Once the federal payments resume in October, my combined monthly payments for all my loans will be around $1500, which is about 37% of my take-home pay. America!!

Jun 7, 21 3:25 pm  · 
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Non Sequitur

^that's more than my mortgage....

Jun 7, 21 3:43 pm  · 
2  · 

That is WAY more than my mortgage . . . dang.

Jun 7, 21 4:03 pm  · 
2  · 
midlander

long term inflation will save us all

Jun 7, 21 7:41 pm  · 
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whistler

or just declare bankruptcy, suffer through 7 years of government / financial hell and start fresh! apparently it worked for the last president !

Jun 7, 21 4:16 pm  · 
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flatroof

Fed loans not dischargeable in bankruptcy. Thank Biden for that he pushed it in 2005!

Jun 7, 21 4:52 pm  · 
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whistler

then all the more reason to not be a fool and get burdened with a loan you can't run away from or absolve!

Jun 7, 21 5:02 pm  · 
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flat - you're mistaken. When I first went into school in 1997 federal loans were not dischargeable in bankruptcy.

Jun 7, 21 5:28 pm  · 
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square.

i don't like to lay the blame entirely on individuals trying to navigate a complicated system (which they didn't design) in order to fulfill admirable goals (deemed so by society at large)... but that's just me.

Jun 8, 21 8:41 am  · 
1  · 
Volunteer

All this debt to be eventually licensed as a registered architect. In many states no college at all is required, just experience in a firm. Even if you have to move to set up residence in one of these states it would be preferable to getting screwed over by the higher education juggernaut, especially by their inflated graduate school tuition which is a premium to their already insane undergraduate prices. 

Jun 8, 21 9:03 am  · 
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square.

some people view education as an more than simply job training, but also as an opportunity to learn something. not saying that justifies the price necessarily (although when i weigh all the costs, what i learned in grad school is invaluable compared to what i'm getting in practice), but by your argument those interested in architecture should forgo any sort of broad based education and take the path of least resistance, to resemble something more like an associates degree.

i agree that there is much to blame about higher ed, but i also question just as much a profession that cares less and less about the things that have made architecture historically impactful, and more with technological/technocratic issues that they prefer to follow the lead of.

Jun 8, 21 9:56 am  · 
1  · 
Volunteer

Much of what is taught in school today is more akin to indoctrination than education. This is especially noticeable in the 'social sciences' courses. Sadly, many architecture schools seem hell-bent on becoming as woke and politically correct virtue signalers as they possibly can be. Yale just cancelled its Western Civilization program (too white) and Princeton just eliminated Latin and Greek requirements from the Classical requirements (to enhance the study of some sociological fad that will be gone in a year). Where does the dumbing down end? If a student does not want to incur debt or diminish his family's finances by avoiding what has become a propaganda bath it should be his choice.

Jun 8, 21 11:19 am  · 
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square.

wow, that went off the rails quickly.

have fun with your arQitecture...

Jun 8, 21 12:00 pm  · 
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starling

I definitely never set out to accumulate so much debt “just to get an architecture license”.


When I was 17 I applied for college just like anyone else, because, what other option was there? In my house/community/school, you go to college after high school.


Somewhere in that process my parents told me they wouldn’t be paying a cent, which was surprising for a few reasons, but all they said about it was “you can take out loans and pay it back just like we did”, and they didn’t have much else to say about that. So, I took what college credit classes I could in high school thinking I could offset some costs, not knowing that an architecture program would make me fill those in with various electives anyway, so it didn’t actually matter.


I applied to one college because my parents gave me a guilt trip when I told them I was thinking of applying to their “rival school”. Ironically, that rival school is one of the top 5-year accredited programs in the US (did not know this at the time), so it would have been a better option than the school I ultimately ended up at, a 4-year non accredited program.


I didn’t know a thing about accreditation or licensure when I started school. I learned the program was not accredited in my first year, and that if I wanted to be licensed someday, I would need a degree from an accredited school (in the state I was currently in). I did consider transferring, but at the time I was still deciding between an architecture focus or a visualization focus, so I decided to stay and, besides, my dad had 3 degrees and no debt so, I would probably be fine.


I realized about the end of my 3rd year I wanted to leave the state for my graduate program. A mix of angst and competitive anxiety about moving forward maybe. This is where I got misguided.


At this point I was already aware of my debt, but it was something then that was a realistic number, with low interest rates, that I could actually pay off (and still will). It was 2009 and there were not many jobs and my pride would never let me move back home to work at Sonic Drive-In again (even though sometimes now when I go there, I fantasize of a missed life as a Carhop). I was determined to go straight into Grad School.


I got into one school: Pratt. No scholarship. I could easily do the math. Did it stop me? No. Were there people who cautioned me about the cost? A few. But I did it anyway, and I didn’t do it because I really wanted to go to Pratt. I did it to get the hell out of Texas.


I own all of these decisions. I wasn’t mislead, I wasn’t conned. Sometimes I wasn’t given all the information I needed, but I also didn’t obsess over details that weren’t immediately important. I decided that I was going to do what I wanted, and that I would have pay for it later. I never had the privilege to get some help from my parents, or get a scholarship, but I didn’t want that to be the reason I didn’t go to college. 


I grew up with anecdotes from my parents about how they would work a summer job to pay tuition. My mother’s father would sometimes visit her while she was waitressing, and leave her a $100 tip, which would pay a good chunk of her rent for the semester. And I never heard of anyone having the sort of debt I have now, never even crossed my mind that it could even be a possibility.


I don’t know why I let my parents opinions stop me from applying to their “rival” school. I didn’t even like them that much at the time anyway.


Hindsight is 20/20 I suppose.

Jun 9, 21 6:19 pm  · 
2  · 
midlander

you have a healthy attitude about this and i hope it works out well eventually. everyone fucks up something in life - if this is yours, well it's survivable at least. the lesson is finding out that the institutions society presents as being valuable and for the public good are often self serving and predatory.

Jun 9, 21 8:10 pm  · 
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