Student loan/debt concern + money management solutions/strategies

Hey guys,

 I just have some concerns with the debt I would accrue after graduation if I were to pursue a graduate degree coming this Fall 2013. Even though I've been granted a "full" entrance scholarship, I would be walking out with at 100k in debt (in the form of federal student loans and from private banks in the U.S.). As I am an international student, financial aid outside of the one I have received is more difficult to come by. 

   I know location often times determines the general scale of one's salary right out of grad school, but here are some questions I would like answered if anyone is willing to reply. *If you can identify with the first question, then you are likely able to respond to the ones following that:

1. Is there anyone that out there that currently shoulders this kind of debt?

2. If so, how are you getting by? What have you found yourself cutting back as part of your           budget? 

3. Is it manageable? And how have you planned your repayment with your bank/gov? 

4. Can you provide a general/ballpark breakdown of how you budget your monthly income? (What percent goes to repayment, what goes to rent, what goes to food/transportation..etc.)

  I understand architecture really isn't a lucrative profession by any means, and we all push through it because we either  A) believe there is some kind of light at the end of the tunnel that will make this kind of financial instability "worth it", B) or the love of the practice/lifestyle far exceeds any kind of sacrifice. 

  These concerns more than likely has been asked and addressed in this forum, but I haven't been able to find anything that I felt was adequate. Please and thank you for those that can take the time to respond!

Mar 24, 13 10:39 pm

I'm not from the States but what does 'Full Scholarship' cover?  I'm guessing it doesn't cover all your expenses.  How would you end up with 100K debt?  Unless you're living on your own in NYC and attend grad school for 3 years, I can't imagine how one could have that much debt with full scholarship. :) 

I came out of undergrad with 35K in debt after 5 years and am trying not to think how long its going to take me to pay it back in this north american economy.  The loan officers have been hounding me to start making payments.

Mar 24, 13 10:48 pm
Jono Lee

 I'm sort of in the same boat as you. Coming out of undergrad, I've accrued about 29k, and have paid off a measly 2k of it (paying the minimum monthly payment). Being an international student, I would still have to pay the non-residential tuition (x3), along with basic living expenses like housing/food/transportation/books..etc.. (x3, for the duration of the program).

  I did some basic calculations, and it's basically come to that.

accesskb, what is your current situation? Are you living on your own, and with what debt total? Where do you live, and how are you getting by? I'd love to know! *Sorry, it sounds like I'm interrogating you, but you I hope you understand lol

Mar 24, 13 11:04 pm

i'm in a mess right now.. Back home living with my parents, still looking for a job.  Over due on loan payments by a year now.  I can't even pay the minimum.  Loan officers have been sending me letters and calls everyday.  I'm sorry but there is not much I can do beside avoid you all.  I'd work and make payments if I can find a job. xD   Grad school will have to be put aside for now, until I find a job, pay back my current debt and save enough for grad school.  I can't even begin to imagine those studying in US who've come out with 100K + or so in debt :/  I did not know non-residential tution is x3.  So what is your 'full scholarship' for anyway?  does it cover any part of your tution? do you get any money for expenses?  I though of applying to US for grad school but that certainly won't happen for another few years, if at all.

Mar 24, 13 11:51 pm

I realized our industry is such that you must have a backup plan to earn money on the side or when you're out of work.  There are many things we can do to make a living with our skills that aren't directly related to architecture.

Mar 24, 13 11:52 pm
Jono Lee

Oh, I just meant that the remaining non-residential tuition would be for 3 years. Works out to be about 40k in total.

  Damn. That must be hard on you man... I'm sorry to hear that. Shit...

Mar 25, 13 12:04 am

I had about 80 k in debt after receiving a m. arch about a year ago.  Since I used federal student loans my payment options are a bit different.  (I assume) Also, because I'm married our budget breakdown is pretty different than if I was single.  You're best option is probably to find someone willing to help shoulder the burden!  

It took me about a year to finally find a non-contact job paying about 50k.  Only you can know what your payment will be based on your interest rate and repayment options.  I use the federal gov. income based repayment option which saves us a couple hundred dollars a month.  Though my wife makes about the same as me, we live pretty cheaply and have been able to pay far more than the minimum required payment.  We keep our savings fairly low and make large payments ($4,000) about every other month.  We are prob not going to be able to keep this up much longer as it looks like we will need to replace a car pretty soon.  

I know the economy makes it hard to find a job, but i think it is prob. even more difficult if you have any immigration issues, I could be completely wrong since I don't even have second hand knowledge of that type of situation.

Mar 25, 13 12:16 pm

1. I've dealt with just about that much debt since graduating almost 4 years ago. From my experience… it's very do-able.

2. Honestly, I haven’t had to cut back on anything. I’ve always found consistent work, taught classes and did small projects on the side. Built up a nice emergency fund and a great savings account. Things were tight at times, but side work always made up the difference.

3. The payment is manageable. About 20% of my monthly salary. I’ve just had to mentally come to grips with the fact that I will be paying this back for a long time.  I’ve chosen to build up my savings rather than pay the loans back faster, as the interest rate is low and the payments are not too overwhelming. This might change as I get older, but for now it works for me. 

4. I use the standard 50, 30, 20 breakdown. 50% of your salary goes to things you need, 30% to things you want and 20% to savings. This way if you lose your job you can get by on 50% (mine is closer to 55% or 60%) of what you take in per month. If you're interested in a more specific breakdown email me. My wife busts my balls about keeping such a specific budget all the time, but it helps calm me down and keeps me from worrying so much. 

Looking back, I wish I understood the chalanges of taking on these kinds of student loans while I was in school, but I guess you live and you learn. Luckily this hasn’t been the disaster I thought it would be back when I got that first bill.

Good Luck

Mar 25, 13 2:08 pm

I had about 60k when I graduated with a BArch 2 years ago, and after landing a full time position after about 9 months of looking, I'm up to about $850 a month in payments. I drive an older car rarely, bike everywhere, don't eat out more than a few times a week, and am only able to save a little bit. Maybe 15% a month when I'm careful. However, at this rate, I'll have this payed off in 5 years or so. I got screwed by getting high interest rates for my 5 years of school, so I'm not trying to give anyone any more money than I have to.

You will have peers that are able to live in nicer places and afford more than you, but it's totally doable. If you can avoid it, I would recommend it, but if not, you can make it.

Mar 26, 13 1:42 pm
You will be fine. I graduated with 140k after graduate school. I struggled with finding a job and paying for the first year and now have it completely under control. I learned a lot in grad school and wouldn't change my decision of attending. Just try an line up a job while you are still in school. Sign up for income based 15% and all is good.

I will be paying for a long time. Maybe the max which is 25 years depending on how much my income changes but after 25 years it is forgeiven.
Mar 26, 13 3:51 pm

^ That will be my approach, as I'll have well over $150k in debt once I'm done with my M.Arch. At this point it no longer even matters if I graduate with $150k in debt or $200k, as my monthly payments will be the same for the foreseeable future. The biggest issue is that whatever gets forgiven after 25 years might be counted as taxable income that year, but I'll cross that bridge when I get to it. For all I know, we'll all be back to trading fur pelts for a living by then.

Thank Yahweh for the income-based repayment option, though, because I'd be royally screwed without it. I'm just glad I stuck with federal loans, and avoided private loans like the plague.

Mar 26, 13 4:13 pm

@davidcole @craigschabel

If you don't mind me asking, with near 150k in debt how much is your monthly payment. I hear a lot of talk on hear that anything over 100k will cripple you for life with payments of 1,500 per month for eternity.

I have about 30k coming out of a public school for undergrad and now am looking at some private and public M.Arch programs that I got accepted in with no scholarships. This means I'd be over 100k in debt after my education as well. 

Mar 27, 13 10:06 pm

As the name would imply, the Income-Based Repayment option is based on your income. Use the calculator here to determine your monthly payment based on your income and loan balance.

Mar 28, 13 12:34 pm

Is all the debt worth it after graduating? I mean is it really necessary rather than saving up and going to school when you have the money? I would like to hear opinion from you guys since I will be around $50-$90K in debt If ever I pursue the MArch degree from Pratt. Loans for int'l students can be paid up to 10 years...

Mar 29, 13 2:46 am

1. I graduated with about $80,000 debt. (4yr BS-Arch + 1yr M.Arch)

2. I'm being frugal, renting a room in a tiny apartment for $470/mo ($550w/ utilities). I don't notice how much I cut back until I spend time with friends to who attended other schools for other degrees, and have no debt and jobs w/ starting pay between 60-75k with a bachelor's degree. 

3. I currently set aside 70% of my monthly income for loan repayments (my monthly payments are $1500/mo). I'm hoping to pay it off within 5 years. 

4. Budget: $1500 loans, $550 rent/utils, $300/mo food, $50 phone. Health insurance is free through family (thank goodness). My minimum loan payments are about $800/mo, so I can use the other $700 of that $1500 total as an emergency contingency for unexpected financial situations.

If you're an international student, I'd recommend checking into other options. Schools in Europe are really cheap if you're an EU citizen. ETH is roughly 1000Euros/year tuition. Schools in Poland, Germany, and Netherlands are inexpensive too. Plus their internship/licensing system makes more sense (thru RIBA). I have friends from parts of Asia where university was free. Ask yourself what your motivation for attending school in the US is. Based on what I know as a recent graduate in the Northeastern US, expect a salary range between $38-45k to start if you stay here after.

I hope this may help.

Mar 29, 13 8:03 am

I'm just wondering if Pratt is worth it for all that loan? Or should I use it for another school with a better stance...I have been working for 3 years in my home country now so I don't know if it matters if I go to work there in the US after school. I'm still waiting for the Bartlett results could change my decision...

Mar 29, 13 8:18 am

@ lionshcra: $550 rent/utils,

huh? where the heck do you live?? My rent is almost $1000 per month and I live in Cleveland Ohio! Although it is a really really nice loft apartment, but with utilities I am at $1300 per month. Let's be realistic about your rent / bills. Budget $1000 for them.

Mar 29, 13 5:27 pm


I am being realistic about my bills. I live in an overcrowded run down apartment in an unsafe area of Boston. jawknow asked what my bills are, and that's what my situation is. Renting with roommates in a safe and/or nice part of the city is easily double that per person.

Mar 29, 13 6:51 pm

^ which goes to show you how debt has real implications on living standards... i wouldnt want to live frugally in a rundown, unsafe apartment for 10 yrs...

and yes... expect something close to 1000$ for rent+food in decent parts of the city

1500$/mo in loan repayments is veeryyy high... considering ull prob have a paycheck of around 2200$ out of school..unless u already have some safety savings

Mar 30, 13 1:51 pm

If you have federal loans, there's absolutely no reason to spend 68% of your paycheck on student loan repayments. A number of repayment plans are available that can drastically reduce your monthly payments to as low as 15% of your discretionary income.

Moral of the story: Do your research before making life-changing decisions based on bad information.

Mar 30, 13 2:35 pm

David, there are two schools of thought on loan repayments. One, like you suggest, minimizes the monthly payments at the expense of the end sum. The other looks at the end sum and does what they need to keep that as small as possible. Often those plans that minimize the monthly payments just mean that you'll pay more in total over the course of your lifetime... I know when I ran my numbers I would pay 50% more in total if I took one of those extended plans.

Mar 30, 13 5:34 pm

^ True enough, but people shouldn't feel like going to a decent architecture school necessarily condemns them to a life of poverty afterwards. Not that all good architecture schools are expensive (or vice-versa), but not everybody is fortunate to be a resident of a state where the local public university has a program that meets their needs, and even fewer are fortunate enough to get a free ride with scholarships or other aid.

Mar 30, 13 11:48 pm

What state doesn't have a good public architecture school? I thought you were from Ohio anyways, David? Only state I can think of without a good public school option is South Dakota.

Mar 31, 13 3:45 pm

What's good for one person might not be good for somebody else. I was a New York resident when I began grad school, and CCNY was among the schools I applied to and was accepted to. While I'm sure I would've gotten a great education there for very affordable tuition, I ultimately decided to go to Cincinnati for a variety of reasons. Likewise, a resident of Wyoming who wants to study urban architecture will likely have to go out of state.

Mar 31, 13 9:33 pm

In my opinion... the idea that it is ok to take on 200k in student loan debt because after 25 years (of paying the minimim monthly payment) the balance will be "forgiven" seems opportunistic and takes advantage of a system put in place to help people who can't afford a reasonable collage education.

The way I understand it is that debt is not "forgiven" it is absorbed by the federal government, to the detriment of the program and to the tax payers. We should appreciate the fact that a program like that exists, not go in with the mind set that "might as well pile on the debt now while the federal government is footing the bill."

Sorry, but I just can't see how to morally justify this to yourself, putting the burden on repaying your loans on tax payers. And what if so many people start doing this that the program is stopped by the federal government? That might be fitting. 

Am I missing something? I'm all for people doing whatever they see fit, until it negatively affects others, and in this case I can't see how these actions would not negatively affect the program. 

Apr 1, 13 9:53 am

I think that only the very poor would really be able to take advantage of income based forgiveness after 25 years.

It would be hard to avoid income increases as your career naturally progresses.  I've actually left the program as of today because the payment is getting rather high.  I'll still make large payments, but I prefer to keep the required payment small for added flexibility.

everyone should live like lionshcra at first, (s)he'll save a fortune in interest compard to the 20 yr payment plans.  

When those loan payments are gone we'll feel rich

Apr 1, 13 12:41 pm

To add a disclaimer to my earlier post, I  DO NOT recommend living somewhere unsafe for financial benefit. My roommates, friends, and I have all lived in my area for a few years and have a feel for where/what to avoid/ how to carry ourselves in order to stay out of trouble. Also Boston (from what I've been told) is generally safer  other cities, so my perception of what is unsafe may be different than the norm.

It is difficult (financially/quality of life) to keep up what I'm doing, so I'll probably move/scale down the repayment in a few months. But as shuellmi has said, living frugally (even only at first) and making a dent in the loans now s worth it (to me) down the road.

Apr 1, 13 10:54 pm

shellmi, I definitely view it that way as well, even lived without a car for a few years (in Los Angeles, where the common view is that it's a necessity!). I'm so looking forward to the day where I suddenly have basically an extra rent payment available every month because it's all paid off.

Apr 2, 13 1:36 pm
It wold be best to borrow the least ammt of money possible. $100k is a tough one to repay. I don't see people getting much more money based on where they went to school, so I say be frugal.
Apr 2, 13 7:22 pm

I think we are entering a new era of increased financial awareness and responsibility where people think twice before overreaching on their resources. 

Apr 2, 13 8:13 pm

^ you signed up just to post that link didn't you?

Apr 4, 13 2:27 am

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