"Reasonable" Student Debt

[edenky22]

I've heard the term "reasonable student debt" talked about in different places a lot.  How does one decide what that amount is?

[zibazinski]

Rule of thumb is no more than a years salary at the job you're going for. DD's PA school is about 70k which includes room, board, tuition, fees and everything. She will on the low end, make 80k her first year. So that's good student loan debt.

[lynnerself]

DD is going to be taking on about $100,000 to go to physical therapy school. I don't think she will make quite that much a year.
But that's what it costs, so what can you do?
It still should be a high paying and in demand career.

[zibazinski]

You know what's sad? That used to be a 4 year degree that you could get from a public university.

[cael]

I had about $14k in student loans when I graduated (10y ago!!! ) it's going to be paid fully off this summer. I feel that was reasonable enough... DH has about $12k for his associate's degree. I don't think that's unreasonable, but for CC I wish it was less... my parents helped me finance my bachelor's degree so my $14k was just my portion, they probably had close to an equal amount in their names.

A good friend of mine got a $60k masters degree, got a job making $38k/year teaching that she recently lost and is probably looking at a daycare job for now that may make her like, $15/hour. I just could not even fathom a degree that expensive. I'm paying out of pocket for grad school now, but if I take out loans my goal is to have it be less than $10k.

[luckyme]

Jun 2, 2015 19:07:15 GMT -5 lynnerself said:

DD is going to be taking on about $100,000 to go to physical therapy school. I don't think she will make quite that much a year.
But that's what it costs, so what can you do?
It still should be a high paying and in demand career.

I know it's crazy, DD is going for a PTA degree. Pay, around here, is probably only around $38K, but she should graduate w/ less than $15K in debt. I think that is fantastic.

It is still only a 2 year program, but very intense, mainly all PTA courses. Her instuctor won't be surprised if this turns into a 4 yr degree very soon.

DS is going for ECE, just starting. I am hoping he will graduate w/ about $27K in debt.

My niece kept deferring, and she went from $11K to $40K! She makes less than that, also as a teacher. But she has only been teaching for a year.

[The Captain]

Jun 2, 2015 18:14:34 GMT -5 zibazinski said:

Rule of thumb is no more than a years salary at the job you're going for. DD's PA school is about 70k which includes room, board, tuition, fees and everything. She will on the low end, make 80k her first year. So that's good student loan debt.

.  Of course there are exceptions where the pay may start out low but ramp up quickly after a few years (medical specialities come to mind). 

I had about 20K in SL's when I graduated with a degree in accounting over 25 years ago.  My first job paid 21K a year.

I had those loans paid off in five years throwing all raises and OT (for the sweet period I was actually paid OT!!!) at them.

It just many any sense at all to me to spend a lot to load yourself up with debt you won't be able to afford with a low paying job.

[Deleted]

What worries me about judging "reasonable" on the expected salary after graduation, is one, what if that isn't what you actually get?  And two, what if a kid goes into school planning on doing X, but then changes to Y or even quits altogether?

I'm going to call reasonable an amount that won't be insurmountable even making a pretty low salary.  Right now, I think the federal loan limits fit that bill....which is somewhere around 20K or so I think.  This is for undergrad.  My opinion changes some for professional degrees beyond that.

[souldoubt]

You may not actually get that exact salary but I think the point is to not go and rack up 100K+ in student loan debt while going into a field that starts out at about 30-40K a year.  

As far as changing degrees or quitting all together go that's just something a student has to consider as a possibility when they start out and hopefully really think about before making those decisions.  That sounds like a lot for an 18 year old and it is but that's just the nature of the beast once you're an "adult." Life is all about choices, there are repercussions based on the choices we make and many of those choices involve money.  

[Deleted]

Reasonable only has to do with what you can afford and you have the advantage of knowing what your pay will be.

The more you can save/live like a college student   to cash flow the degree, the better it will be. Federal Graduate loans are 5.8 - 7.1% interest, so it is not what I would call cheap money.

You can look up an on line loan calculator & see what the payment will be: plug in 7.1% interest and a 20 year repayment and then you will see the impact on your budget of the loans.

[cael]

I'm a little disappointed I can't take out loans for school unless I'm taking at least 6 credits, but in the end it'll just mean less debt, so overall it isn't bad. Just frustrating that I need to divert some house savings to paying for my classes.

Hoping next spring I can sign up for 2 classes, take out a larger amount in loans then save the refund to pay for the next few semesters...

[wvugurl26]

I had just over $19k to get a masters in accounting. I had no loans for undergraduate. Mine are at 6.8%. My first job for a local accounting firm paid $39k. I was throwing extra at them until I lost that job. Since then they've been on income based. They aren't my priority right now. Even before I took my current job I had a temp office gig full time hours for $20k a year.

[Deleted]

To get a MLIS in 2008 at UA was $12,000, but I got $6000 worth of scholarships. The other $6000 I paid OOP.   It was over two years so only one semester was bad (9 hours that semester).

I think part of the equation has to be how long do you have to pay it back. I was in my 50s when I got the MLIS so I wasn't going to do it with loans.     That was the "need-based" argument that I made in my scholarship applications, and it apparently worked.

[jeep108]

My daughter's adviser thinks she's can get an Honor's scholarship.  She just has to get  her Public Speaking teacher to sign off on the paper. So all I will need to pay for is her books in August.  I'm pretty excited for her.

[mojothehelpermonkey]

I think it depends on the individual circumstances. I took out $10K in loans to attend a fancy private school when I could have gone to the state school in my hometown for free. I felt like some of my family judged me for that choice back then, but I doubt I would have gotten a full ride (tuition + stipend) to a decent grad school if I hadn't gone to a somewhat name brand school for undergrad.
This was all over 10 years ago, and I paid off my loans a couple of years ago. Jobs in my field are getting harder to come by these days, so I am not sure if I would recommend the same path to someone who is now just finishing high school.

[murphath]

Re Physical Therapy programs:  The move is toward PT's getting a doctorate--at least here in California.  It was typically  at least a master's degree program.

DD1 is a DPT. She works at a Skilled Nursing Facility 4 days wk/10 hrs day. To supplement her income and help pay back student loans, she works per diem at a local hospital 1 day per week/8 hrs. Twice a month, she works an additional day there. With both jobs, she made over $120,000 last year. That's in Nevada which is not known for high salaries. Her student debt totaled around $96,000; $39,000 was in private student loans. She had no debt for undergrad/master's program: we paid undergrad and she worked while getting the master's in athletic training.

She'll keep working the two jobs until the private loans are paid off. Once that's done, she'll cut back on her extra days at the hospital.  She anticipates having all the loans paid in about 3 years.  She's not being especially aggressive because she's 33 y.o. and wants to catch up on retirement savings, as well as do some travelling.  That was the deal with her husband:  move to Reno area (she prefers San Diego) but travel/visit friends whenever possible.

She also bought a house for $178,000 in Nov. 2013.  That's turned out to be a good move as it has now been appraised at $215,000.  Her PMI payment of $150 month will now go toward student loan debt.  She was thinking about buying a car but I talked her down from the ledge on that one.  She was afraid about commuting in the snow but so far the winters haven't been too severe.

[cktc]

I left college with $42k in debt, and made $24k my first year. Now I'm down to $29k and make $41k. It seems much more reasonable now (less than the average car!), and I hope to have it paid off in 4 1/2 years.

[lynnerself]

Jun 4, 2015 11:31:41 GMT -5 murphath said:

Re Physical Therapy programs:  The move is toward PT's getting a doctorate--at least here in California.  It was typically  at least a master's degree program.

DD1 is a DPT. She works at a Skilled Nursing Facility 4 days wk/10 hrs day. To supplement her income and help pay back student loans, she works per diem at a local hospital 1 day per week/8 hrs. Twice a month, she works an additional day there. With both jobs, she made over $120,000 last year. That's in Nevada which is not known for high salaries. Her student debt totaled around $96,000; $39,000 was in private student loans. She had no debt for undergrad/master's program: we paid undergrad and she worked while getting the master's in athletic training.

She'll keep working the two jobs until the private loans are paid off. Once that's done, she'll cut back on her extra days at the hospital.  She anticipates having all the loans paid in about 3 years.  She's not being especially aggressive because she's 33 y.o. and wants to catch up on retirement savings, as well as do some travelling.  That was the deal with her husband:  move to Reno area (she prefers San Diego) but travel/visit friends whenever possible.

She also bought a house for $178,000 in Nov. 2013.  That's turned out to be a good move as it has now been appraised at $215,000.  Her PMI payment of $150 month will now go toward student loan debt.  She was thinking about buying a car but I talked her down from the ledge on that one.  She was afraid about commuting in the snow but so far the winters haven't been too severe.

Yes, the $100 K school my daughter starts this fall is a 3 year program and results in a doctorate in Physical Therapy. Just glancing it looks like jobs start at about $70,000. She has borrowed the 1st years tuition from her grandparents, who will not charge her any interest. He finance is willing to completely support her living expenses for the next few years. (They are getting married next summer.)

Her main concern is that she is 28 and by the time she finishes school she wants to be considering having kids. But she'd like to work a lot 1st and pay off all the loans. That means waiting even longer for the kids.

[plugginaway22]

We always stayed with no more than expected first year salary for our kids.
It has worked out exactly that way for 2 DDs.

undergrad loan 40k -- first job 45k that went to 70k in 5 years
undergrad loan 30k -- first job 32k that went to 50k in 4 years
MBA loan -- 100k--  first job 125k

[Shooby]

My son is in technical school to become an electrician. We are paying part and he is going to have about $12K in student loans. That seems reasonable.

[zibazinski]

Yes, it's tough when you're responsible and make good choices. You get to pay the bills for those that do neither. The schools are getting ridiculous especially PT school. I owned a bunch of PT clinics in Florida when PT was still a 4 year degree and was only starting to become a "hot" field. That's sad about PTA salaries. That means in over 30 years, the salaries haven't increased at all but the years of schooling have. The last PTA I hired in 1997 made 40k plus bennies. PT's started at 55-60k but it was a 4 year degree then with one session, a short one, of mostly unpaid clinical. So the schools are hosing the students. Rumor has it that the PA program is going to become a doctorate one as well. As soon as a field is in demand, schools jump on the bandwagon and stick it to students. Totally unecessary for PT to be any longer than a 4 year degree. A fancy title does not translate to more dollars in your pocket but the schools.

[8 Bit WWBG]

The problem is that college has a "name recognition" factor, and having that name on your resume can open a lot of doors.  Well recognized colleges enjoy networked alumni, and have good relationships with specific career fields.  Naturally, those names can cost a lot of money.  Its certainly a tough call whether taking on $150k in SL debt for a top tier education can pay off over a career.

Recent economic factors have certainly called that idea into question.  If you decided, in 2006, to make this investment, during your time in school, things tanked.  So in 2010, you are working as a hostess or barista.  People looking at it now might very well choose differently.

I went to business school, so the earning potential is definitely there.  I entered when graduates were juggling 3 offers and holding out for signing bonuses.  I graduated into being lucky to get one offer.

[cael]

It's such a shame that the "name" thing matters so much... all my diplomas do/will say Univ. of Massachusetts on them and I'm perfectly fine with that. The friend I have who got the $60k masters went to a big name college for that because she was a snob about going to state college again... she's somewhat regretting that choice now. The name on that degree hasn't gotten her anywhere. (this is in education, I'm sure it's different in different fields)

[tskeeter]

Jun 2, 2015 21:09:17 GMT -5 cael said:

I had about $14k in student loans when I graduated (10y ago!!! ) it's going to be paid fully off this summer. I feel that was reasonable enough... DH has about $12k for his associate's degree. I don't think that's unreasonable, but for CC I wish it was less... my parents helped me finance my bachelor's degree so my $14k was just my portion, they probably had close to an equal amount in their names.

A good friend of mine got a $60k masters degree, got a job making $38k/year teaching that she recently lost and is probably looking at a daycare job for now that may make her like, $15/hour. I just could not even fathom a degree that expensive. I'm paying out of pocket for grad school now, but if I take out loans my goal is to have it be less than $10k.

Don't know that your friend's degree was that expensive.  It might have been the lifestyle she funded with student loans that was expensive. 

Could be like the article that I was reading earlier today about another teacher.  Ran up $43K in student loans.  Many years after graduation (like more than 20 years), and after years of payments, the loan balance is now $60K. Why after years of payments is the loan balance nearly 50% higher than the original loans?  Might have something to do the the 12 years of deferrals this woman obtained because she was a single parent.  So, if we look at the whole picture, she ran up over $40K of student loans in order to qualify for a job that, when she started, probably paid $12K a year.  Then she deferred the loan payments for more than a decade.  And apparently did not adjust her income or lifestyle to accomodate paying her debts.  Now she fusses because her $500 a month student loan payments are so high that her can't afford to buy the new car she needs and that the age of her loans prevents them from being forgiven under programs available for more recent loans.  So, how many poor financial decisions can you see here?  Do you think she made any other poor financial decisions in her life?  Since when does repeatedly making poor financial decisions make you a victim of student loan lenders and the university that provided your education?  And why does the fact that you made a bunch of bad decisions mean that your loans should be forgiven?    

[tskeeter]

Jun 4, 2015 11:31:41 GMT -5 murphath said:

Re Physical Therapy programs:  The move is toward PT's getting a doctorate--at least here in California.  It was typically  at least a master's degree program.

DD1 is a DPT. She works at a Skilled Nursing Facility 4 days wk/10 hrs day. To supplement her income and help pay back student loans, she works per diem at a local hospital 1 day per week/8 hrs. Twice a month, she works an additional day there. With both jobs, she made over $120,000 last year. That's in Nevada which is not known for high salaries. Her student debt totaled around $96,000; $39,000 was in private student loans. She had no debt for undergrad/master's program: we paid undergrad and she worked while getting the master's in athletic training.

She'll keep working the two jobs until the private loans are paid off. Once that's done, she'll cut back on her extra days at the hospital.  She anticipates having all the loans paid in about 3 years.  She's not being especially aggressive because she's 33 y.o. and wants to catch up on retirement savings, as well as do some travelling.  That was the deal with her husband:  move to Reno area (she prefers San Diego) but travel/visit friends whenever possible.

She also bought a house for $178,000 in Nov. 2013.  That's turned out to be a good move as it has now been appraised at $215,000.  Her PMI payment of $150 month will now go toward student loan debt.  She was thinking about buying a car but I talked her down from the ledge on that one.  She was afraid about commuting in the snow but so far the winters haven't been too severe.

murphath, good job talking your DD out of spending a lot of money on a "snow car".  I live in Reno, and don't think you need an expensive car with four wheel drive.  Our ski vehicle is a two wheel drive minivan.  Works just fine.  In the nearly 10 years we've lived here, I put chains on the van twice.  To go over passes in the mountains.  One of those times was crossing Donner.  Didn't need chains.  There was just a few inches of slushy snow on the road.  But CalTrans required chains to protect the CA wenies who don't know how to drive in poor weather from themselves.  And they make the rest of us play by the same rules.  The other time, compacted snow on the mountain road made chains a good idea.

We moved here from LA.  I had to shake my head in dismay as I watched many, many of our new neighbors, who were also moving from CA, buy all kinds of four wheel drive SUV's, have tires siped to improve traction, and the like.  I grew up in northern MN.  We drove rear wheel drive cars and pickups on snow covered roads from late October until early April.  Then I lived in Buffalo.  During one of those winters when snowfall was so heavy that they closed town down for a week to clear snow from the streets.  And found that my little front wheel drive car handled 18 inches of snow just fine.

We do have a four wheel drive Jeep, though.  It's for playing in the desert.  Not for driving in snow.       

[Deleted]

Jun 2, 2015 21:09:17 GMT -5 cael said:

A good friend of mine got a $60k masters degree, got a job making $38k/year teaching that she recently lost and is probably looking at a daycare job for now that may make her like, $15/hour. I just could not even fathom a degree that expensive. I'm paying out of pocket for grad school now, but if I take out loans my goal is to have it be less than $10k.

My DD's High School Teaching degree was 5.5 years of education (as mandated by the state for HS qualifications) plus we threw in an extra quarter for teaching experience in Mexico and getting ELL endorsement.

So, 6 years of school at state university, living on campus was $100K - $120K. She doesn't have that much in loans because I paid for most of her education, but it cost that much just the same.

I don't see how you can't fathom it being that expensive. Tuition/Fees/Books were about $60K of that total, the balance was living on/off campus costs.

$60K Masters Degree is not that expensive based on what I looked at; however getting that degree if it isn't going to increase your wage or employability does not make good sense.

[t-dog]

Jun 5, 2015 12:10:08 GMT -5 tskeeter said:

Jun 4, 2015 11:31:41 GMT -5 murphath said:

Re Physical Therapy programs:  The move is toward PT's getting a doctorate--at least here in California.  It was typically  at least a master's degree program.

DD1 is a DPT. She works at a Skilled Nursing Facility 4 days wk/10 hrs day. To supplement her income and help pay back student loans, she works per diem at a local hospital 1 day per week/8 hrs. Twice a month, she works an additional day there. With both jobs, she made over $120,000 last year. That's in Nevada which is not known for high salaries. Her student debt totaled around $96,000; $39,000 was in private student loans. She had no debt for undergrad/master's program: we paid undergrad and she worked while getting the master's in athletic training.

She'll keep working the two jobs until the private loans are paid off. Once that's done, she'll cut back on her extra days at the hospital.  She anticipates having all the loans paid in about 3 years.  She's not being especially aggressive because she's 33 y.o. and wants to catch up on retirement savings, as well as do some travelling.  That was the deal with her husband:  move to Reno area (she prefers San Diego) but travel/visit friends whenever possible.

She also bought a house for $178,000 in Nov. 2013.  That's turned out to be a good move as it has now been appraised at $215,000.  Her PMI payment of $150 month will now go toward student loan debt.  She was thinking about buying a car but I talked her down from the ledge on that one.  She was afraid about commuting in the snow but so far the winters haven't been too severe.

murphath, good job talking your DD out of spending a lot of money on a "snow car".  I live in Reno, and don't think you need an expensive car with four wheel drive.  Our ski vehicle is a two wheel drive minivan.  Works just fine.  In the nearly 10 years we've lived here, I put chains on the van twice.  To go over passes in the mountains.  One of those times was crossing Donner.  Didn't need chains.  There was just a few inches of slushy snow on the road.  But CalTrans required chains to protect the CA wenies who don't know how to drive in poor weather from themselves.  And they make the rest of us play by the same rules.  The other time, compacted snow on the mountain road made chains a good idea.

We moved here from LA.  I had to shake my head in dismay as I watched many, many of our new neighbors, who were also moving from CA, buy all kinds of four wheel drive SUV's, have tires siped to improve traction, and the like.  I grew up in northern MN.  We drove rear wheel drive cars and pickups on snow covered roads from late October until early April.  Then I lived in Buffalo.  During one of those winters when snowfall was so heavy that they closed town down for a week to clear snow from the streets.  And found that my little front wheel drive car handled 18 inches of snow just fine.

We do have a four wheel drive Jeep, though.  It's for playing in the desert.  Not for driving in snow.       

Hey now, why the hate for those of us on the other side of the hill - FYI I DO know how to drive in snow.

[cael]

Jun 5, 2015 11:50:51 GMT -5 tskeeter said:

Don't know that your friend's degree was that expensive.  It might have been the lifestyle she funded with student loans that was expensive. 

Could be like the article that I was reading earlier today about another teacher.  Ran up $43K in student loans.  Many years after graduation (like more than 20 years), and after years of payments, the loan balance is now $60K. Why after years of payments is the loan balance nearly 50% higher than the original loans?  Might have something to do the the 12 years of deferrals this woman obtained because she was a single parent.  So, if we look at the whole picture, she ran up over $40K of student loans in order to qualify for a job that, when she started, probably paid $12K a year.  Then she deferred the loan payments for more than a decade.  And apparently did not adjust her income or lifestyle to accomodate paying her debts.  Now she fusses because her $500 a month student loan payments are so high that her can't afford to buy the new car she needs and that the age of her loans prevents them from being forgiven under programs available for more recent loans.  So, how many poor financial decisions can you see here?  Do you think she made any other poor financial decisions in her life?  Since when does repeatedly making poor financial decisions make you a victim of student loan lenders and the university that provided your education?  And why does the fact that you made a bunch of bad decisions mean that your loans should be forgiven?    

Yeah, Lesley University is very expensive, so I believe that's what my friend's degree cost her. They probably did not use her loans for any other purpose, she worked through it until she student taught at the end.

But I know that article you describe is the experience many people have that leads them to have crippling student debt.

[cael]

My master's degree is probably going to cost me maybe $16k? So including books and fees it'll be under $20k. I'm also not living on campus. Maybe $50-60k is the norm, I just personally can't fathom paying that much for a degree, at least not with my career/desired career and mindset.

[tskeeter]

Jun 5, 2015 14:39:02 GMT -5 t-dog said:

Jun 5, 2015 12:10:08 GMT -5 tskeeter said:

murphath, good job talking your DD out of spending a lot of money on a "snow car".  I live in Reno, and don't think you need an expensive car with four wheel drive.  Our ski vehicle is a two wheel drive minivan.  Works just fine.  In the nearly 10 years we've lived here, I put chains on the van twice.  To go over passes in the mountains.  One of those times was crossing Donner.  Didn't need chains.  There was just a few inches of slushy snow on the road.  But CalTrans required chains to protect the CA wenies who don't know how to drive in poor weather from themselves.  And they make the rest of us play by the same rules.  The other time, compacted snow on the mountain road made chains a good idea.

We moved here from LA.  I had to shake my head in dismay as I watched many, many of our new neighbors, who were also moving from CA, buy all kinds of four wheel drive SUV's, have tires siped to improve traction, and the like.  I grew up in northern MN.  We drove rear wheel drive cars and pickups on snow covered roads from late October until early April.  Then I lived in Buffalo.  During one of those winters when snowfall was so heavy that they closed town down for a week to clear snow from the streets.  And found that my little front wheel drive car handled 18 inches of snow just fine.

We do have a four wheel drive Jeep, though.  It's for playing in the desert.  Not for driving in snow.       

Hey now, why the hate for those of us on the other side of the hill - FYI I DO know how to drive in snow.

Based on my personal oberservations, that would make you a rarity in CA  I stand by my position that most CA drivers are weenies when it comes to snow or heavy rain.