How much debt is too much debt?

[Thorongil]

I wasn't sure where to post this, so mods can feel free to move it. I have about 30k in undergrad student loan debt, and I might have to take out an additional 5-10k (depending on if I get bumped up in my teaching appointment and some other factors) to complete my MA. Would it be worth it to carry on another year to finish the MA degree? Or should I drop out and start repaying the loans I already have? Or should I considering transferring? I'm in the humanities, by the way. 

Your thoughts would be much appreciated. 

[EdNeuroGrl]

Uck... I try not to think about my loans... What you have is not much compared to what I have. I also was not fortunate enough to be able to work while attending. Having a  learning disability means that I've got to put all I have into this stuff, and when I've been able to take on TA positions as a grad student I was informed that positions don't go to Master's students... so *shrug* In part, it is a personal decision. As far as the information I know about your average student loan amount, you're on the low side of average for someone coming out of a BA/BS.

[Thorongil]

The average undergrad student loan debt, as Google tells me, is 29,000. So I'm right smack in the average. But by finishing the MA, it could be closer to 40k. I want to know if that's a bridge too far, since I don't want to spend decades paying it off. Perhaps it is just my own personal roll of the dice....

[EdNeuroGrl]

Yeah, very personal decision.

I go in because I've tried other options and I know where I want to be. For me it is worth it to do what I love. And for me also, more down time is going to be detrimental to my over all career. For you, perhaps not.

[Thorongil]

By downtime, what do you mean? Time spent in between degrees? 

[EdNeuroGrl]

Yeah, essentially. If I do everything with no more delays I am looking at getting my PhD when I am between 35 and 37, then doing a post doc for a couple years... essentially starting a career at 40 and having 20 to 30 years of work before retiring/getting too sick to work... with the very strong assumption that my current health problems don't take me out a lot sooner... So, after my BA I clearly didn't get right into grad school, I got into a Post-Bac program that supported a year of research. At that point I still didn't get in and my contract was up with no option for renewal. I had less than a month to get a paying job before I was homeless. I got a job that was in a med laboratory and it got the bills paid. I worked there a couple years while being promised opportunities to advance, but not being actually given any... Eventually I decided to accept going further into debt because I needed to advance my career and clearly I wasn't competitive. Only after my second semester did I discover opportunities to work as an RA or a data analyst that would also advance my career. It would have been great to know about earlier, but I didn't... I spent 2 years paying down my debt and didn't really make an impact... I had 40k and in the two years (making 21K a year) I didn't see any difference.

Anyway, long story... right now, taking time off to pay down debt is not a good option. Between the spending valuable time and the small impact on total debt, it isn't worth it to me. 

[StyLeD]

I have 33k in student loan debt, so I'm also worried about the cost of a Master's degree. Unfortunately, for my field an MA is the minimum requirement for many mid to upper-tier jobs. There's no point in me taking a year or two to save up money because very little will be saved. My advice for you would be to explore some of the careers in your field and see whether or not they take BA candidates and pay them well. If they do and the salary is enough to pay off student debt in addition to housing & food, I would seriously consider it.

Alternatively, see if you can obtain a fellowship which will help pay for the 5-10k. From my perspective, 5-10k is significant but not crippling. I wouldn't drop out of an MA program for that amount of money. 

Edit: Seems like the $29,000 debt figure was for 2012. For students graduating this year, the figure is $35,000. 

http://blogs.wsj.com/economics/2015/05/08/congratulations-class-of-2015-youre-the-most-indebted-ever-for-now/

Edited November 14, 2015 by StyLeD

[Thorongil]

1 hour ago, EdNeuroGrl said:

Anyway, long story... right now, taking time off to pay down debt is not a good option. Between the spending valuable time and the small impact on total debt, it isn't worth it to me. 

Interesting. Thanks for sharing. My hope is that whenever I do start working in earnest, I can shovel as much disposable income at paying off my loans as I can. I want to have them paid off in under 10 years. 

Edited November 14, 2015 by Thorongil

[Thorongil]

1 hour ago, StyLeD said:

My advice for you would be to explore some of the careers in your field and see whether or not they take BA candidates and pay them well.

Sadly, there really isn't anything for humanities majors. I was aware of this going in and have wanted to become a professor basically all my life. I just don't know if the debt I am accumulating is so high that I'm better off abandoning the professorship track to start working somewhere (who knows where) to pay it off. 

Those new figures are startling. It seems, then, that even if I add 5-10k I will still be squarely in the average. In a way, that's both reassuring and not at the same time.  

[spunky]

13 minutes ago, Thorongil said:

Sadly, there really isn't anything for humanities majors. I was aware of this going in and have wanted to become a professor basically all my life. I just don't know if the debt I am accumulating is so high that I'm better off abandoning the professorship track to start working somewhere (who knows where) to pay it off. 

Those new figures are startling. It seems, then, that even if I add 5-10k I will still be squarely in the average. In a way, that's both reassuring and not at the same time.  

 

when it comes to taking on debt i feel you have to think about it from an investor/business person perspective... as in "once i go out, will be making enough $$$ to pay this within a reasonable amount of time?" where "enough $$$" and "reasonable amount of time" are entirely dependent on the person's situation. 

i feel like sometimes people just have to be honest with themselves and see whether or not their academic life goals are financially feasible at this point in life. for instance, i knew that going into an MA for me was going to be financial suicide unless i paid off some debt i had so i took on a job (which i didn't like very much at first but oh well) and paid the thing off before moving on.

i feel like only you can answer that question after you've done some homework in terms of starting salaries, job opportunities close to you, etc... and be flexible. sometimes you're just gonna have to bite the bullet and take on jobs you're not interested in/way below your ability to make ends meet. it always comes down to whether or not you can balance what you want to do in life with what society in general is willing to pay for. 

[rising_star]

37 minutes ago, Thorongil said:

Sadly, there really isn't anything for humanities majors. I was aware of this going in and have wanted to become a professor basically all my life. I just don't know if the debt I am accumulating is so high that I'm better off abandoning the professorship track to start working somewhere (who knows where) to pay it off.  

If your goal is to become a professor in a humanities field, then you may struggle to pay off your student loans after completing a PhD. I say this because it is increasingly difficult to find a full-time teaching position in most fields, including the humanities. Many people find themselves working as an adjunct (paid by the class, no benefits) for a year or more before landing a full-time position. But you really need a full-time position (not necessarily tenure-track but something with a multi-year contract) in order to have the financial means to make a dent in your student loans. The only upside might be the government's student loan forgiveness program for those working in public service for 10 years. 

[Thorongil]

1 hour ago, rising_star said:

But you really need a full-time position (not necessarily tenure-track but something with a multi-year contract) in order to have the financial means to make a dent in your student loans.

That's probably true, but on the other hand, I'm a single guy who plans to remain so and don't really have any other expenses to speak of. I don't need much. How much does an adjunct get paid per year?

[PoliticalOrder]

IMO, any debt is too much debt. 

[CBclone]

I had around 33k undergrad debt, and being out of state for grad school have added the 20.5k fed loan right off the bat for this first year. My GA position pays for 6 IS credits/semester + the OOS vs IS difference for those, but other credits are paid at full OOS cost. This fall I took 8 credits and will take 12 in the spring, so paying full freight for 2 and 6, respectively. I considered taking a year off after spring 2016 to apply for in-state eligibility, but next fall & spring (16-17) I'm only taking 6 & 7, respectively, so really I'll only be paying OOS for the 1-credit spring '17, which is my last semester. And my department chair reached out to me the other day about a GA position for next year, that definitely would not be guaranteed if I took the year off. I'm trying to find 1-2 good jobs for next summer to make a lot of money and take as small of a loan next year as I can manage. 

School loans will be my only debt when I graduate, which I can deal with when I know tons of people over their heads in high interest credit card debt. 

[rising_star]

2 hours ago, Thorongil said:

That's probably true, but on the other hand, I'm a single guy who plans to remain so and don't really have any other expenses to speak of. I don't need much. How much does an adjunct get paid per year?

The Adjunct Project over at The Chronicle will give you some idea. Pay range is $1800-6000 per course, highly dependent on location and institution. At most institutions, you can't teach more than 3 courses a semester because then they would have to offer you benefits. Consequently, there are a number of stories about adjuncts on food stamps. 

Sure, as a single person, you may not have many expenses now. But, can you be sure that you'll never need decent health care or that you won't get sick? Are you okay living with multiple roommates forever to save money? These are things you should consider now, before you take on the debt.

[Thorongil]

2 hours ago, PoliticalOrder said:

IMO, any debt is too much debt. 

True enough! But what's done is done. What do you think I should do in my present situation? 

[Thorongil]

1 hour ago, CBclone said:

I had around 33k undergrad debt, and being out of state for grad school have added the 20.5k fed loan right off the bat for this first year. My GA position pays for 6 IS credits/semester + the OOS vs IS difference for those, but other credits are paid at full OOS cost. This fall I took 8 credits and will take 12 in the spring, so paying full freight for 2 and 6, respectively. I considered taking a year off after spring 2016 to apply for in-state eligibility, but next fall & spring (16-17) I'm only taking 6 & 7, respectively, so really I'll only be paying OOS for the 1-credit spring '17, which is my last semester. And my department chair reached out to me the other day about a GA position for next year, that definitely would not be guaranteed if I took the year off. I'm trying to find 1-2 good jobs for next summer to make a lot of money and take as small of a loan next year as I can manage. 

School loans will be my only debt when I graduate, which I can deal with when I know tons of people over their heads in high interest credit card debt. 

This sounds eerily similar to my circumstances. But do you mean to say you've had to add an additional 20k to your 33k of undergrad debt? That's a lot, certainly more than what I'm worried about, and yet it seems you're intent on finishing the MA. What are your reasons for being okay with this, besides the possible advantage that student loan debt has over credit card debt? I would be very curious to know. 

[Thorongil]

30 minutes ago, rising_star said:

The Adjunct Project over at The Chronicle will give you some idea. Pay range is $1800-6000 per course, highly dependent on location and institution. At most institutions, you can't teach more than 3 courses a semester because then they would have to offer you benefits. Consequently, there are a number of stories about adjuncts on food stamps. 

Sure, as a single person, you may not have many expenses now. But, can you be sure that you'll never need decent health care or that you won't get sick? Are you okay living with multiple roommates forever to save money? These are things you should consider now, before you take on the debt.

You're quite right. Going by the 1800 estimate, that works out to some serious poverty wages. However, my plan is to at least get into a fully funded PhD program. If I can't find decent employment as a professor after that, then so be it. I will find something else to do. But I'm wondering whether, for right now, it would be wise to finish the MA, added debt and all. If not, then I would probably have to start all over again in a new MA program or simply shut off the academia career path entirely. As I said, I would prefer to at least take a shot at a PhD before I close said path, but if the debt I will have accumulated makes it not worth it, then I will close it now. 

[Horb]

10 hours ago, Thorongil said:

You're quite right. Going by the 1800 estimate, that works out to some serious poverty wages. However, my plan is to at least get into a fully funded PhD program. If I can't find decent employment as a professor after that, then so be it. I will find something else to do. But I'm wondering whether, for right now, it would be wise to finish the MA, added debt and all. If not, then I would probably have to start all over again in a new MA program or simply shut off the academia career path entirely. As I said, I would prefer to at least take a shot at a PhD before I close said path, but if the debt I will have accumulated makes it not worth it, then I will close it now. 

My recommendation would be, if you definitely want to do a PhD, to just apply for MA/PhD combo programs, which will offer full funding if it is a good program. Doing an MA will be useful if you want to teach in a private high school (most public schools require an MA in Education and/or a certification for teaching) and if you want to go into publishing (places will hire people with degrees in History, English, etc. to proof textbooks). 

However, I want to add that unless you get into a top 10 program, the likelihood of you getting a professorship and not having to adjunct the rest of your life is extremely low. I think of last year's new hires, over 80% came from the same 10 schools (think Harvard, Berkeley, Princeton, Cornell). So, while adjuncting might be ok for a few years, it will likely not be a sustainable profession for the rest of your life. The further out of your PhD program you are, the less likely you are to get a job. Just look at the Chronicle for more facts and information. 

[CBclone]

11 hours ago, Thorongil said:

This sounds eerily similar to my circumstances. But do you mean to say you've had to add an additional 20k to your 33k of undergrad debt? That's a lot, certainly more than what I'm worried about, and yet it seems you're intent on finishing the MA. What are your reasons for being okay with this, besides the possible advantage that student loan debt has over credit card debt? I would be very curious to know. 

Yes, it's crazy to say that I've added to my undergrad debt by 60% in just one year. I had other help paying for undergrad, I don't for grad. I've been pretty stingy with my funds and combined with work next summer, am projecting a lot of what I currently have in the bank to be applied to next year, greatly reducing my need for another big loan.

In my field, an ever increasing number of employers and sectors are requiring (or greatly preferring) certification for full time, salaried positions (there's a fair amount of full/part-time seasonal/non-salaried work as well), and many states are even making a push for licensure to practice. There are 3 pathways to certification (academic, and two 'working') that all require the exact same core coursework, with differences being in the number of humanities/social sciences, type of undergrad degree, work experience, etc. It's complicated. If I'd received my undergrad degree in this field, I would have sat for certification upon graduating and we wouldn't be having this conversation, but alas, I didn't even know this field existed until spring of my (1st) senior year. 

My M.S. program only adds about 1 semester to what is required by the core coursework standards (luckily my B.S. was in a related field, so I had all but one human/social pre-reqs done), so I think it's worth it to get the depth & breadth of knowledge and expand my network (there is an online certificate program available also -- I don't do online learning well, and it seemed isolating). It also opens up the door for future PhD study if I want to go down that road; until now, I've considered this my "terminal" degree and was going to take comp exams and not do a thesis, but I've been kicking around the idea of possibly changing that (I've never done formal research and it's an intimidating prospect, but I also have some research topics of interest and curiosity). My advisor told our class that this year there are only two PhD graduates in our field and lots of open, full-time teaching positions as the field is growing. Those students have the pick of where they want and a good amount of bargaining power. I haven't researched into it much at all, but it's an option and one that I would most likely only take if fully funded.

It would be great if I had in-state residency, as it's significantly cheaper, but I don't and like I said, next year it's not a relevant point as I'll only be paying for 1-credit over the entire academic year on top of the 12 my GA position will pay cover. And I'll take 6.8% student loans (w/ a variety of payment plans) over 18%+ CC debt w/ strict repayment options. 

[dr. t]

23 hours ago, Thorongil said:

I wasn't sure where to post this, so mods can feel free to move it. I have about 30k in undergrad student loan debt, and I might have to take out an additional 5-10k (depending on if I get bumped up in my teaching appointment and some other factors) to complete my MA. Would it be worth it to carry on another year to finish the MA degree? Or should I drop out and start repaying the loans I already have? Or should I considering transferring? I'm in the humanities, by the way. 

Your thoughts would be much appreciated. 

Your final situation would be roughly about what mine is now, i.e. about $40k after your MA. I'm OK with it because I have a wife who has a real job, and my loans stay in remission (subsidized) while I'm in my PhD, so we can tackle them one at a time. 

I don't think having $40k in debt will give you problems that are substantially different from having $30k in debt.

[random_grad]

On 11/15/2015, 1:03:04, telkanuru said:

I don't think having $40k in debt will give you problems that are substantially different from having $30k in deb

I'd agree on this.

On 11/14/2015, 1:52:42, Thorongil said:

I have about 30k in undergrad student loan debt, and I might have to take out an additional 5-10k

This was exactly my situation: after the undergrad I had roughly 30k in debt and had to take another ~8k to do the master's, which was otherwise funded by a grant. I consider it totally worth it. in retrospect, I should have taken less money in debt and lived a more austere life. but we're all wise in retrospect.

The master's gave me a competitive edge and improved me as a scholar. I would do it again if, for example, I'm close to finishing my phd and need a little money. Hopefully it won't happen. This may sound irresponsible to some, but I frankly don't care about money. My dependents and I don't exactly bathe in money right now with me as grad student being the sole bread winner, so if later on I have an income plus debt I think we will manage just by habit of being poor. I kinda love my monastic life. Many of my friends went on to law school, which for a moment made me jealous, but then I remembered that 1. I would not have had the money to finance it anyway, 2. grad school is awesome. I love my 16h work days right now.

Even if you think the academic career may not be for you in the end, imo you should at least finish the MA because it's a great achievement. yolo! xD

[Thorongil]

4 hours ago, random_grad said:

I love my 16h work days right now.

Are you sure you're not pulling my leg?

 

4 hours ago, random_grad said:

Even if you think the academic career may not be for you in the end, imo you should at least finish the MA because it's a great achievement. yolo! xD

That seems to be the consensus so far in this thread, from what I can tell. What is your discipline, if you don't mind me asking? And are you in a PhD program now?

[random_grad]

I was also quite surprised to count 16h a day but it is true. Less than 8h of sleep, then maybe 1h of relaxation at the end of the day... I do include brief moments of distraction in the 16h, such as writing on grad cafe or eating something, because I think these are breaks which are otherwise paid for if you work in an office, so ought to be included. I don't know how long I will be able to sustain that pace, but it's been like this since september, 6day/week. Before that, during my MA, I was doing a lot less. 10h/day was an accomplishment back then.
I am currently in a PhD program at a top school in my subfield. My field is art history.

[brown_eyed_girl]

I agree with random_grad and telkanuru. I don't think you'll be much worse off by adding to your loans a bit, and I think it would be worth it to finish what you've started. Also, consider the fact that you've already invested time in school, and money in the sense of opportunity cost. Besides which, if you drop out now and ever decide to finish the MA in the future or apply to PhD programs, dropping out halfway through a prgoram could hurt your chances; and if you drop out now and start going on interviews, you'll have to explain the situation to employers or risk having a big gap in employment record. I think it's worth it to stay in the prgoram and finish strong. Plus, even in the humanities where job prospects aren't ideal, having an MA should give you an edge and open up doors.