Estimating Loan Amount Needed

[SammieSam]

Hello,

I am going to be paying for graduate school myself and have not dealt with student loans until now.

How much do grad students (single, no kids) usually take out in loans after covering tuition and fees? I have a good amount saved up and think that I can use the "extra" loan money to cover rent and health insurance, while using my savings for everything else (food, travel, personal). Is this what other people in my situation do?

Thanks!

[naveenK]

80% of the tuition fee you can avail as loan from the banks

[Timothy Vallier]

I'm in a similar situation. Any advice would be appreciated.

[FountGrad]

Yes, can someone please help us out here with any advice? I just received my letter of financial aid award today and I have no clue how to estimate the loan amount needed as well. I was awarded a scholarship by the school covering most of my tuition except $5000 per year. I figure on top of that I'll need a thousand or more just to cover books, supplies, health care and insurance costs. I don't think I'll need to worry about rent and food since my unemployment, which I'm still eligible to collect while enrolled in school, would cover those expenses. I'm not sure if I should accept the full amount and return whatever aid I do not use later OR reduce the loan amount on the letter now. I just don't want to have to worry about being short of funds at all. Thanks.

[juilletmercredi]

The best way to do this is to talk to a lot of people and estimate your living expenses.

Check out the cost of living in your area. What does rent cost? How about average utilities? How much do standard groceries (milk, eggs, cereal, bread, etc.) cost? What does it cost to go to the movies? How much is gas, if you're driving? Ask the departmental coordinator if she can put you in touch with some current graduate students at your university who might be willing to talk to you about money matters, and ask them how much they spend in an average month and how much they think they can get by on. In my experience most graduate students are pretty open about money because none of us have a lot of it and we're all making similar stipends anyway, so there's no need to be secretive.

For example, I live in New York City. My current stipend is $2280 a month after taxes, and I think that works out very well - it covers all the necessities and I have some left over for extras (saving 10% traveling to see family or my boyfriend, the occasional vacation, eating out sometimes, etc.) I think that with the cost of living in this area, I could live on less - maybe down to like -$1900 a month, although it'd be a struggle. I wouldn't be able to save much if anything, and I'd have to cut out many of the extras, but it's survivable especially if it's only for two years (I'm in a doctoral program so I'd go nuts, but...). Indeed, last summer I did make around that much; our tax situation changed over the summer (GRAship ended, paid on casual pay) and after taxes I was making about $400 less per month than I made during the school year, so I stop socking the savings away, cut out a lot of the eating out, and I didn't buy a metrocard every month - but then, I didn't need to, since I live walking distance from one of my departments and didn't have to go to the other one as much. And if you lived out in Brooklyn you might find rent cheaper than mine ($900/month for sharing a two bedroom). $1900 a month here is a little less than $23,000, so I'd say the average person could get away with taking out around that amount for living expenses and be fine.

And if you can get away with $23,000 in New York City, you can get away with less somewhere else. If I lived in Atlanta, for example, on my $27,000 after-tax stipend - I'd be living in comfort! I'd have air conditioning! I'd have cable! I'd have my own place! LOL.

Edited June 1, 2010 by juilletmercredi