140k in loans @ 8%...worth it?

[cjackson]

Got accepted to SAIS, SIPA, GW, SIS, and UCSD. Deciding between SAIS and SIPA. I wanted to work for the government or a nonprofit, but that's no longer an option considering the amount of debt I'm going to be taking on. I feel as though I'll be forced into finance/consulting just to pay off the debt, which I believe would be better served by an MBA vs. MA. I need a MA to get into the field I like, but I feel as though the debt will force me into a more lucrative less enjoyable field...is it worth it?

I checked into loan forgiveness and it's a joke...no forgivness until you have made 120 payments (10 years). http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp

[FingersCrossedX]

Got accepted to SAIS, SIPA, GW, SIS, and UCSD. Deciding between SAIS and SIPA. I wanted to work for the government or a nonprofit, but that's no longer an option considering the amount of debt I'm going to be taking on. I feel as though I'll be forced into finance/consulting just to pay off the debt, which I believe would be better served by an MBA vs. MA. I need a MA to get into the field I like, but I feel as though the debt will force me into a more lucrative less enjoyable field...is it worth it?

I checked into loan forgiveness and it's a joke...no forgivness until you have made 120 payments (10 years). http://studentaid.ed...english/PSF.jsp

Is it worth it? I think only you can really decide that. For me personally, no. That's too much debt. That's a house, a very nice house in some places. Is there any other option financially? Is there a less expensive option that will give you less debt and allow you to work in your preferred area? I understand that you want to get the best education possible and you have some great programs to choose from, but I just feel like it's not that great a program if it will force you into a career that you won't like.

[flyers29]

No way. And imho it's not a great idea to bet the house on that "government pays off your loans after 10 years" program.

[Bespin]

$140k would definitely be a lot of borrowed money... but don't be too quick to dismiss the Public Service Loan Forgiveness program! When you combine that with an Income Based Repayment plan, you would stand to have an incredibly generous portion of that $140k/accumulated interest forgiven after 10 years of very reasonable monthly payments (something around $450-500/month, assuming a $50k salary & single-person household).

[palabared]

did you receive funding from any of the other schools you got into?

[Damis]

I'm sorry, but no way in Hell is that worth it. Either wait another year (while retaking the GRE/reengaging yourself in extracurricular to strengthen your application/taking additional coursework to improve your application) or work for a year. If you're really set on going to school this year...you may have to include those other schools in the equation.

Even if you were able to finish with the debt and "have to go into finance/consulting" those jobs don't necessarily grow on trees neither.

Best of luck with your decision.

[nogone]

That's a house with a crappy interest rate!

[newba1ance]

No. Not even close my friend. You are going to be making 40k – 50k a year and paying off 120 – 140k in loans? So about 1300 a month give or take (assuming about 5%) …This is ridiculous, it’s an amount that may be justified if you are looking at a top rated MBA or JD degree that is going to earn you 150k out of the gate, but an IR degree to work for a non-profit? If you want to work for the government or non-profit that amount of debt is silly, and you by no means need to go to SAIS or SIPA to get work at a top notch non-profit or government agency. I’m continually shocked that people actually go into debt to pay sticker price at those schools.

Don’t mean to be harsh, but please be careful when taking out that kind of debt, it can’t be defaulted upon and I know a few people who are really hurting with debt a few years out of their MA degree w/o any discernable advantage to show for it.

[greendiplomat]

Got accepted to SAIS, SIPA, GW, SIS, and UCSD. Deciding between SAIS and SIPA. I wanted to work for the government or a nonprofit, but that's no longer an option considering the amount of debt I'm going to be taking on. I feel as though I'll be forced into finance/consulting just to pay off the debt, which I believe would be better served by an MBA vs. MA. I need a MA to get into the field I like, but I feel as though the debt will force me into a more lucrative less enjoyable field...is it worth it?

I checked into loan forgiveness and it's a joke...no forgivness until you have made 120 payments (10 years). http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp

While I think it's important to continually apply for external funding leading up to and during the program wherever you end up, so you might not be facing that much debt.

That said, if you have zero funding at this current point, you'll still be facing a substantial debt burden. I think it might be worth either coming up with a compelling reason to defer or to reapply altogether, and then to use that extra year not only to gain experience to increase your likelihood of getting funding from your schools, but also to start looking at external funding opportunities early in the process (at least a few months before the application deadlines).

As for your MBA vs. MA dilemma, don't go get an MBA just because it'll help you in paying off your loans. Remember that grad school is an investment to get you further in the career of your choice, not to get you further in your loan repayments. I do think that it is possible to graduate from these programs with debt and have a satisfying career, but at the end of the day, it's your decision whether you think it's worth the extra effort it will take to make your repayments.

[undecided11]

I just emailed a professor I know at SIPA, asking her opinion on SIPA and SAIS vs my less expensive option: GSPP. She said that she "vehemently" objects to the loan burden that Columbia imposes on students, as they'll be paying it off for decades and told me to not think twice about choosing GSPP over SIPA.

It really hurt to give up SIPA and SAIS - they were my top choices since before I even applied to grad school but there is no way I'm risking that much debt when there's a cheaper option (GSPP average debt is 25k, vs 80k at SAIS, and most likely 90k for non-funded SIPA students). I know that many SIPA students get funding their second year but a 20k fellowship barely puts a dent in 140k of debt plus you need to work for that fellowship which means you can't be working/interning off campus to make additional money.

Obviously, you are already competitive since you got into these programs. I agree with GreenDiplomat - if you don't need to go to grad school this year my advice is do everything you can to make your application more competitive and try again next year.

[cckrspnl56]

I'm doing it <shrug>. With the income based repayment plan + public service loan forgiveness, it won't be that bad.

[nogone]

I'm doing it <shrug>. With the income based repayment plan + public service loan forgiveness, it won't be that bad.

Seriously? Have you met anyone that supports this?

I know people with that kind of loan burden. It sucks. Really really really sucks.

[hattaba]

I'm with you ! I'm biting the bullet as well. income based repayment sounds fairly doable.

I'm doing it <shrug>. With the income based repayment plan + public service loan forgiveness, it won't be that bad.

[adollarninetynine]

it hurts to see ppl take this amount of debt and shrugging. sometimes i wonder if ppl actually research income based repayment plans and other forgiveness plans.

[Mal83]

it hurts to see ppl take this amount of debt and shrugging. sometimes i wonder if ppl actually research income based repayment plans and other forgiveness plans.

Many of us just don't have any other options, it's easy to say the debt isn't worth it when you've been offered all kinds of funding. I won't have 140K in loans, but my debt will be substantial, at this point it's what I have to do in order to move on to the next stage of my life. I'm not going to wait another year in hopes of getting funding, my undergrad GPA will not get me funding. I either go with loans in order to go to school or I stagnate in a situation that I've been struggling to get out of. I'm happily going with the loans.

[palabared]

I understand where you're coming from, I'll be taking on debt too, but prob a little less than half of 140k though. I knew I wouldn't get funding due to a shitty GPA, so I applied to schools that wouldn't break the bank. Probably due to the fact that I freaked out about paying hundreds in thousands of $ over some of the best (most able) years of my life. I guess it depends on how important certain schools are to you over others and if you think your career will be that much better off (career placement/advancement) after obtaining your degree from a more expensive school. But to each his own, perhaps I'm a worry wort.

Many of us just don't have any other options, it's easy to say the debt isn't worth it when you've been offered all kinds of funding. I won't have 140K in loans, but my debt will be substantial, at this point it's what I have to do in order to move on to the next stage of my life. I'm not going to wait another year in hopes of getting funding, my undergrad GPA will not get me funding. I either go with loans in order to go to school or I stagnate in a situation that I've been struggling to get out of. I'm happily going with the loans.

Edited April 28, 2011 by palabared

[ep1181]

Yeah really. Despite what you may think after reading these forums not everyone has a 4.0 gpa and a perfect GRE score. We either take out the loans or don't go to grad school. That's why I'm also going to a school that's much cheaper and where cost of living is also cheap.

[palabared]

Well like others said, you cost postpone school for a year and reapply next year. You have probably done most of the work in terms of SOPs and all, just spiff em up a bit with a year of experience more, and you would have to bug your LORs (which was a huge pain for me getting those from abroad). I mean there's so many good schools out there, you could apply to some other ones that are cheaper where you might also get some funding. I think experience prior to school is as or more important than where you get the degree from the top 10 or 15 schools. It makes one that much more competitive after!

Agreed, it's either crazy debt or no school at all, and my alternatives are not too promising. There's no in between for me. Everyone talks about how great of a job you'll get upon graduation, but look at the employment outcomes. In 2010 private sector grads were only making 60k per year. If you're living in DC or NYC with six figure loan debt, that's a mere pittance.

http://www.sais-jhu...._EmpOutlk10.pdf

http://www.sipa.colu...tistics_001.pdf

Also, I just learned that if you defer for a year that penalize you by making you ineligible for second year scholarships. Cheers.

[MPPplusDebt]

::stands on soapbox:: I would think very carefully about what $1200/month loan payments will mean in terms of your future, whether it involves having a family, wanting to travel or the types of jobs you will be able to take. Massive loan debt could very well impact all of these things. I have more than a few friends in this situation now and in this economy especially, it is not pretty.

I agree that a masters is very helpful for some people at some points - but the loan debt can be a huge burden, especially in this field. Personally I think taking out this much in loans is a very risky decision and that a masters from a state school (or in Europe) at 1/10-1/2 of the cost can be a much more worthwhile option. I would also consider whether it might be wiser to take another year and spend literally 6-9 months studying for the GRE at nights and on weekends, or spend a year working in the field, to improve scholarship chances.

It doesn't simply have to be 140k or no grad school at all, there are many options in between and many programs that do not require such a large debt burden. There is also the option of working and saving money for a couple of years. If you are wealthy and/or have family that can support you should things get sticky, then that's a different situation.

Personally I've decided I will not spend that much, I'm looking to take on $60k max.

Edited April 28, 2011 by MPPplusDebt

[flyers29]

Yeah really. Despite what you may think after reading these forums not everyone has a 4.0 gpa and a perfect GRE score. We either take out the loans or don't go to grad school. That's why I'm also going to a school that's much cheaper and where cost of living is also cheap.

No one said that taking out loans in some form isn't worth it, but to the tune of 140k--especially given the salaries that one can expect out in this field--is ludicrous.

[flyers29]

::stands on soapbox:: I would think very carefully about what $1200/month loan payments will mean in terms of your future, whether it involves having a family, wanting to travel or the types of jobs you will be able to take. Massive loan debt could very well impact all of these things. I have more than a few friends in this situation now and in this economy especially, it is not pretty.

I agree that a masters is very helpful for some people at some points - but the loan debt can be a huge burden, especially in this field. Personally I think taking out this much in loans is a very risky decision and that a masters from a state school (or in Europe) at 1/10-1/2 of the cost can be a much more worthwhile option. I would also consider whether it might be wiser to take another year and spend literally 6-9 months studying for the GRE at nights and on weekends, or spend a year working in the field, to improve scholarship chances.

It doesn't simply have to be 140k or no grad school at all, there are many options in between and many programs that do not require such a large debt burden. If you are wealthy and/or have family that can support you should things get sticky, then that's a different situation.

Personally I've decided I will not spend that much, I'm looking to take on $60k max.

Well said. Just as a benchmark, I finished my MA with 60k in debt. A conservative projection has me looking at about 7-10 years to pay that off (meaning my early 30s or so). I think it would be worth it for many of you to use an amortization calculator (here's one: http://www.bretwhissel.net/amortization/amortize.html) to figure out what you'll be looking at in terms of pay-off.

Edited April 28, 2011 by flyers29

[palabared]

Just playing around on that amortization calendar is scary! At an average of 7% for 140k paid over 10 years would cost almost 200k with payments at $1,700/mo. at 20 years repayment total cost is 260k and monthly pymnts of $1,100.

Well said. Just as a benchmark, I finished my MA with 60k in debt. A conservative projection has me looking at about 7-10 years to pay that off (meaning my early 30s or so). I think it would be worth it for many of you to use an amortization calculator (here's one: http://www.bretwhiss...n/amortize.html) to figure out what you'll be looking at in terms of pay-off.

[jph5125]

Hopefully the OP would qualify for a public service job and IBR the debt to 8.5% of his income per year for 10 years. Therefore, assuming the OP made 60k a year with no salary increases for 10 years, the total paid back would be 51k and the rest + interest wiped out.

Of course with a government hiring freeze and increase grad enrollment I would not be willing to chance 140k in loans for an MA solely based off of public loan forgiveness.

Just playing around on that amortization calendar is scary! At an average of 7% for 140k paid over 10 years would cost almost 200k with payments at $1,700/mo. at 20 years repayment total cost is 260k and monthly pymnts of $1,100.

[cckrspnl56]

Seriously? Have you met anyone that supports this?

I know people with that kind of loan burden. It sucks. Really really really sucks.

At a salary of 50k it's about 450 a month. For 10 years. Maybe I'm missing something but that doesn't seem unreasonable.

Edit: I understand this doesn't include salary increases, and getting hitched / hatching a kid, but regardless, most of the interest and debt will be forgiven (Don't ruin this, Republican House), and the monthly burden isn't too bad at all.

Edited April 29, 2011 by cckrspnl56

[lbjane]

I would not take out anywhere near that much debt for an MA in IR or Public Policy. It's just not worth it because it will limit your job options for a long time to come. It's a lot of money to pay back, and while you may be able to take advantage of loan forgiveness programs, I would not gamble that they will all be around in 12 years after you finish your degree and have been working for 10 years. A lot of policy can change, and the loan forgiveness may or may not still be there or the amount covered could change.

It's almost never necessary to take out that kind of debt for a degree that will lead to public service. The school rankings do not matter nearly as much as they might in law or business schools and the salaries are much lower. Government agencies will recruit at a lot of schools beyond the top SAIS/SIPA/MSFS schools, and will consider applicants from lots of other programs. In the government, where you got your degree matters a lot less than your experience and the skills you demonstrate in the interview process. So, it's just not necessary to take out a ton of debt when you can go to a lower ranked school and get more aid or an in-state school that doesn't cost as much. I went to the LBJ School at UT, which did not cost anywhere near $140k and my classmates and I still got great jobs that we enjoy.

I would agree with others and suggest working for another year or so if you can to save and improve your resume and then applying to wider range of schools where the costs are lower and/or you might have a better chance of getting more aid. You can then pick a school that will get you where you want without breaking the bank.