Finances on the stipend?

[anxious_aspirant]

This thread is inspired by the recent post to petition for tax exempt status - and because, now that things are getting down to the wire for decisions, many of us will (potentially) be mapping out our (bleak?) finances for the next few years. Those of us who aren't yet enrolled have much less experience with this sort of thing, so I'm hoping that you grad school veterans can help us out as we consider all those options. (Don't know about the rest of you, but the moment someone says "finances," I think my blood pressure skyrockets. Any info to alleviate the finance-induced anxiety attacks is welcome! )

First of all, to echo the earlier post, does anyone know the rate the stipends are taxed - or, perhaps more helpfully, what the take-home really is in contrast to its original amount? (Hopefully I'd be living somewhere cheaper than I do now, but many stipends in full would be eaten up by rent alone. A gal has to eat!)

Does anyone here hold a second job during the school year? If so, how does it work out for you in combination with teaching and classes of your own? Conversely, is it just common practice to get part-time work during the summer to offset the school year, and if so, what kids of jobs do you go for?

Perhaps too nitpicky to be planning at this point, but how do you all fare with your university health plans - especially average costs of things like prescriptions and routine office visits?

These questions, at least from my perspective, are geared toward those of you for whom the stipend is the be all and end all - those who are unmarried/unattached and therefore have no second income (or whatever other source of money you might have from family/parents, etc.) Also, perhaps younguns like myself with less in savings than our older/wiser counterparts.

I know there is a social taboo about talking/asking about how much money we make, so I'm hoping this won't come off as offensive - and that our relative anonymity makes it more comfortable to discuss. Even if it's not an answer to my specific questions, any advice or unforeseen financial conflicts that you could share might be helpful to us newbies. We'd appreciate your wisdom!

Thanks!

[Lord Horatio]

I'm wrapping up a terminal M.A. and getting ready to enter a Ph.D. program this fall (1 acceptance, 1 wait list - final decision not yet made). While I'm fortunate to have a second income supporting my household (my girlfriend has a "real" job), I think I can speak briefly to some of the issues you've raised here. Incidentally, I created the post with the online petition link (plug).

As I was saying, I'm in my last semester as a thesis option M.A. student at a very large state university. I have been supported, over the last two years, by teaching assistantships. At this school, assistantships almost always include a tuition waiver, health insurance coverage (a recent addition to the package), and a very small stipend. The stipend is not remotely competitive with some of the numbers I've seen associated with nationwide Ph.D. programs, but M.A. programs generally seem to have far less money to throw around.

I've had the luxury of simply working as an assistant at my current institution and attending classes. However, I've heard that several Ph.D. students take on work as adjuncts at local community colleges to supplement their income (usually, a completed M.A. is required to do this kind of teaching). My understanding is that the university officially disallows this kind of extra work, but students take it on out of necessity, anyway. Most professors turn a blind eye to the practice, recognizing that graduate study poses major challenges, financially.

I certainly can't fault the afterhours folks, at all, since they have bills to pay, though I would seriously discourage taking on this extra work if one can avoid it. Grad school is not only a lot of work: it is super competitive. Superior work requires concentration and focus. Teaching four classes a semester, as opposed to, say, two, doubles your extracurricular workload and detracts mightily from your ability to succeed in your own classes / individual research. I'm not saying that balancing extra jobs and school work can't be done, but I am saying that I wouldn't recommend trying it if I didn't have to. Consider taking out some manageable loans (subsidized, federal loans, more exactly) to cover fees, books, and other expenses. If you're getting a waiver and a stipend, you are already getting an excellent deal on your education, so the additional financial burden of a few small loans is miniscule, relatively speaking.

Also, consider the fact that grading English 101 papers is pretty much the worst thing ever.

Edited March 20, 2012 by Lord Horatio

[Timshel]

Just remember that starting July of this year, grad students can only get unsubsidized loans.

[anxious_aspirant]

If you're getting a waiver and a stipend, you are already getting an excellent deal on your education, so the additional financial burden of a few small

I totally agree. If given the chance, there's no way I'd turn it down. My concern is more for the long haul - I'm even less worried about my potential MA (which carries tuition remission with no waiver), because not being a TA means I get the coursework done in a year. Much easier to subsist on savings knowing that it's only for a short time. I'm not sure if there are people on these boards who are a few years in, but it'd be interesting to hear about that, if so.

Also...some of us are still paying back undergrad loans . Anyone else in my age group (early twenties) who will have the same problem?

[Datatape]

I was fortunate enough to make it through undergrad without owing a dime in student loans (very, very inexpensive state university, working full-time, supported by parents), but for my M.A. I elected to go to a very small, private college that doesn't support their Master's students, so I did have to take out about $16,000 in loans. It's split half down the middle, $8,000 subsidized and $8,000 unsubsidized. I don't recommend people doing what I did, but I don't regret my decision: the education I've gotten here and the relationships I've cultivated I'll carry with me for the rest of my academic career.

As for the Ph.D., however, you do whatever you have to do to get funding: apply for fellowships, apply for extra funding, pick up a spare job - whatever you have to do to get that funding, you do it. Most of us are going to have to move to a new city or new state to attend these schools and that cost will rack up fast. I've mentioned elsewhere a professor I had who elected to take an unfunded Ph.D. - she's been paying her student loans since 1990 and will be paying until 2032. You will never get rid of student loan debt.

[Fiona Thunderpaws]

Also...some of us are still paying back undergrad loans . Anyone else in my age group (early twenties) who will have the same problem?

Urgh, yes. And I really, really don't want to defer them while I'm in school. What are other people doing about their loans?

[anxious_aspirant]

Urgh, yes. And I really, really don't want to defer them while I'm in school. What are other people doing about their loans?

I'd also like to hear from others - I'm debating which is better: pay them off with savings (I'm lucky that they're not HUGE loans, but enough to hurt), and therefore deplete those savings before starting school, or keep paying that small sum each month and keep the security of savings (but then again, paying more interest in the long run). For me, deferring and just accruing exponential interest is just not an option.

[generic31290]

First of all, to echo the earlier post, does anyone know the rate the stipends are taxed - or, perhaps more helpfully, what the take-home really is in contrast to its original amount? (Hopefully I'd be living somewhere cheaper than I do now, but many stipends in full would be eaten up by rent alone. A gal has to eat!)

Stipends are taxed like regular income. With an $18,000 stipend, less than 5% will go to federal tax. Use this tool: http://www.irs.gov/individuals/article/0,,id=96196,00.html

Get a roommate or roommates, don't have car payments, make a budget. There are a lot of personal finance blogs and sites out there. Making do is not actually that difficult unless you have previous debt obligations, children, etc.

[Stately Plump]

I've not yet lived on my stipend, but at both the schools I visited, students said that the stipend was very manageable, and no one had trouble living on it (note that one of these schools was in a major city that is very, very expensive). They weren't taking out loans, from what I gathered. They were able to find apartments that were cheap enough--some of them even had places to themselves--and still work it out.

It really depends on what you're willing to put in. If you search hard enough, I'm sure you'll be able to manage. If you budget correctly, I think you can make it work.

Like I said, I haven't done this yet, but in theory, I think it works. We'll be okay (<--- sunglasses to hide uncertainty about living on meager stipend)

[Eigen]

One of the best ways to see how manageble your stipend is, is to talk to students at the school and ask them how livable it is in the area.

Things can vary hugely- I've seen stipends up to over $40k per year in the sciences, and down to $5-6k per year in some of the humanities- obviously huge differences in livability.

At least in the sciences, "most" stipends are made to provide a comfortable yet frugal standard of living in whatever area the university is in- I can't comment as much on other disciplines. Yxnstat gave a great tool for calculating taxes above- stipends are predominately taxed just like any other income, with some differences based on whether it's an assistantship or a scholarship/fellowship. Your first year, you should be able to take a tax credit from your last year of undergrad, assuming you're moving straight from undergrad->grad school. It's a particularly nice credit, because it's one of the few that is actually a credit rather than a deduction- you get it even if you didn't owe taxes.

Learning how to cook, getting a roommate(s), and getting around without a car (as mentioned above) are great ways to save money. Tutoring is another nice way to increase income- and for those of you writing specific people, there are some good places to find contract based work for ghostwriting, copyediting, etc. My old university used to hire English grad students on the side to do the copyediting on theses and dissertations- you might have something similar.

At least at my school, jobs and school-based financial aid are mutually exclusive- you can either have one or the other, but you can't work a side job and get funding without special permission from the department chair, and that usually only happens for especially pertinent jobs (ie, rarely).

I was able to (barely) support myself and my wife on a stipend my first year- it was tight, but we budgeted really well and were able to make it through, with the benefit of a little bit of our savings. We rarely ate out, we cooked and bought food frugally, etc. We worked our way through undergrad, and so we had no debt and a little extra set aside, and that helped a lot- especially with the expenses of moving and setting up a new place.

[user_name]

roommate, cook and buy in bulk, bike when you can, set temperature to <65 in winter and 75< in summer, eat/drink out less than once a week, bagged lunches...you can live comfortably on less than 10,000 a year.

[poeteer]

Urgh, yes. And I really, really don't want to defer them while I'm in school. What are other people doing about their loans?

Can't you defer them and just keep paying what you can? That way you're off the hook, in case you're having a rough month?

[Venti White Choc. Mocha]

I wonder if you can get one loan before July, without terms subject to change.

[Fiona Thunderpaws]

Can't you defer them and just keep paying what you can? That way you're off the hook, in case you're having a rough month?

Hopefully I can, because that would be the best case scenario, but will I be punished for deferring at all somehow? I know very little about how deferring works, but I'm worried it'll make my interest rate spike or something. My loans are unsubsidized, so there is always interest always.

*is assuredly not a finance major*

[perrykm2]

My stipend is going to be about the same amount of money I make now as a contracted technical writer (not much.) I'm also going to finally have health insurance.

It will be just like always.

Edited March 21, 2012 by perrykm2

[anxious_aspirant]

Stipends are taxed like regular income. With an $18,000 stipend, less than 5% will go to federal tax. Use this tool: http://www.irs.gov/i...d=96196,00.html

Thanks. Definitely bookmarking this tool forever; necessary for a finance dummy like me. I don't think I know the difference between subsidized and unsubsidized loans [necessary shame acknowledged]. Only loans I've ever had are my undergrad ones, and that money just magically disappears from my checking account monthly...

Glad to hear most people are finding stipend-living okay. I was fearing an anecdote like, "And then I found out I had a life-threatening illness, couldn't afford it, and died." (Not that said people are around to tell of it, I guess). I'm all about frugality, even now, having a "real" job. I just always hate that roommate situation where the others in your apartment want deluxe satellite TV and internet with enough force to power the space station, and you end up paying chunks of these huge bills you never wanted anyway. Hopefully we'll be living with people in similar financial straits.

[poeteer]

I just always hate that roommate situation where the others in your apartment want deluxe satellite TV and internet with enough force to power the space station, and you end up paying chunks of these huge bills you never wanted anyway. Hopefully we'll be living with people in similar financial straits.

I think most stipends would be enough for a studio apartment, at least those in towns and small-moderate sized cities. I can't live with a roommate! I'd rather have a little more credit card debt than a roommate.