How much loan is too much?

[ruru107]

Hi, I'm going to start an MA in art history this fall...the school will not tell me anything about funding until June. I'm crossing my fingers and hoping that I got something, but I could end up taking out 18,000 to 19,000 for the first year. Is this bad? I have no idea how much grad students borrow on average...should I be worried?

[Arya Underfoot]

Hi, I'm going to start an MA in art history this fall...the school will not tell me anything about funding until June. I'm crossing my fingers and hoping that I got something, but I could end up taking out 18,000 to 19,000 for the first year. Is this bad? I have no idea how much grad students borrow on average...should I be worried?

Loans are bad, Mkay? But seriously, I would think long and hard before taking out loans to cover a program with such poor job prospects as art history. Try imagining yourself working at a coffee shop after you graduate while paying back this loan very slowly as it accumulates interest - this is the worst case (but by no means highly unlikely) scenario.

[stell4]

I'll be taking out around 40K - 50K (assuming I will not get any funding, there's still hope, but not for my first sem.) by the end of my 2 yr MS program. I am ok with this because the equity I have in my home will completely pay off loans once I sell. However, there's the chance I may hold onto the home after graduation which will still work out since I know that in my field there are many job prospects that will put me in a great place to pay off the loan in a reasonable amount of time (plus I'd have rent $ from renting out the house).

I agree with the poster above that you should think about your possible job prospects and starting salaries when you finish school as well as worst case scenarios. I think of 18k as about the price of a nice car, but your interest rate is probably higher, so you could probably get by paying that off regardless of your job out of school especially if you already have a car payed off or take the bus. You may also want to consider the possibility that you will not get funding for the second year (I am assuming you're in a 2yr program) and that would put your debt closer to 40K once you're out of school. That is a lot more debt and a lot more money you'll be paying off for the interest. If that is a possibility than I would suggest really considering/planning how you will be able to pay that off before you're at the point that your payments are just paying the interest.

Edited April 10, 2012 by stell4

[RosamundReage]

I would absolutely never take out such a big loan for an MA in Art History, unless you have a guaranteed job to go to after your MA. I really do not see the point of doing graduate degrees in the humanities unless you have funding, because it is very unlikely you will be able to pay off the loans right after you graduate.

I would contact the schools financial office to see about options. You can also email your POI and ask them if they have/know of any RA/TAships you could apply for next year.

[acg]

I don't think it's fair to say "you shouldn't take out a loan in the humanities because you'll never pay it back". As a student who got an undergrad degree in humanities and a masters in engineering- it has nothing to do with discipline and more to do with being smart and setting goals/priorities. I took out loans in undergrad and I worked nearly full time 30-40hrs a week on top of school in order to pay loans back as I went through school. I think this is very reasonable. I paid back all of my undergrad loans within about 6 months of graduating and I never had a high paying job (all of my jobs were part time, minimum wage jobs). In grad school, I've had several friends who take a full grad load (9-12 credits courses) and work at nights or on weekends in order to pay back loans as they go. What kills you on the loans is if you wait for years and only make minimum payments. If you are smart about it and figure out what you can make while working (part time or full time) and going to school set a budget and make it happen. With the amount I currently make (working 20 hours a week) I could very easily take out a 18k loan and make double or triple the monthly payments with still providing enough extra income to live on. I think there is no wrong answer for loans as long as you are realistic about your budget, your in and out flows of cash, your expenses, and your future interest rate.

[RosamundReage]

I don't think it's fair to say "you shouldn't take out a loan in the humanities because you'll never pay it back". As a student who got an undergrad degree in humanities and a masters in engineering- it has nothing to do with discipline and more to do with being smart and setting goals/priorities. I took out loans in undergrad and I worked nearly full time 30-40hrs a week on top of school in order to pay loans back as I went through school. I think this is very reasonable. I paid back all of my undergrad loans within about 6 months of graduating and I never had a high paying job (all of my jobs were part time, minimum wage jobs). In grad school, I've had several friends who take a full grad load (9-12 credits courses) and work at nights or on weekends in order to pay back loans as they go. What kills you on the loans is if you wait for years and only make minimum payments. If you are smart about it and figure out what you can make while working (part time or full time) and going to school set a budget and make it happen. With the amount I currently make (working 20 hours a week) I could very easily take out a 18k loan and make double or triple the monthly payments with still providing enough extra income to live on. I think there is no wrong answer for loans as long as you are realistic about your budget, your in and out flows of cash, your expenses, and your future interest rate.

I actually didn't say that you will never pay your loan back if your degree is in humanities, but that you will not be able to guarantee that you can pay your loan back right after graduating in the humanities. Some fields, like say some forms engineering and some science degrees, have much higher job placement records than say an MA in art history, these are just the facts. After receiving a humanities MA, especially in a field like art history, you will very likely be looking for a job for at least a few months so you have to factor that into your plans. Also, many people who are pursuing an Art History degree will want/need to continue into a PHD program and that will greatly increase your chances of accumulating a large amount of debt.

I also want to point out that I think it is bad advice advise someone to get a full time job while pursuing a graduate degree full time. A couple people that I know in my program who attempted to work and go to school full time completely burnt out and did not do well at all in our program. i guess it is somewhat dependent on the rigours of your program, but you will want to be able to do research, go to conferences and try to get published and I have never seen that happen with someone who has tried to work while in full time graduate program. There is a reason that programs who provide funding often do not allow you to work more than 10 hours a week while taking courses.

[acg]

You are absolutely right RosamundReage that there are different job placement records for different graduations! That is a fact. Unforunately you also said you do not see the point of doing graduate degrees in the humanities unless you have funding- which is not the point. The discussion is about someone who has already decided to go to graduate school and wants advice on taking out and managing loans. You are also correct that graduate school is very intense and requires time for research and conferences but I never said I recommend taking full time job on top of full time school (although I know several people who do it very successfully and I am currently at a top 25 research university in the US)- I simply said that working part time (I currently work 20 hrs/wk) is an imporant way to keep control on student loans. In fact, right now, I have no debt and already paid off the small loan I took out in my first year of graduate school.

Another way to keep control on these loans is to pay them before they are actually due (since many student loans don't have to be paid until after graduation). If you pay down your balance while still in school it is not a very large burden (regardless of your future job) especially for a loan that is only 15-18k. If you're taking out 300k then that is a very different financial situation. These are just my experiences with taking out loans in undergrad and grad school and I wanted to share but obviously everyone does things differently.

Good luck with grad school and your loan decisions ruru107

[sociologo]

At the very least, try to get the federal loans with lower interest rates. Avoid private loans at all cost if you can - unless selling your soul and firstborn child is something you think you'd be fine with.

[RosamundReage]

The operative words were "right out of grad schools" and this is absolutely another correct statement as many students go into graduate studies thinking they can pay off the loans after they graduate and with disciplines like humanities you will often have to wait a significant amount of time before you get a job and thus will not be able to pay off your loan on time. I have friends who have graduated with MAs from some of the top universities /programs in the world and have been unemployed for over 6 months and are unable to pay off their student loans. ruru107 was specifically asking if 18,000-19,000 is a lot for loans, and in my experience it would be a lot. I actually recommend that in any discipline people think very carefully taking out large loans at the graduate level, as student loan debt has become an epidemic in an economic downturn with record unemployment.

Again 20 hours is over the recommended hours that most programs would suggest a graduate student work. Again this is all dependent on specific circumstances, but as someone who has graduated with an MA in humanities and continued onto a PHD program I would not recommend working over 10 hours if you want to do your PHD and take full advantage of professional development through going to conferences, applying for grants and getting published.

Your experience is valid, but so is mine and the other people who posted about being careful about taking out loans. You are very lucky that you have been able to get jobs and pay of your loans, but it is becoming increasingly difficult for people to be able to do this. If you read my first post I don't advise the OP to give up, but to contact the school about RA/TAships and other grants available. I too wish the OP well and hope you get some sort of financial help and if you do have to take out a smaller federal loan arandall suggested, but do contact the school and try to work something out before you consider taking out any loans.

[ruru107]

My situation isn't as bad as some, because I didn't borrow anything for undergrad. I'm aiming for a museum position, so I won't be continuing on for a PhD. So what I might have to borrow for the next two years is all I'll have to worry about. The loans I'm considering are federal, not private, so that makes things a little better too, I guess.

I did apply for 3 curatorial assistantships and a teaching assistantship, but the positions haven't been awarded yet. I'm also checking my eligibility for a work study. The loans would be a worst-case-scenario that I'm trying to prepare for.

My parents have taught me my entire life to NEVER borrow money for any reason. I don't think they've ever used a credit card...anyway, this whole situation is really icky for me, but I don't know what else to do to get a career I won't lose my mind doing.

Thanks everybody for your help. I really appreciate your advice.

[delight]

Maybe you should seek advice from people who are less cynical about degrees in humanities! Having an undergraduate degree in art, I know plenty of people who pull out $50,000 a year for their MFA degrees - not abnormal to see people with $200,000 to eventually get a masters. Definitely not a pragmatic approach, considering that your life quality will be severely hampered by your loans after graduation. HOWEVER, if you're considering non-profit work in museums, federal loans have a 10 year forgiveness plan. You can get on an income-sensitive plan, pay for 10 years, and have the rest forgiven

[tiffanyamber81]

I have a friend who graduated with a MA in Art History and is now a Director of Programs at a museum. So, I disagree with above posts to rethink your your Masters. Honestly, I think $18000 isn't bad in the long run. If you prepare yourself professional; work as an intern at museums or galleries you will be able to get a job and pay off the loan.

[ruru107]

@delight- Thank you! I didn't know that about non-profit work.

@tiffanyamber81- I've had a couple internships so far...I totally agree with you. I think people can study almost anything, they just have to work REALLY hard at it and be at the top of their field. If someone networks ambitiously, is a hard worker, etc. it can really pay off.

[felicidad]

Before you make a decision about taking out this type of loans, I recommend that you go to the Chronicle of Higher Education forums and read the many threads there about the job search in humanities and paying off loan debt. The posters there are professors, some of whom avoided crippling debt while still pursuing their academic dreams, and some of whom are still digging themselves out from under mountains of loans. I think reading the threads there will give you a better perspective than the opinions on this forum. After all, the majority of us, myself included, are either prospective grads or new grads and do not have the hindsight of people who have already completed this process.

My personal opinion is that I would not consider taking out those sorts of loans. Debt is extremely stressful and there are many funding opportunities out there. I wouldn't consider taking out loans until I had absolutely exhausted all avenues for external funding, and then I would reevaluate my plans and programs based upon my financial situation. This might be a situation where you would be greatly benefitted by patience.

[ruru107]

Good news for anyone still interested in this thread...I was awarded an assistantship for the upcoming school year! I am so excited and so thankful! And most of all...thrilled that I won't have to take out any loans! Thank you for all the input here--definitely lots of ideas worth thinking about.

[stell4]

Congrats!

It looks like I may have some funding coming my second semester so hopefully my loans will be a lot less than what I am planning for

[lewin]

One rule I have heard is not to exceed your expected income the first year out of University. If loan = first year's income then it's reasonable to pay it off within seven years (a typical period). Resist the temptation to pay it off in ten.

[manoj9585]

Hi sir ,

I want to study further in abroad in this case can i apply for study loan and give the information about interest.