How do people live off of student loans??

[LittleDarlings]

So this just hit me, I am actually going to graduate school in the Fall! Which is so exciting but so scary too.  I have only focused on how it will benefit me and the social aspect.  I thought about the financial aspect but not as much.  Right now I am job searching so I can have a little nest egg to start with in the Fall, I have two promising opportunities.  I am looking more into student loans because I know it is inevitable.  I know with Federal loans you can take out a max of 20,000 dollars, but I read on the website that they don't actually give you more than your tuition.  I am going to OSU which is about 12,000 a year just for tuition, then I have to consider books, a place to live, food and my other bills (car, utilities, water, phone, internet) hopefully I will be able to get into graduate housing which covers utilities and I would just pay for water. I know my parents will help as much as they can but I have a brother in undergrad and they have pretty much stretched our money as far as it can go, I don't want to be selfish and ask them for more than they can give.  I am afraid. Every aspect is so scary and exciting, I mean I know people do this ALL THE TIME and manage and it is fine but most of the advice I have gotten is from people who have two incomes which is great but not my case.  I know also that you can take out Grad PLUS loans for if you need anymore than what you are given.  How has the financial aspect worked out for you all?

 

I am wondering if I can find an on campus receptionist type job and then that would help, or even a job anywhere but I have to consider that I am going to school and my grades are my number one priority.  I am just wondering how people do this alone? Am I being unrealistic? I got into an argument with my mom the other day and she pretty much said that going to school for social work is pointless because I will not make enough money to support myself.  I don't believe that, I can do this right? I mean I just have to budget and you can pay loans back based on your salary (federal loans) I can do this, I know I will never be rich but I think that even alone making 40-50K a year is ok, and then if I ever have an other half even if they made 30K a year we could still financially survive right? I am jumping way ahead of myself (like always!) but I really believe I can handle this, I want this career so much.  Any advice about working while in school? I looked up TA and GA and they aren't offered to graduate students.  So any advice at all? About working, or living on loans, or just not being a ball of stress all the time?!  

[Lisa44201]

Again, congrats!!

 

If you're going to OSU.... correct me if I'm wrong, but that'll put you at the in-state tuition rate, yes? Is the tuition you've posted accurate for in-state? (That's what it is for out-of-state here).

 

Student loans: You can take out as much as you are awarded; it's not just tuition. Let's say your tuition is in fact $12,000, and you're awarded $20,000. Both of those will be split per semester; so, you'll get billed in the Fall, and again in the Spring. For argument's sake, let's say your bill for each semester (after fees and whatnot) comes to $8,000, and you take the full loan. The loan amount gets transferred to your Bursar account, and is processed against your balance; anything remaining goes to you - in this case, $2,000 (remember, per semester) - in the form of a refund. That refund should go towards expenses related to grad school: books, rent, etc.

 

The job prospects for an MSW are very good. It may not pay a fortune, but you'd almost certainly be able to find a job.

 

It's not impossible to work and go through grad school, but it is difficult. It's all about time management.

[Loric]

Once the financial aid office has your FAFSA they will have a number that is your total costs for the semester (estimated). This is your loan limit. Federal loans are first, then assuming you've not filed bankruptcy or defaulted there are grad plus loans. If you have no credit or very bad credit you need a consigner for grad plus. After that, anything else is a prvt loan. Between fed loans and grad plus you should hit the top if your "total cost" which you can't borrow past unless you use private loans (need good credit and it depends on major/degree and income - even then the terms are almost always a rip off.)

On campus the amount you can get is higher but goes right to the school (cuz on campus housing is expensive. Plus dumb meal plans).

Off campus will be less, but should pay for decent rent and living. Nothing glamorous. It'll be solid by semester as mentioned above. You don't get it until after the semester starts, usually aftr add/drop. So you need that savings to get moved and cover basic living.

Books/supplies are estimated in the overall limit, but since you often need them before you get your payout (sign up for direct deposit btw) you might want to make sure you have a decent charge card limit to use if possible.

[Loric]

Also any awarded aid comes out if the pot first. So you don't get a tuition waiver and the loans to cover tuition.

[LittleDarlings]

Thank you both! 

Ok I am stressing a little less, I am not sure if I will get scholarships (hopefully) but I think I can live off of 4,000 a semester.  OSU is 12,424 a year instate according to the website.  The funny thing is if I got into Kentucky they are about 11,000 out of state.  Even though UK is cheaper I think moving out of state completely would be costly.  I also forgot about getting a credit card, I have one but the limit is like 2,000 dollars.  I am really good about making all of my payments on time and my credit is pretty good so hopefully I can get grad plus loans if needed.  I can totally handle this, and last time I was on indeed.com looking for jobs I saw so many jobs open just in this area for LISWs and LSWs so I can only imagine what a big city like CBus has or even out of state.  I can always get my Ohio license after gradation and the supervision hours and then get licensing somewhere else too if I find a job there.  

[TakeMyCoffeeBlack]

Once the financial aid office has your FAFSA they will have a number that is your total costs for the semester (estimated). This is your loan limit. 

 

Admittedly I have no idea how grad financial aid works, but are you sure about this? My buddy is in his first year of an audiology program and his first two years' tuition are completely covered, yet he still took out the $20,000 federal loans for living expenses. I'm not sure if that is some weird circumstance?

[TakeMyCoffeeBlack]

Look at the cost of grad housing and divide by 12 (even though you only get to live there for like 9 months, I think). How much is it a month? In most cases, you will save a lot of money by living off campus, either in a studio or by finding a roommate. 

 

Also, be in touch with your program and financial aid soon and frequently. My girlfriend got a sweet gig at like $18 an hour for 18 hours a week at her grad school, but it was one of very few jobs like that.

[TakeruK]

Just to add to the great stuff others have already said:

 

On campus the amount you can get is higher but goes right to the school (cuz on campus housing is expensive. Plus dumb meal plans).

Off campus will be less, but should pay for decent rent and living. Nothing glamorous. It'll be solid by semester as mentioned above. You don't get it until after the semester starts, usually aftr add/drop. So you need that savings to get moved and cover basic living.

Books/supplies are estimated in the overall limit, but since you often need them before you get your payout (sign up for direct deposit btw) you might want to make sure you have a decent charge card limit to use if possible.

 

In some schools, grad student housing residents are not subject to dumb meal plans. At all the places I've been to and visited, grad student housing all have (shared) kitchens and are exempt from meal plans (although some places allow for meal plan opt-in).

 

To save money on books, you might be able to get them from the library. Most of the time, the course instructor will put the course textbooks on reserve and you can just use it at the library. If you're lucky, you might even be able to check out the book if there are multiple copies (usually only a couple of copies go on reserve). Sometimes book titles are announced/released ahead of time so you might be able to do this before the first class and the syllabus is distributed. A good guess is also to look up the course syllabus/website from previous years and just check out those books ahead of time in case they are the same this year.

 

 I also forgot about getting a credit card, I have one but the limit is like 2,000 dollars.  I am really good about making all of my payments on time and my credit is pretty good so hopefully I can get grad plus loans if needed. 

 

If you have had the credit card for a while (maybe a year or so?) you can probably ask to be approved for a higher limit. If you want to increase this limit, you can probably ask every 6-12 months. If you use your card responsibly, the credit card can be really helpful in delaying payments without having to incur interest or service fee charges!

[juilletmercredi]

Admittedly I have no idea how grad financial aid works, but are you sure about this? My buddy is in his first year of an audiology program and his first two years' tuition are completely covered, yet he still took out the $20,000 federal loans for living expenses. I'm not sure if that is some weird circumstance?

 

Yes.  The total cost of attendance (aka the loan limit) doesn't just include tuition and fees; it also includes living expenses.  For example, my university's cost of attendance is about $60,000 - it includes the approximately $40,000 that our tuition and fees costs, but also the roughly $20,000 the university estimates it costs to survive for 9 months in our university's city.

 

 

I looked up TA and GA and they aren't offered to graduate students.  So any advice at all? About working, or living on loans, or just not being a ball of stress all the time?!

 

The OSU website says something different.  GA actually stands for "graduate assistant."  Check this out: http://gradadmissions.osu.edu/Costs.html.  I'm not sure if you are referring specifically to the school of social work, though (or even if you are talking about a different "OSU").

 

 I got into an argument with my mom the other day and she pretty much said that going to school for social work is pointless because I will not make enough money to support myself.  I don't believe that, I can do this right? I mean I just have to budget and you can pay loans back based on your salary (federal loans) I can do this, I know I will never be rich but I think that even alone making 40-50K a year is ok, and then if I ever have an other half even if they made 30K a year we could still financially survive right?

 

Actually in this case, I don't think you're jumping ahead of yourself.  You're actually thinking realistically.

 

OSU's tuition is $12,424 per year.  They have graduate housing that's around $770/month, which works out to about $7,000 for 9 months (and $9,000 for 12 months, which I think is more realistic).  I'd expect your food costs to be around $3,000 for 9 months or $4,000 for 12 months (at about $300/month).  Other personal expenses...well, that depends on your personal spending habits, but I'd say another $400/month - so $4-5,000.  So a conservative estimate is about $15,000 for 9 months or around $20,000 for the full 12 months.  12 months is more realistic because you have to be able to live during the summer, of course.

 

So let's say $20,000 for the first year and $15,000 for the second, for a total of about $35,000.  Add that to $25,000 ($12,500 x 2) and that's about $60,000 in debt over the two years, with a pretty conservative estimate for living costs.

 

It's generally recommended that your monthly loan payment be no more than 10% of your gross monthly income; sometimes 15% is put forward, but that will give you some financial difficulty.  With a $60,000 loan debt at 6.8% interest (standard), your monthly loan payment will be about $690/month.  To stay within that 10% target, you'd have to make over $80,000 per year.  Put another way, if your starting salary as a new social worker is about $45,000, your monthly payment will be 18.5% of your monthly gross salary.  (If you made $50,000, it'd be about 16.5%).

 

So you will probably struggle financially to repay that loan.  Sure, it may be easier with two incomes, but your husband may also have some student loan debt from his educational journey.

 

Now note that under the new federal programs (income-based repayment or Pay As You Earn), you can limit your monthly repayment to 10-15% of your discretionary income.  You can play with the repayment estimator here: https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action. Let's say that you make $50,000. Under IBR, you'd pay $410/month and under PAYE, $273.  Every year you have to resubmit documents to re-establish your eligibility, but as long as your monthly payment under the standard plan would be more than 10-15% of your discretionary income, then you would be eligible for the plan.  After 20-25 years (depending on the plan) they would forgive whatever's left.  Since you are a social worker, you would likely be eligible for public service loan forgivenness, which means that you would only pay for 10 years and then your loan balance would be forgiven.  The only downside is that you do have to pay taxes on the forgiven amount as if it was income, but that may be a lot better than paying $700/month for 10 years.

[Loric]

Yeah, upon graduation immediately sign up for income based or whatever is offered at the time. Let the clock start ticking on the forgiveness right out of the gate. From undergrad I knew people who made near nothing for a few years and they paid the full payments on their loans instead of the income-based, which would have been zero for many of them.

 

The income based repayment essentially makes it so that you don't spend forever living behind the eight ball if you dont end up having a successful career. PAYE is new to me, so i'll have to see if i should push my old fed loans over into that.

 

Regardless, don't "fear" federal loan debt - be realistic, but if you end up in hard times or just generally poor then you wont be paying all your monthly income to a student loan. Beware of prvt loans though.

[Guest Gnome Chomsky]

Yeah, upon graduation immediately sign up for income based or whatever is offered at the time. Let the clock start ticking on the forgiveness right out of the gate. From undergrad I knew people who made near nothing for a few years and they paid the full payments on their loans instead of the income-based, which would have been zero for many of them.

 

The income based repayment essentially makes it so that you don't spend forever living behind the eight ball if you dont end up having a successful career. PAYE is new to me, so i'll have to see if i should push my old fed loans over into that.

 

Regardless, don't "fear" federal loan debt - be realistic, but if you end up in hard times or just generally poor then you wont be paying all your monthly income to a student loan. Beware of prvt loans though.

So even if I'm only out of school for 3 months, I should still immediately apply to pay income-based?

[Loric]

Not sure if the time accrues or what, but you're probably in the initial deferment period anyways.

 

Poke around and see. The mistake people make is paying for a year or two before realizing they could have been on a plan and accruing time toward forgiveness.

[MadtownJacket]

I'm not familiar with loans, but I may need to take some out for graduate school.  Do they limit how quickly you pay off the loans?

[LittleDarlings]

Yeah, upon graduation immediately sign up for income based or whatever is offered at the time. Let the clock start ticking on the forgiveness right out of the gate. From undergrad I knew people who made near nothing for a few years and they paid the full payments on their loans instead of the income-based, which would have been zero for many of them.

The income based repayment essentially makes it so that you don't spend forever living behind the eight ball if you dont end up having a successful career. PAYE is new to me, so i'll have to see if i should push my old fed loans over into that.

Regardless, don't "fear" federal loan debt - be realistic, but if you end up in hard times or just generally poor then you wont be paying all your monthly income to a student loan. Beware of prvt loans though.

I am definitely going to avoid private loans. I talked to my therapist about this because she has been through this process. She talked about how she got all her loans through Sallie Mae and has since consolidated her student loans and pays like $150 a month over the course of 20 years I think. I always thought you couldn't consolidate private loans.

I am just going to more than likely take out the max in student loans (20,000), then in Grad PLUS maybe I can take out a small amount like 5,000 a semester. As long as I can make my car payments and have a place to live I will be fine. I am perfectly ok with living off of ramen noodles, if needed, and my parents would more than likely help me with food expenses. People do this all the time, this website is an example of that. I can do this! I also contacted my advisor and asked for info about TA/GA. I applied to scholarships, and I am searching for private scholarships. Right now, I am looking into a job to save up and maybe once school starts I can find an on campus job also during the year. I have also considered taking a commission type job while in school, like selling stuff. I have a friend who sells Advocate, and he was in the same position as I am now and he makes about 2,000 a month which is good. I am looking into that, I can make this work!

Edited January 19, 2014 by CorruptedInnocence

[Guest Gnome Chomsky]

I am definitely going to avoid private loans.  I talked to my therapist about this because she has been through this process. She talked about how she got all her loans through Sallie Mae, and has since consolidated her student loans and pays like $150 a month over the course of 20 years I think.  I always thought you couldn't consolidate private loans?

 

I am just going to more than likely take out the max in student loans (20,000) then in Grad PLUS maybe I can take out a small amount like 5,000 a semester.  As long as I can make my car payments, and have a place to live I will be fine.  I am perfectly ok with living off of ramen noodles, and in the end my parents would more than likely help me with food expenses if nothing else.  People do this all the time, this website is an example of that.  I can do this! I also contacted my advisor and asked for info about TA/GA, I applied to scholarships, I am searching for private scholarships, I am looking into a job to save up now and maybe I can find an on campus job also during the year.  I have also considered taking a commission type job while in school, like selling.  I have a friend who sells Advocate and he was in the same position as I am now and he makes about 2,000 a month which is good.  I am looking into that.  I can make this work!

Is this the same therapist who sends her papers to her mom to correct the grammar? 

[TakeMyCoffeeBlack]

I have also considered taking a commission type job while in school, like selling.  I have a friend who sells Advocate and he was in the same position as I am now and he makes about 2,000 a month which is good.  I am looking into that.  I can make this work!

 

My sister does Tastefully Simple and loves it. She works one or two nights a week, gets to socialize and eat at the parties, and pulls in a decent amount of cash. 

[Loric]

I'm not familiar with loans, but I may need to take some out for graduate school.  Do they limit how quickly you pay off the loans?

 

No. Got the money? They'll take it.

[MadtownJacket]

No. Got the money? They'll take it.

 

Good to know.  Thanks!

[socioholic]

LOL, there wouldnt be a student loan crisis if they didnt give you more than your tuition. There is a limit on what u can get each year. You accept however much of it u want and whyatever is left over after tuitioin getsx "refunded" to you. There are people going to scvhool simplky for these refunds.

You probably will need to a job. The only people ive seen living off of student loans alone had a bunch of roommates, lived with parents or lived that broke student life most of us swear off after graduation.

[juilletmercredi]

The income based repayment essentially makes it so that you don't spend forever living behind the eight ball if you dont end up having a successful career. PAYE is new to me, so i'll have to see if i should push my old fed loans over into that.

 

You can't - PAYE is a new program and so you have to have borrowed the loans after a certain date (I think it's in 2010 or 2011) in order to be eligible for it.

 

Do they limit how quickly you pay off the loans?

 

No, there's no minimum time limit - you could pay them all the month after you graduate if you wanted to.

 

I always thought you couldn't consolidate private loans.

 

You can't consolidate them federally or with federal loans, but some people get a private consolidation loan.  All "consolidating" loans is borrowing another loan from some agency (bank or government) for the total of what you owe.  The agency pays off your loans and you pay them, for however much a month and however long you have agreed with.

 

I am just going to more than likely take out the max in student loans (20,000), then in Grad PLUS maybe I can take out a small amount like 5,000 a semester. As long as I can make my car payments and have a place to live I will be fine.

 

Unless your tuition is covered you may need more than that.  You will need enough to cover the $12,000 per year plus the amount it costs you live.  $5,000 per semester may not be enough since your rent alone will be about $3,000 of that, and the remainder will barely cover food and gas.

[Meanyus]

If you do decide to work, even part time. It's a great idea to pay the interest on your loans. It ends up making a huge difference over the 20-30 year repayment period.

 

For your situation it sounds like it might be a good idea to take out the loans to ensure you can make all your payments, then work as much as you can while managing your studies to build a nest egg or start paying back on those loans.

 

I know I'm just pushing off my loan time bomb until I finish the Ph.D., I'll deal with it then!

[LittleDarlings]

The relief in all of this is a lot of people are going through this. It isn't just me so I'm thankful for that because hey... Tons of people will be poor like me lol! It'll be worth it in the end. I'm glad for not having undergrad debt too.

[justastudent]

You can ask that your MSW practicum be paid. Also look into on campus work study jobs. Don't forget u can work over summer.