HKS worth $130K in debt?

[vannik]

EXACTLY.

Ok, lets stop talking about language and focus on the point that Math123 and Definatelymaybe is missing from the purpose of my original posts. I will have $130k in loans by the time I complete a degree program which I shall have a starting salary of $100,000. My take home salary which is assumed to be close to 65% of the gross income will be: more than $5,400 a month. With your stupid calculator that you so blindly used, If my loans were $1,600 a month; I'd be left with $3800 a month for food, rent, cellphone, car, and beer. Lets say all those bills add up to $2,000 (which is very high) I'd have $1,800 left to spend on things I do not need.

How is this not capable of paying back that loan? Why does your calculator say I need $242,000 to pay back $1,600 comfortably? It's because they are not assuming you are making a large sum of money. Obviously if you make $40,000 a year you cannot handle a $1,600 a month loan. If you make $100,000 you can. I have many pharmacist friends who are doing this and living better than the majority of the people in this country.

Math123, if you HONESTLY think that you need to make $242k a year to pay $19,200 a year back in loans, you are saying that no one in this country can live comfortably, or survive for that matter, with less than $126,000 in TAKE HOME SALARY.

Again, I reiterate, with your blind faith on that calculator, to pay back $1,600 a month you would require a gross monthly salary of $20,166. A take home salary of $12,100. A spendable income after loan payment of $10,500.

In my opinion, if you made $242,000 a year, you could probably pay $8,1000 a month on student loans and pay rent and live with the remaining $4,000 quite comfortably. This means you'd be paying back 40% of your gross salary to your loan debt, which is 5 times more than that stupid calculator you are using.

Please, before you spout off nonsense realize that people who have the intelligence to get advanced degrees in engineering know how to do basic algebra. If you do not think $4,000 a month in take home salary is enough to live off of, or you yourself spend more than $1,000 a week between your non-student loan based bills (i.e. rent, food, car, ect) then it is not ME who you should be worried about.

Do the math before you repost. Read my math before you repost. Please tell me where my math is incorrect, other than reading "You should not go over 8% of your gross for student loan debt." That is a good rule of thumb, but if you could make a million a year, i'm sure you'd take out a $250,000 debt because it'd be trivial to pay back, when one makes that kind of money.

Edit: This is without adding the 30% tax refund you get for paying your student loans back. So, $1,600 a month payment would net you $5,760 back come tax time, which can be rolled back into your student loan payments.

[Stories]

EXACTLY.

Subprime loans are completely different than educational loans.

People who shouldn't have been approved for loans were getting approval on loans at rates that exceed 10%.

Two different animals.

[DefinitelyMaybe]

Uh yeah, I'm not reading all that shit.

If you are 100% certain you have a job lined up for you after you graduate that will pay you $100k, then go for it. The income to debt ratio in that instance really isn't THAT bad, in my opinion.

I'm talking about folks who will have typical SERVICE careers upon graduation (government, non-profit, etc.); where if they come out making more than $45k, they're doing extremely well. I would NOT advise borrowing $130k for a public service degree because MORE THAN LIKELY, you will not have a salary that will allow you to pay that back without making a huge financial sacrifice or enduring hardship. Public Service degrees are not like law school, business school or medical school, where your salary upon graduating and passing any requisite certification exams will be substantially higher than what you owe.

I work for the government now; I hear stories everyday of the week from people who borrowed essentially a MORTGAGE to go get all this education, thinking it would open all these doors for them and they would have these awesome salaries and benefits. They thought wrong; even people who have these degrees are struggling. If they aren't UNEMPLOYED, they have a job that only pays them 1/3 (or less) of their debt burden and they are drowning in debt.

All I'm saying is don't underestimate the effect that a huge debt like that can have on your life. I agreed with Math123's sentiment that people are being blase about borrowing hundreds of thousands of dollars like it's nothing; like they won't have to pay that money back WITH INTEREST.

Harvard is great, but it's not THAT great.

[vannik]

Uh yeah, I'm not reading all that shit.

If you are 100% certain you have a job lined up for you after you graduate that will pay you $100k, then go for it. The income to debt ratio in that instance really isn't THAT bad, in my opinion.

I was offered a job at $75,000 with a bachelors. The average salary of my field PhD is around 6 figures, so yes, i do expect that. I also expect people who don't read posts to not bother replying. How disrespecful is that? The whole point you were trying to make is exactly what I was saying. If you have low income don't take a huge debt out. That's exactly correct. But you government types found the need to say I would need to make $242,000 to pay back my debt, which is just stupid and wrong. I can't fathom how you got a degree with your attitude and lack of reading comprehension.

Uh. yeah, you're a moron.

Speaking of being inept and disrespectful, I am glad you think that $72,000 salary (what I will be left with after I pay student loans, which are too high to pay back WITH INTEREST!!! RUN AWAY!) for a 26 year old single person isn't THAT bad to live off of. I know, it'll be a struggle, especially since it's about $30k higher than your salary. But yeah, I'm stupid for taking out loans.

Please refrain from posting if you're too arrogant to read something that proves you're being stupid.

*edit: DefinitelyMaybe will be the person who buys a house for $200,000 and goes under due to mortgage and upkeep costs. Marry rich, or never own a home.

[math123]

wow; just, wow. now, surely that's "racist"!

I was offered a job at $75,000 with a bachelors. The average salary of my field PhD is around 6 figures, so yes, i do expect that. I also expect people who don't read posts to not bother replying. How disrespecful is that? The whole point you were trying to make is exactly what I was saying. If you have low income don't take a huge debt out. That's exactly correct. But you government types found the need to say I would need to make $242,000 to pay back my debt, which is just stupid and wrong. I can't fathom how you got a degree with your attitude and lack of reading comprehension.

Uh. yeah, you're a moron.

Speaking of being inept and disrespectful, I am glad you think that $72,000 salary (what I will be left with after I pay student loans, which are too high to pay back WITH INTEREST!!! RUN AWAY!) for a 26 year old single person isn't THAT bad to live off of. I know, it'll be a struggle, especially since it's about $30k higher than your salary. But yeah, I'm stupid for taking out loans.

Please refrain from posting if you're too arrogant to read something that proves you're being stupid.

*edit: DefinitelyMaybe will be the person who buys a house for $200,000 and goes under due to mortgage and upkeep costs. Marry rich, or never own a home.

[stigMPA]

I was offered a job at $75,000 with a bachelors. The average salary of my field PhD is around 6 figures, so yes, i do expect that.

That's fantastic for you, but the title of this thread refers to the Harvard Kennedy School. I just want to stress again for anyone not really paying attention that civil servants typically don't make anywhere near 6 figures. Even late in public-sector careers salaries are usually determined on a very rigid standardized pay scale, so the benefits of taking out a hefty loan - even for a degree from Harvard - are highly questionable. Ability to pay is a tangential concern.

But you government types found the need to say I would need to make $242,000 to pay back my debt, which is just stupid and wrong.

Any discussion on loans is very specific to one's field and the standard of living one wants to maintain while paying off the loan. Someone should have warned you that we "government types" tend to be cautious with money - it's not like we have a choice with our expected compensation. Please understand the wider context of this thread; The other posters are not "morons" - they just have very different prospects and priorities from yours.

[international]

Uh. yeah, you're a moron.

Speaking of being inept and disrespectful, I am glad you think that $72,000 salary (what I will be left with after I pay student loans, which are too high to pay back WITH INTEREST!!! RUN AWAY!) for a 26 year old single person isn't THAT bad to live off of. I know, it'll be a struggle, especially since it's about $30k higher than your salary. But yeah, I'm stupid for taking out loans.

Please refrain from posting if you're too arrogant to read something that proves you're being stupid.

*edit: DefinitelyMaybe will be the person who buys a house for $200,000 and goes under due to mortgage and upkeep costs. Marry rich, or never own a home.

I'm sorry but YOU are a disrespectful moron! i hope you take that loan and get stack in a government job (with less the 50k yearly income) and pay ALL your money for your precious Harvard!

good luck!

[liszt85]

This thread here really explains why this financial crisis really triggered off. As someone said, subpriming is a different animal but the attitudes that go into it are pretty much the same. As somebody said here, people bite off more than they can chew, be it education loans, be it housing loans, or whatever..

[vannik]

Again: someone posted $242k to pay back X debt. My point is to prove that wrong, which I did many times.

In regards to the mortgage crisis, many people have tried to spread themselves too thin and get rejected from mortgages. . . the government mandated that banks make it easier for people to apply to get a mortgage. You could get up to 70% of your income in mortgage debt two years ago. This obviously doesn't make sense, but was allowed. Read about the differences in mortgages and student loans.

Also, do you think a website can honestly give you a cookie cutter response for every situation? I knowingly took $130k in loans because I know I can pay it back with my degree. Again, my point was to correct Math123 and the other guy who said that this ammount of debt would not be able to be paid off with less than $200k/year.

That is all, account deleted. I cannot understand why this has been so confusing or why you all need to mock me for being a foreign national who is trying to make it in America. Thank you.

[teaganc]

That is all, account deleted. I cannot understand why this has been so confusing or why you all need to mock me for being a foreign national who is trying to make it in America. Thank you.

Oh noes! Don't let the drama llama get you down, little vannik. You can post in my threads and I promise to be super nice to you. At least until my sleepless delirium wears off, anyway.

[royalt3240]

I'm sorry but YOU are a disrespectful moron! i hope you take that loan and get stack in a government job (with less the 50k yearly income) and pay ALL your money for your precious Harvard!

good luck!

I hate that people apologized to Vannidiot. He's clearly a troll, and if by chance he's not, may God help him.

[royalt3240]

Oh noes! Don't let the drama llama get you down, little vannik. You can post in my threads and I promise to be super nice to you. At least until my sleepless delirium wears off, anyway.

[Jordan+AirForce1]

i'm not going to read all the posts, or defend anybody, but i just want to straighten some things out, since i believe people are misunderstanding each other here.

Here is the very basics of my understanding of what happened here.

1. Topic creator asks whether HKS is worth $130k in debt

2. Someone responded that for that much debt, you would need to make at least $242k per year, probably from some formula online

3. Vannik pointed out that it is possible to afford $130k in debt with far lower income, and that numbers are too conservative

4. Some people point out that the public service sector (assumed to be topic creator's field) has not nearly as high income as other fields, so they argue $130k debt to work in public sector is a very bad idea

So, here is the conclusion:

1. It's a bad idea financially to get $130k in loans, even if it's for HKS, if you are going to work in the public service sector after graduating.

2. You do NOT need income as high as $242k in order to afford $130k in debt. People have different priorities and different willingness to devote different % of their income towards paying off debt and still living comfortably.

I think both vannik and his critics will agree to the two conclusions above.

[DefinitelyMaybe]

That's fantastic for you, but the title of this thread refers to the Harvard Kennedy School. I just want to stress again for anyone not really paying attention that civil servants typically don't make anywhere near 6 figures. Even late in public-sector careers salaries are usually determined on a very rigid standardized pay scale, so the benefits of taking out a hefty loan - even for a degree from Harvard - are highly questionable. Ability to pay is a tangential concern.

Any discussion on loans is very specific to one's field and the standard of living one wants to maintain while paying off the loan. Someone should have warned you that we "government types" tend to be cautious with money - it's not like we have a choice with our expected compensation. Please understand the wider context of this thread; The other posters are not "morons" - they just have very different prospects and priorities from yours.

Thank you for clarifying this. Clearly in a haste to insult people, the troll seems to have missed the fact that if they aren't going to the Kennedy School of Government for their graduate education and then obtaining employment in the public sector, their opinions are completely irrelevant. Most KSG graduates won't have salaries like that for several years. Idiot. :roll:

Hopefully that troll went back under the bridge where he belongs!

[vannik]

No, I understand you will be making low income as a government person.

I am saying $242k salary to pay back $130k is grossly overestimated

Nothing to do with Harvard, just that. That is all I'm saying. The OP never specified how much he/she would make, and I saw those giant salaries being backed and people saying $200k or more for that. If the OP thinks that is true, it's not. If the OP has connections or two jobs or is marrying someone who's making more money then maybe they could pay it back if their joint income was on the order of $100,000?

Do you know if the OP is married, or if they know someone to get a nice job straight away after school?

Please stop trying to put words in my mouth, read jordan's post. You are the troll for not reading what I am saying

DONT TAKE OUT 130K IN LOANS TO GO TO HARVARD UNLESS YOU WILL MAKE ENOUGH MONEY. 50,000 = Can't afford to pay it back.

THAT LOAN CALCULATOR IS WRONG TO ASSUME YOU NEED TO MAKE 242,000 TO PAY 130k BACK IN LOANS AND LIVE COMFORTABLY.

You think I'm not agreeing with you, which is absolutely wrong. You just refuse to read the math I wrote and to understand that I'm correct for disputing the $200k/year salaries that were mentioned at the head of this thread.

End. Stop posting. We both agree that unless the OP has some way to mitigate loans (rich spouse, money in the family, ect) that it's a bad idea to do it solo. None of us know the situation, so I said what the typical income would be to pay back that amount and be comfortable.

P.S. insulting me again for you not clearly understanding the point of my posts, like jordan so CLEARLY illustrated . . . you should look in the mirror. He can understand what I'm saying, apparently you can't, or refuse to. Math is hard, I know. . .

[washdc]

This is the most ridiculous thing I have ever seen. Internet arguing is already immature, but internet arguing between people who are supposedly going on to get Master's degrees and PhD's? seriously? Is this what our country's future leaders are going to be?

I'm ashamed and I'm not even participating in this nonsense & name calling.

[rising_star]

This has gone on for far too long. Stop the insults. No more namecalling. Stop the speculation about things you aren't even making educated guesses about.

Also, if you want to know where HKS graduates are actually getting jobs, you may want to take a look at this publication: http://www.hks.harvard.edu/var/ezp_site ... s-2006.pdf . You'll note that while 60% of graduates got employment in the public or nonprofit sector, 39.5% got employment in the private sector. Who are we to declare that the OP is going to HKS to get a job in the public sector when that may not be the case?

[stigMPA]

60% of graduates got employment in the public or nonprofit sector, 39.5% got employment in the private sector. Who are we to declare that the OP is going to HKS to get a job in the public sector when that may not be the case?

"Private sector" in this context often means public sector spin-offs and related industries. Needless to say, the pay isn't going to set the world on fire.

The bottom line is that typically people don't get an MPA/MPP if they expect to make a great deal of money right away. Other degrees (JD, MBA) are much better suited for moneymaking. Any MPA/MPP would tell you that.

[MaximKat]

"Private sector" in this context often means public sector spin-offs and related industries. Needless to say, the pay isn't going to set the world on fire.

Nevertheless, according to the same publication median salary in the private sector is six figures

[stigMPA]

Nevertheless, according to the same publication median salary in the private sector is six figures

I suspect a lot of the numbers you will see were collected before the current recession. Even a year or two ago MPAs would sometimes go into the financial sector, etc. This threw off the statistics to the point where they don't mean much today.

Believe what you will, but I can tell you I have a pretty good grasp on the MPA/MPP job market. Even top programs won't send the vast majority of their graduates to six-figure jobs.

[deechi]

Going back to debt repayment for a moment, I took another look at the student loan calculator that math123 posted and see that it recommends that "your student loan payment be less than 8 percent of your gross income." That's an arbitrary and unexplained percentage, though, which doesn't take into account an individual's income and living expenses. If you can live below your means and devote a larger percentage of your income to paying student loans, then by all means do so; you'll save a large amount on interest.

And speaking of interest, limiting yourself to 8% when you can very comfortably pay more only benefits the student loan companies. A cynic may argue that it explains why the calculator, which is on a site sponsored by "student loan guaranty agencies," adopts such a one-size-fits-all approach to repaying debt. This ties in nicely with rising_star's earlier point that you can't accept advice from loan companies uncritically.

I really doubt this number is arbitrary. Actuaries get paid a lot of money to find out numbers like this and I'd bet money that their reccomendations have some pretty hefty statistical analysis behind it.

That's not to say that you couldn't theoretically live more frugally, but there's something to be said for going to harvard and then eating peanut butter and jelly sandwiches for dinner because that is all you can afford.

I'm just saying.

[deechi]

Nevertheless, according to the same publication median salary in the private sector is six figures

You may also want to look at the percentages of people going into the "Consulting private sector" which trends upward along with the stock market, topping out at about 12%. It's unreasonable to assume that the graduating class in 2009 will be going into these sectors at the same clip, with the same salary. As is, a minority of students are making 100k and the vast majority are in the 45-60k range. It's also not reasonable to assume that everyone who goes into a program is capable of getting the same job as everyone else upon graduation. Often for professional degrees (especially IR\PP) your ability to get a job is a function of your education AND experience.

If you're so sure that you can buck the trend and float to the top by virtue of your superior intelligence, prudence and work effort, then I'd say that you don't need to risk 130k on a degree from Harvard when you can reasonably do the same thing from the University of Pittsburgh.