Financial aid plans - how will you pay for your MSW?

[dlr129]

right now, my decision to take my fall 2014 MSW offer is entirely contingent on my financial plan. there's only one school I want to go to (okay, I only applied to one), and their scholarship offer was less than I hoped.

i'm going to think out loud here, and see what people think about my financial plan.

my questions: does this add up? am I relying on the right sources? am I missing anything? am I in over my head to think I can work 15 hours a week while in school? should I just take out more loans, and if so, what kind of loans and for how much?

 

here is my current cost breakdown:

 

tuition: $36,870

fees: $1,660

estimated books: $700 (school's number)

rent: $4800 (cheap city)

food, car, other costs: won't go above $5,930 (i'm a cheap date)

summer courses: ~ $7,000 (included in our curriculum)

 

total: $50,000 (x2 years = $100,000) + $7,000/summer = $107,000

 

scholarship offer: $22,500, x2 = $45,000

 

here is my plan:

 

i have to cover $52,000.

 

max Perkins loan is $8,000/year. it's the only loan I really want to take out, since interest doesn't start accruing until 10 months after graduation. i'd rather not take higher rate and immediately accruing Stafford or PLUS loans unless absolutely necessary. also, i want to limit my loans because i'm hoping school will lead me to starting my own non-profit. i don't want to depend on having to find full-time employment to pay off my loans, and i don't want to have loan debt limit my ability to borrow further.

 

my parents have agreed to cover up to $15,000 over two years, and with savings and summer work I should cover another $10,000. both of these are not guaranteed (my dad is a contractor, unpredictable annual income), and my savings include emergency money, so it's the last thing I want to spend.

 

lastly, if I worked 15 hours/week outside of school and internship at $9/hour, I could cover the rest: 15*9*90weeks = 12,150 (with wiggle room for taxes, etc, because i don't want to calculate all that right now).

 

so, $52,000 - $16,000 - $15,000 - $10,000 - $12,150 = -$1,150.

 

thoughts? experiences?

[AZgirl]

Congrats on your scholarship.

 

I just wanted to point out that if total cost is $107,000 and scholarship is $45,000, then you have to cover $62, not $52. Unless I missed something. Have you thought about part time? That's what I'm doing. It's only an extra year and it will allow you to work full time your first year.

[Lifesaver]

I got a $4,000 scholarship for the first two semesters. So that knocks my tuition down from approx. $28,000 to $20,000. I will need about $48,000 to cover tuition alone. My rent is pretty pricey and my car costs me a significant chunk of money. I will likely need an additional $25,000ish to live on for the first year. I'm hoping to spend less on rent the second year, as my program ends in December and I will likely either purchase a house or move into my boyfriend's house. So, all in all, I probably am looking at around $110,000 in loans, total. I got $20,500 in federal unsubsidized loans, which I'll max out annually, and then take the rest in Grad Plus loans. My family won't be contributing to this venture of mine, but I may end up getting some of the loan from them if they're able to get a line of credit on their house, since my parents won't charge me interest. Hah. I also plan on using the income based repayment plan and the public service loan forgiveness programs when I'm done.

 

I'm jealous of your cheap rent! Ah!

[nightwolf1129]

hello dlr129 (et al),

 

Though I'm extremely fortunate to be fully funded throughout my graduate program + a living stipend (all provided by a VA funded program), I can definitely understand how difficult of a decision it is to embark on a journey towards social work without accruing significant debt that may leave you financially crippled for many years.  Something to consider is the cost-benefit ratio.  Though there are certainly programs such as the income based repayment plan and public service loan forgiveness programs (as Lifesaver previously mentioned), many of these job positions do not pay much---because let's face it social work is not a 6 figure a year job.  I currently have $40,000 in undergraduate loans and I pay about $500 a month.  So if you're adding $80-100k on top of the average $20-30k of undergraduate student loan debt, you'll be paying roughly $1,250 a month shortly after graduation once the grace period ends.  That alone is about $15,000 a year and since most entry-level social work jobs pay around $40k or so, you'll be living off of $25,000 each year to pay for bills, rent, food, etc.  In otherwords, you'll need to consider what kind of a lifestyle you want to have upon graduation.  Many of the loan repayment programs will require you to work in that job for several years before they begin to pay back part of your loans.  This means you'll be required to pay for those student loans in the meantime.

 

I say all of this not to scare you away from pursuing your dream of social work, but to help you realize the cost of that education.  Are there any state universities/colleges in your area or elsewhere that may offer a social work program?  This may be something to consider (don't know if it's too late) but may mean that you take an additional year to save up and then reapply in the Fall.  Reason I ask is the cost of attending a state university may be much more affordable in the long run, thus helping to alleviate much of the stress that you're dealing with right now.

 

All in all, I'm glad that you're sitting down and crunching the numbers.  Sometimes it's tough to do but well worth it in the end when you start looking at the benefits & risks involved in a realistic and objective manner.

Edited April 25, 2014 by nightwolf1129

[ontheswpath]

Under the income based payment plan I don't think you'd be paying as much as $1,250 per month in loan payments. I'm pretty sure you wouldn't be paying that much of a monthly amount. I say this because I have considerably more than $40,000 in student loan debt due to my undergrad and 1st graduate degrees and under the IBR plan I pay just under $400/month and I make more than 40k a year. The payment plan is capped at a certain percentage of your income. You should play with the payment plan calculators available online because it really does depend on your amount of debt and what your income is. I almost always found that they overestimated what I actually ended up paying. **However, that being said nightwolf makes a very good point. Social worker salaries are not great, especially if you end up working for a non-profit. You'll be paying off the loans for a long time before you're eligible for forgiveness. Are you okay with that? If not, you may want to think about a less expensive institution.

 

In California, we have the title iv-e stipend (the program I'm doing at my school) and some other loan repayment programs for social workers after graduation and once you're in the workfore. They require you to work in high need locations/area or work with certain populations, doing certain work. So there are options (as long as those programs stay funded). You should check out what is available in your state of practice.

 

Again as nightwolf said, keep looking at the numbers and have an idea or plan on how you plan to pay off your loans. A realistic plan and one that you're realistically comfortable with.

[RBWilliams]

This is just what I what looking for on financial aid.  I am in same position as Nightwolf.  I decided to use VA GI Bill to fund my MSW, which is fully funded and monthly stipend.  I wasn't sure initially and still filed for FAFSA.  My school awarded me $20,500, which I really don't need and don't want to create a giant debt.  I can decline later.  I have about $2000-$3000 in loans from my first grad degree.  

 

I understand is difficult to finance grad school, but I would recommend strongly rethinking have your parents get line of credit on their home.  I would hate them to have the liability on their home, even if they are willing.  Just think over it and maybe just do the loans on your own.  This is just my two cents though.  However, I do understand cause my family didn't contribute to my bachelors or masters  first time around.

[RBWilliams]

Excuse my horrible spelling......lol.....typing too fast

[RBWilliams]

Oh, to clarify that was $20,500 in unsubsidized loans...lol, not scholarships

[dlr129]

azgirl: you're right, $62,000... I don't know what happened there with my math! so there's another $10k that i need to cover...whoops.

 

nightwolf: re: the state school. i picked my program exclusively based on its location. there are only three universities in the city with MSW programs. one is a state school, two are private. the one i want to attend is private. the other two are almost exclusively micro-focused, and i want to study economic development. that's why it's the only school i'll consider at this point. i also have no undergrad debt at all, so these would be my only loans.

 

tough decision. i have til may 21 to decide though

[nightwolf1129]

When I mentioned a monthly payment of about $1250 a month that was based on roughly $100-120k of student loan debt @ the default 10 yr payment schedule.  So though your payments may not necessarily be that high (assuming you qualified for a low income payment method), your monthly payments will definitely be a lot (or at the very least you'd be paying them for a lot longer).  As for the state university idea, I was simply trying to offer a potential solution for you to earn your MSW without accruing hellish amounts of debt and subsequently dealing with the stress that's associated (e.g. why you started this forum post in the first place).  Obviously it may not necessarily be optimal for you in your current situation since the local state university is more micro-focused; however, would you (or have you) considered an out-of-state state university?  Sure you may have to pay out-of-state tuition rates but I can certainly bet that the cost would be significantly less than attending a private school.  Yes a private school may be more appealing for a myriad of reasons (e.g., wanting to study economic development) but I'm sure that private school is not the only one in the nation (or your general region) that offers a similar program.  Yes you would be required to move (should you choose to apply somewhere else), but it may be worth it in the long-run because you're not innundated with so much debt. 

 

At the end of the day (e.g., 10-20 yrs down the road) what's worth more:  having an MSW from that private school w/ tons of debt vs. having an MSW from a more affordable alternative?  As long as you do well in your MSW program, it honestly doesn't matter much where you attend.

 

Just my $0.02