$230,000 in undergrad debt!!!

[tang116]

Hi everyone,

I am starting grad school this fall and knowing that I already have a huge burden of 230,000 undergrad loans in debt. And now I even took out more for graduate school. Is anyone out there has this much loan want to share their experience? How do you manage to pay back? To live, to have a social life...I think about this huge debt everyday of my life. I don't know if I ever be able to buy a house and live comfortably. I just hope I can get some feedback here. Thanks so much!

[kahlan_amnell]

Wow, that is a lot!

Is this a MA program you are starting or a Ph.D.? Do you have any funding? What field are you in?

[frankdux]

Are you sure you didn't mean to type $23,000?

I didn't even know that amount of debt or loans was possible to obtain from an undergraduate degree! There's gotta be a story behind that. Maybe some doctors have a similar amount of debt after med school, but just for undergrad? That's really too much.

1. With that much debt I wouldn't do a graduate degree unless it was fully funded.

2. You really need to investigate what your career options will be after obtaining this degree and how much money you can realistically expect to make. You've sunk yourself into a pretty big hole already.

[jlee306]

[fuzzylogician]

Wow.

With that amount of debt I wouldn't even dream of going to grad school. Let alone to an unfunded program. I'd get a job and start paying off my debt.

[jasper.milvain]

1. With that much debt I wouldn't do a graduate degree unless it was fully funded.

With that much debt I wouldn't even do a funded grad degree. I'd get the highest paying job I could, then I would get a second. After moving back in with my parents and selling my car, of course. That's an insane number. Possibly a troll? There must be a crazy story if this is legit.

[edsocguy14]

He said he was going into education for grad school .... shakes head ... I think this is a joke

[tang116]

Yes, its 230,000...I took out both private and federal loans. I know I made a big mistake. I went out of state for school and cost of living and tuition was really expensive. So I ended up taking out way too much loans. And I am going for my Master's in Higher Education Administration.

[edsocguy14]

wow! Do you have graduate funding for the Masters? Further, if "we" might inquire .... where are you going for graduate school

[Demetrios2011]

Tang116: What you really, really need to do right now is step back from your situation and evaluate it as objectively as possible. How much can you reasonably expect to earn when you graduate? How much of that salary do you think you will be able to devote to loan payments? I will tell you right now that going to graduate school when you already have that type of debt is not a smart financial move. Sometimes people think that because they already have a lot of debt, a little (or a lot) more will not matter. The exact opposite is true. Basically, you need to consider marginal cost (the cost of taking on every additional dollar of debt, as opposed to your overall debt load,) and the marginal cost for taking out more loans is much, much higher when you already have substantial debt. There are many financial aid calculators online, and with your level of undergrad debt (let alone whatever you take out for graduate school) you are looking at a minimum payment of $2,646.85 per month on your loans with a period of 10 years. Keep in mind that because you have private loans, this number will probably be much higher, you will need to do the math yourself. Then add in whatever you are borrowing for graduate school. According to finaid.org you would need a salary of about $317,000 per year to afford those payments, without even considering your graduate debt. You will not make that much money fresh out of grad school, and odds are you will never make that much money. In order to pay back even your undergrad loans you will need to lengthen the payment period to much more than 10 years. In short, you will be in debt the rest of your life. None of this means that you cannot enjoy life and have a rewarding career, but right this minute you need to step back and consider your options. Most likely this will mean taking the highest paying job you can get, right now, and dropping out of grad school.

[tang116]

Thanks so much for your advice Demetrios2011.

I had an undergrad degree in Sociology, which means I can't really get good paying jobs. Right now I am working as a social worker with salary of $24,000 a year and my loans are currently in grace period. But I am planning on deferring it until I finished grad school. I already expected to pay back those loans off for the rest of my life..I have no choice. Looks like I am really out of luck and had made really bad decision in my life. And with the current job market it will be hard to find a good paying job with a degree in sociology.

[wishingforPHD]

Thanks so much for your advice Demetrios2011.

I had an undergrad degree in Sociology, which means I can't really get good paying jobs. Right now I am working as a social worker with salary of $24,000 a year and my loans are currently in grace period. But I am planning on deferring it until I finished grad school. I already expected to pay back those loans off for the rest of my life..I have no choice. Looks like I am really out of luck and had made really bad decision in my life. And with the current job market it will be hard to find a good paying job with a degree in sociology.

Hi Tang116,

I just wanted to add that with a degree in sociology you can make more than 24k a year. not MUCH more of course, but that is a really low salary. I am not sure about social work, but you could do something similar (career coach, program coordinator, etc.) and make between 32-38 for sure. You just need to get into a mid-size or large non-profit. This is where all of my working experience is, and its hard to find good people with a degree and experience to do direct service. Its not a good market I know, but I would start applying.

[viavoice]

I thought at first that this had to be a typo, but after reading through it, I see that it's not.

I have a similar undergrad degree, but with some persistence and the assistance of placement agencies, it wasn't hard to find job offers in the $40,000 - $50,000 range. That was before the economy really took the big plunge, but I still think that $24k a year is no way to pay back such an immense UG debt. I think it would be wise to take out no further loans - don't go unless you are fully funded.

[cogneuroforfun]

Can't the OP keep deferring the loans while they're still in school, even if its for an unfunded MA program? I don't know how much tuition and everything will cost for the MA, but if you can keep working on the side and keep paying down your loans without borrowing too much more, it might be worth it. I think it would have to be a pretty strange situation, like a $5,000 a year MA and a job making $30,000 or so, but it could be worth it. It might be a good way to get some of the loan paid down before the interest kicks in.

Of course, if the MA is any kind of significant money, you'll just be digging a deeper hole. I think this might be a good time to speak with a real personal finances expert, rather than a message board full of grad students.

[belowthree]

I think the advice to slow down and consider how much debt the OP has is misplaced.

That was advice that needed to happen 5 years ago. Now the OP is stuck and needs to make a rational decision. If the OP can double his or her earning power (High Ed Administration can be around 6 digits eventually) without doubling his or her debt load (it would be hard to do at this point really...) then it turns out to be a win.

Since the OP is already so deep in debt, even if the OP could only gain an extra 20% in salary, that means it's reasonable for the OP to take on up to 46k of additional debt.

I think in this case if the OP can do the masters in a year and can reasonably expect their salary expectations to go up by more than 20%, it's a win.

(I am not a financial advisor. It sounds like you could use one. Go see one.)

[mlle]

I'm very naive when it comes to money, but my initial thought upon reading the OP is that they'll need to declare bankruptcy at one point in the near or distant future. Paying back $230,000 plus interest just doesn't sound like a feasible thing for anyone to do during their lifetime. Can't the OP declare bankruptcy for this sort of thing? It seems like they have no choice. Again, I'm embarrassingly naive when it comes to money, but bankruptcy seems unavoidable for that much debt.

EDIT: okay, I got curious after looking at this thread and looked up bankruptcy and apparently you can't declare bankruptcy for student loans, which I'm sure everyone else besides me already knew. But what about the private loans? Can the OP do something about those?

[michigan girl]

If the OP has federal loans, he could petition the federal govt to forgive him. His options are very limited for private loans.

Petition the federal govt to allow bankruptcy on student loans.

[lotf629]

I really really don't think you should go back to school...really really really.

You may have to declare bankruptcy, but you will have to be smart about it. Student loans aren't usually included in bankruptcy filings: you have to prove that a) your payments threaten your ability to make payments for basic cost-of-living type expenses and you have made a good faith effort to keep up with your payments. In your case, however, you might be able to meet both criteria. You will want a shrewd lawyer, however.

See http://www.studentloanborrowerassistanc ... ankruptcy/ , or do some googling on your own.

How much are your monthly payments now? How much will they increase after you go back to school?

More debt is not your answer. Please, please think hard about this before you dive back in.

[meadows309]

EVERYONE going into education should know about this ...http://www.ibrinfo.org/ It's called Income Based Repayment and it is help for folks with public loan debt, especially folks going into the public sector: govt, education, non-profits, etc.

Also, stop freaking the poor guy out. He isn't going to die or starve or anything. (From someone with 90K in undergrad debt). This situation depends highly on the percentage of your debt that is truly private. The public debt can be paid back in 10 years if you go into higher ed after you graduate.

[juilletmercredi]

The thing is, she wouldn't really need a salary of $300,000 to pay off those loans. That's $25,000 a month, and I'm sure that the OP doesn't need $22,000 a month to live comfortably (25K - 3K = 22K).

Depending on where she lives, she could probably rather comfortably pay $2600 a month on $80K, give or take. That's more like $6600 a month - that'd leave her with $4000 a month to live on, which would be okay in some places if she's supporting only herself. I live off $2000 a month in NYC so even a salary of $65K might be okay - a bit of a struggle with not much room for extras, but still doable.

rising_star pointed out to me once that Finaid.org uses an algorithm that makes mathematical sense but not necessarily practical sense. The income they tell you you need to make is always around the same price as the loan + interest. When really, no one NEEDS to make $317,000 a year unless their loans are like $20,000 a month.

But that's still a crushing amount of debt for a long time. Those kinds of loans would completely eat up a salary of $35,000.

Like meadows said, I don't think it's something that you should freak out about. Actually, the average salary in higher education administration should be able to pay those loans somewhat comfortably (if you were able to get a job paying you $70K-80K or more per year, assuming that you really would pay about $2600 a month). It may make sense for you to take on more debt in an effort to pay your loans if you can't get a job with your bachelor's degree that will give you enough to pay them.

Also, before you enter grad school check with your private lender on deferment policies. A lot of people assume that all private lenders allow you to defer while you're in school, but an acquaintance recently discovered that there's a cap on how many years she's allowed to defer her loans from her private lender regardless of whether she's in school or not, and her in-school period during *undergrad* counted towards that limit! So she's nearing it. Make sure you get the full story from your lenders before you decide anything.

Meadows, likely the vast majority of that is private. The caps on undergraduate Stafford loans if one is a dependent student are somewhere around $30,000, and that's really only possible if you spend more than 4 years in college. If he took the typical 4 years then likely the public amount is somewhere around $20,000, which means the other 90% of the amount is likely all private loans.

[pea-jay]

How about doing programs that can whack a percentage of your debt if you agree to go serve the underserved. I left my under grad with less than $8K in debt (also not a typo) and volunteered in an inner-city Chicago school for a year as part of Americorp. That whacked 20% off my loan and got me additional funds that could be used to pay additional debt or put towards grad school.

[mnboy]

Public service loan forgiveness exists, especially if you're going into education. If you are considering a career in public service you can have the remaining balance on your loans forgiven after 10 years if you make your payments on time. This applies to federal direct loans only, however. Teaching forgiveness programs are available in a lot of states so look into those options.

You should not consider filing for bankruptcy because generally speaking, it is almost impossible to get your student loans discharged unless they are severely impacting your ability to live - and not in the sense that you lack a social life, but as in you are struggling to pay for food because of your student loan burden.

Your debt can be tailored to your income. Your payments are going to be high anyway, so you may as well get continued education that can boost your earning potential.

[HelloFeminists]

In general, I tend to agree with the few people who have said something else besides "DROP OUT OF SCHOOL NOW!!" It's really hard to get much work in this economy with just a B.A. in the social sciences, so with your type of debt, it seems that a grad degree would be a lot more helpful in the long run. But yes, please do try to get something funded [as if that's not what we all hope for!]. Good luck to you.

[Roll Right]

Heres what I think:

1. Social science degrees are not monetarily worth it at the graduate level if youre not funded. I wasnt funded this year, so Ill be $50,000 in debt for student loans (including my undergrad). But I never do anything just for the money. If its TRULY what youre passionate about, by all means go for the higher degree.

2. That debt is gunna capitalize, and turn into $500,000 real quick even if you defer. Especially the private loans. Youll have to work while you go to grad school.

3. At this point, who the hell cares? Youre so far into debt you might as well get a higher degree. I dont know anyone who is debt free after college. Do what you want and dont let imaginary numbers determine how you live your life.

[belevitt1]

If I were you, I wouldn't dream of stopping my education with 230K in student debt and attempt to make it on the kinds of salaries an entry level job with a bachelors degree will get you. Unless you have some sort of crazy ambition or expect to have an extraordinarily high income, you will pay what you can on your loans when you are done. There are any number of extended payment plans to accommodate people with tons of debt. Don't worry, you aren't the only person with that kind of debt, my wife regularly advised students with that level (at a proprietary art and design school). I had a close friend who went to a private university and incurred around that level of debt as well, he lives a normal life and moved to a high cost of living area to work a dream job.