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[hip2btriangle]

So I currently live in NYC, and as a result I think a lot about money and managing my finances efficiently. Right now I'm working full time AND paying for my MA program, which has been really challenging but I've been able to make ends meet -- even with the high cost of living.

I'm trying to conceptualize what my "income" will be like per month as a new PhD student next year. Say I have a $17,000 stipend and a tuition waiver. I KNOW that doesn't break down to a little over $1,400 / month to pay for housing, food, and anything else. There must be other costs (health insurance? fees? books?) to work into this equation. And although I thought studying anywhere but in NYC would be easier as far as paying for housing, I noticed that even cities like Boston are just as expensive -- one school listed student housing at like $14k+/year.

Are there any helpful guides that break down how much students will generally be working with per month given X waiver? Assuming I have no other sources of income or savings, should I be ready to take out loans...even if awarded a generous stipend? Any thoughts or relevant links people might feel comfortable sharing? I know each school publishes a very vague breakdown of expenses, but these numbers don't always apply to people with stipend packages.

Word,

-h2bt

Edited October 20, 2009 by hip2btriangle

[kahlan_amnell]

So I currently live in NYC, and as a result I think a lot about money and managing my finances efficiently. Right now I'm working full time AND paying for my MA program, which has been really challenging but I've been able to make ends meet -- even with the high cost of living.

I'm trying to conceptualize what my "income" will be like per month as a new PhD student next year. Say I have a $17,000 stipend and a tuition waiver. I KNOW that doesn't break down to a little over $1,400 / month to pay for housing, food, and anything else. There must be other costs (health insurance? fees? books?) to work into this equation. And although I thought studying anywhere but in NYC would be easier as far as paying for housing, I noticed that even cities like Boston are just as expensive -- one school listed student housing at like $14k+/year.

Are there any helpful guides that break down how much students will generally be working with per month given X waiver? Assuming I have no other sources of income or savings, should I be ready to take out loans...even if awarded a generous stipend? Any thoughts or relevant links people might feel comfortable sharing? I know each school publishes a very vague breakdown of expenses, but these numbers don't always apply to people with stipend packages.

Word,

-h2bt

Many graduate schools will pay for your health insureance, particularly if you are a TA or RA. You may need to pay some fees, mine are around $900 per semester. Books can be quite expensive, I spent a lot on mine, but I'm in the Humanities and like buying new books.

I get paid around $1,500 a month. This is in a small town, not a big city.

[pea-jay]

When my wife was working on her teaching credential full time, she got a decent amount covered in grants. Because we still had significant expenses (daycare) we used student loans to bridge that gap. In fact a majority of the loaned amount went to non-school expenses. A stint at Starbucks covered the rest.

[kdilks]

Your stipend isn't necessarily going to be paid out over the entire year. I think for many sources of funding, you get your stipend over the ~9 months of the academic year, and can potentially make more money over the summer. I know that's how most teaching assignments are, and that's how one of my two fellowships works. Depending on your situation, that extra money over the summer might be the difference between whether or not you earn enough money to get by. At one school I visited, I was told that summer teaching positions were very competitive since the base amount of money they offer isn't quite enough to live off of, and you weren't able to get said teaching position during your first summer. So that's something to look out for/ask about. Also keep in mind that you're not limited to what your school offers. For example, I could make more money by doing 2 months of research "for free" or taking a part-time job and spending 1 month at my old summer job than I would by doing 2 months of paid research through my university (since the paid research requires I take no other job over the summer).

Also, be wary of initial costs. Even if you make good money, your first paycheck won't necessarily be able to cover movings costs, cost of outfitting your new place, student fees, books, and first months rent (and if you're like me, season tickets for hockey and football...). One school I got accepted to actually gave you a decent chunk of money as soon as you arrived to help "defray" some of those costs. Hopefully somebody with more experience can chime in, but I see that as being a more likely reason to need loans than monthly expenditures (assuming you don't have something like a family which would make your monthly expenditures significantly higher than your prototypical single unattached grad student). I think pretty much anywhere you go, you'll at least make enough money to get by sharing a crappy apartment and eating Ramen.

[acup313]

Here is the advice I have always received. Regardless of whether you need it or not, take out as much as they let you in Student Loans that you can get the interest subsidized (meaning interest does not accrue until 6 months after you graduate and you also don't make payments until then). You should definitely try not using the money if you can help it, but if you at least stick it in a Savings account you can make some interest on it. Also, in case of an emergency you have the money there to fall back on. Once you graduate hopefully you will have spent very little of it and you can pay most of it back without paying interest and you will have a little extra from the interest earned. The purpose of the student loans is to help you go to school, so you probably shouldn't take it and put it all in high risk investments and the like, but an easily accessed account like a Savings account should be ok.

[newage2012]

Here is the advice I have always received. Regardless of whether you need it or not, take out as much as they let you in Student Loans that you can get the interest subsidized (meaning interest does not accrue until 6 months after you graduate and you also don't make payments until then). You should definitely try not using the money if you can help it, but if you at least stick it in a Savings account you can make some interest on it. Also, in case of an emergency you have the money there to fall back on. Once you graduate hopefully you will have spent very little of it and you can pay most of it back without paying interest and you will have a little extra from the interest earned. The purpose of the student loans is to help you go to school, so you probably shouldn't take it and put it all in high risk investments and the like, but an easily accessed account like a Savings account should be ok.

Or better yet put into an IRA account, you can write that off on next year tax returns.

Or use the money to pay off high interest credit card debt from your undergrad years.

[kahlan_amnell]

Here is the advice I have always received. Regardless of whether you need it or not, take out as much as they let you in Student Loans that you can get the interest subsidized (meaning interest does not accrue until 6 months after you graduate and you also don't make payments until then). You should definitely try not using the money if you can help it, but if you at least stick it in a Savings account you can make some interest on it. Also, in case of an emergency you have the money there to fall back on. Once you graduate hopefully you will have spent very little of it and you can pay most of it back without paying interest and you will have a little extra from the interest earned. The purpose of the student loans is to help you go to school, so you probably shouldn't take it and put it all in high risk investments and the like, but an easily accessed account like a Savings account should be ok.

Why would you take out student loans that you don't need? The amount you make in interest is not enough to justify the risk of taking out a loan.

As for emergencies, most universities can provide small loans for emergency situations. Also, credit cards can help you deal with emergencies, though you will owe interest if you don't pay them off right away. However, there are special credit accounts for some types of emergencies, like Care Credit for medical care (or veterinary care for pets).

[zilch]

What are the risks that you're referring to?

[kahlan_amnell]

What are the risks that you're referring to?

Not being able to pay them off immediately and having to pay interest? Having the interest rate go up? Messing up your credit if you don't pay on time?

The way I think about it, loans are something you take only when you need them. I don't understand why anyone would saddle themselves with debt if they had enough money from their stipend to make it through grad school without student loans.

Edited October 24, 2009 by kahlan_amnell

[zilch]

Not being able to pay them off immediately and having to pay interest? Having the interest rate go up? Messing up your credit if you don't pay on time?

The way I think about it, loans are something you take only when you need them. I don't understand why anyone would saddle themselves with debt if they had enough money from their stipend to make it through grad school without student loans.

I believe acup was talking about the subsidized loans that do not have interest while you are in school. Money is a commodity, and since we live in inflationary times it's always advantageous to take government subsidized loans, even if you just return it immediately.

[kahlan_amnell]

I believe acup was talking about the subsidized loans that do not have interest while you are in school. Money is a commodity, and since we live in inflationary times it's always advantageous to take government subsidized loans, even if you just return it immediately.

Indeed, but they start having interest 6 months after you graduate. With the academic job market being what it is, I wouldn't want to have to worry about making loan payments when I will very likely still be looking for a job. Unless you have a very high interest savings account, I don't see the point of taking out a loan and just letting the money sit in savings. The interest rates these days would not make it at all worthwhile.

Perhaps I am old fashioned, or conservative about how I use money, but I would never take out a loan that I didn't need.

Also, the general advice I've heard is not to take out loans for a Humanities Ph.D.

Edited October 25, 2009 by kahlan_amnell

[coyabean]

I just want to second some of the other advice. I'm actually considering cost of living into my school selections. I also plan to take out the allowable sub amount. Not to knock the more conservative approach listed here, but the risks some are naming aren't risks unless you blow the money or had to spend it on an emergency. If the former then you were gonna be screwed any way. If its the latter better to have the money at hand then trying to scramble for it when you need it. That money is some of the cheapest and easiest you can borrow. I'd rather have a 20k balance in subsidized government loans that cannot exceed 7% in simple interest when I'm done than to have credit card bills with upwards of 18% interest rates and no negotiable repayment plans.

Edited October 26, 2009 by coyabean

[rising_star]

I wouldn't worry too much about cost-of-living as stated by calculators. A better thing to do would be to talk to some current grad students and ask if they are able to live ok/comfortably on their stipend and what they do if not. (Oh, and ask more than one person since people often have widely different lifestyles...)

As for loans, there are lots of reasons for taking out subsidized loans. Several people I know used them to purchase a vehicle after moving to a place where not having a car was basically impossible. Others use them to pay off credit card debt, greatly lowering their monthly payments. I don't see what's wrong with taking out some or all of the subsidized amount to ensure you can live comfortably (ie, eat healthy food, sleep on a comfortable mattress, see doctors/dentists when you need to, etc.).

[acup313]

Yes there really is no risk to not being able to pay it back if you never spend any of it. You mention getting the emergency loans or quick credit cards in case of an emergency, but I see these as way more of a risk than a subsidized student loan. Most of those will start to charge interst fairly quickly, so you might as well use your student loans to pay for these emergency situations since you won't be charged interest for a while. Also, the fact that it starts charging interest after 6 months shouldn't be a problem if you can just pay it all back anyway. If it truly is a loan that you don't need then all of the money should still be there after your time in school. I know that the interest rates aren't very good right now, but just based on what they are and the amount I could possibly get I am pretty sure I would get about $2,000 in interest through my time at school, which isn't bad. After saying all of that though, I do agree that some people shouldn't take out loans if they don't need them. Some people just think hey I have this money I might as well spend it. My strategy is definitely for people who want a safety net, but won't spend money unless they have to.

[kahlan_amnell]

I just don't see emergency situations happening where I wouldn't be able to pay for them one way or another within the time that a credit card bill was due. I have medical insurance, so I'm unlikely to be hit with huge medical bills I can't pay. I don't have a car, so I don't have to worry about emergency car repairs. I don't own a house, so I don't have to worry about home repair bills. Emergency vet bills if my cats got sick are about the worst expense I could be hit with, and I know that I could get help with those bills if I couldn't afford them.

I don't find $2,000 over the course of my graduate career to be worth the worry of having loans hanging over my head. I'm not the sort of person who would spend the money, I just really dislike being in debt.

Therefore, loans aren't for me.

Edited October 26, 2009 by kahlan_amnell

[newage2012]

I have medical insurance, so I'm unlikely to be hit with huge medical bills I can't pay. I don't have a car, so I don't have to worry about emergency car repairs.

Watch when your insurance company denies your claim because you have secret "pre-condition" that you never even know about. Private insurance companies are there to make profit, not to save your ass.

Wait until the ObamaCare comes along, then we can talk about REAL medical insurance.

Therefore, loans aren't for me.

And you miss a chance to start early on your credit history, a mistakes that can cost hundreds of thousands of dollars later in mortgage interest because you have short credit history.

Unless you are not even thinking about buying a house.

[kahlan_amnell]

Watch when your insurance company denies your claim because you have secret "pre-condition" that you never even know about. Private insurance companies are there to make profit, not to save your ass.

Wait until the ObamaCare comes along, then we can talk about REAL medical insurance.

And you miss a chance to start early on your credit history, a mistakes that can cost hundreds of thousands of dollars later in mortgage interest because you have short credit history.

Unless you are not even thinking about buying a house.

If my insurance denied me I would not need to resort to loans, I know that there people close to me who would be able to help me with medical bills. I am aware that insurance is flawed, but it has mostly worked for me. I'd like to see better health care in this country, and I support a public option.

Taking out loans is not the only way to start on your credit history. I have credit cards, which I pay on time and in full. That builds my credit history. I have taken out some sort of loans in the form of credit accounts for a specific purchase that had no interest if I paid the balance by a certain time. Those built my credit history. Even paying my utility bills on time builds my credit history. So, I would hardly say that six years of so of this would be a "short credit history", and my credit history will be longer by the time I get around to thinking about buying a house.

Anyway, this thread is getting seriously off topic. Shall we stop discussing the pros and cons of loans?

Edited October 28, 2009 by kahlan_amnell