Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




turned down 130k in student loans - need some validation

Reply to topic
Money Talk > Credit & Loans

Author Thread
rationalfears
New Member


Cash: $ 1.05

Posts: 5
Joined: 08 May 2013
Location: Massachusetts
turned down 130k in student loans - need some validation  Reply with quote  

I was all set to go to grad school for occupational therapy, a career that would be secure and portable, and would yield about 60-80k a year (as low as 45k and as high as 100k possible, too, but certainly not something anyone could definitely count on).

I love OT. I was excited to get into school, especially because it was one of the cheapest programs in the country. But I already have 30k in loans from undergrad (at my state school, that I worked through and had a lot of fin aid from, welcome to 2013). The cost of living and tuition would have put me at $130,000+ with a crazy interest rate (7.5 or so, consolidated).

My family, who are not good with money, all said this would be fine. "Everyone does it now," they said. Friends of mine told me they had that much debt, and were struggling but still living life. Everyone mentioned Income based repayment, which is a great program, but feels like a gamble to me.

I am 31 years old. I grew up poor and never learned a thing about money management until relatively recently, when I realized I better teach myself. I have no retirement savings, and I want it. I don't want to be paying the interest on my snowballing debt for the next 25 years. Is that so crazy? Have I made the wrong choice not to go? I read a lot of articles from money savvy professionals suggesting alternatives that don't actually exist (one cannot get fellowships for professional masters degrees, and the program suggests I don't try to work more than 8 hrs a week).

So, I think I made the right choice, but I'm also faced with a lot of criticism from my friends and family who think I'm giving up. I would love a little validation. That's why I've joined this forum. Agree with me that I can find something better? Let me know! I could really use the support right now. I feel like I'm living in a completely insane world!
Post Wed May 08, 2013 7:27 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 382.10

Posts: 1880
Joined: 09 Feb 2009

 Reply with quote  

I think you personally dodged a bullet. I love the comment you stated "Everyone does it now". Yes, and most people are broke, I wouldn't take advice from broke people. Now, does that mean you have to give up your dream? I don't think so. Try research universities around the country and see what the cost benefit analysis would be, meaning if it takes 130k to go, but the average salary is around 80k that isn't a very effecient use of money. I work at a major university where I know how the residents and fellows do their time and the cost it takes, there are tons of scholarships and programs you can use to obtain financial support without having to take out huge loans. I would also recommend living life to it's cheapest level, meaning renting inexpensive, not having car payments and to use your stipends or salaries that you may obtain to help pay your way through college. Don't do what everyone else does, try to find a better way. Good luck!

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Wed May 08, 2013 9:07 pm
 View user's profile Send private message
rationalfears
New Member


Cash: $ 1.05

Posts: 5
Joined: 08 May 2013
Location: Massachusetts
 Reply with quote  

Thank you for responding! I am convinced there is a more cost effective way to do this. My step mother has been saying, "to have a career helping people, you simply HAVE to go into that much debt." That doesn't make sense to me. I really appreciate your support.
Post Wed May 08, 2013 10:02 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 719.80

Posts: 3501
Joined: 21 May 2006
Location: arizona
 Reply with quote  

Yeah, paying $100,000 for a degree that will only earn $60k to $80k/yr will never pay out. Eg, put your $100k in an 11%/yr Index Fund for 30 yrs and it will be $2,300,000 - and that is just one example. Your UnderGrad degree probably gets you >$50k/yr? I would take the $50k/yr plus the $2.3M.

quote:
Everyone mentioned Income based repayment, which is a great program, but feels like a gamble to me.


More than gamble, you have to earn a low salary - but the whole point of an education is to earn MORE. Ie, it would be way better to earn $120,000 and repay your loan yourself.

What field is your UnderGrad degree in?
Post Wed May 08, 2013 10:33 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 719.80

Posts: 3501
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
"to have a career helping people, you simply HAVE to go into that much debt."


It depends on how you 'help' - eg, a degree in social work typically pays near minimum wage, it is the lowest paying degree, $20k. Conversely, if you 'help' by performing research in a cancer lab, you'll probably earn >$120,000. Or a pharmacuetical lab, $120k. Or a BS RN, about $80k (my wife).
Post Wed May 08, 2013 10:40 pm
 View user's profile Send private message
rationalfears
New Member


Cash: $ 1.05

Posts: 5
Joined: 08 May 2013
Location: Massachusetts
 Reply with quote  

My undergrad degree is in neuroscience. I have a lot of incredible research experience, but am hesitant to start a phd program at my age. I would certainly love to just be a lab manager somewhere, though. And I'd be good at it. Thanks for putting it into perspective. I still have a lot to learn about what to do with my money; but it doesn't seem so hard to learn, especially with forums like this one, and at least I'm not learning it 130k in the hole.
Post Thu May 09, 2013 9:35 am
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 382.10

Posts: 1880
Joined: 09 Feb 2009

 Reply with quote  

quote:
Originally posted by rationalfears
My undergrad degree is in neuroscience. I have a lot of incredible research experience, but am hesitant to start a phd program at my age. I would certainly love to just be a lab manager somewhere, though. And I'd be good at it. Thanks for putting it into perspective. I still have a lot to learn about what to do with my money; but it doesn't seem so hard to learn, especially with forums like this one, and at least I'm not learning it 130k in the hole.



My brother in law got his first job after all of his schooling at the age of 39 as a Nuero Psychologist. It's never to late.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Thu May 09, 2013 1:27 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 719.80

Posts: 3501
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
I have a lot of incredible research experience, but am hesitant to start a phd program at my age. I would certainly love to just be a lab manager somewhere, though.


What's your current job? Does it pay well?

As for "somewhere" - ever been to Alaska? When we were there my wife was actually getting job offers during casual conversation at an airport - a big need for medical folks of all types.
Post Thu May 09, 2013 1:27 pm
 View user's profile Send private message
rationalfears
New Member


Cash: $ 1.05

Posts: 5
Joined: 08 May 2013
Location: Massachusetts
 Reply with quote  

I was working as a research assistant in a sexual differentiation lab until it moved to Atlanta last August. Since then, figuring it wouldn't be long until school started, I've been working a temp jobs for a CPA (since I have a decent amount of experience with basic tax stuff, having owned by own photography business for quite awhile) and doing some photography to fill the holes. I don't need much to survive, but I would like to do more than survive. I think my next move is to find another research position while searching for a way to fund an MSOT. Everything will be fine, I'm sure. But it has been tough to have gone from being reasonably gainfully employed with a concrete plan, to living temp job to temp job and finding myself without a next step.

Again, I really appreciate the support in my decision not to accrue unreasonable debt. It's the most helpful thing at this point.
Post Thu May 09, 2013 2:13 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 719.80

Posts: 3501
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
until it moved to Atlanta last August


Don't you like Atlanta?

quote:
I don't need much to survive, but I would like to do more than survive. I think my next move is to find another research position while searching for a way to fund an MSOT.


As for the MSOT program - don't become a perpetual student, put your current skills to work. You avoided the $130k debt, that would have cost $250,000 over the years. That would have set you up for the opposite of "do more than survive". You now know the basic cost of surviving - and if you get a better job & add $5000'yr to it you will know the way to be a millionaire. Ie, $5000/yr placed in an 11%/yr fund = a million at age 61. You can use a 401k, a Roth, a taxable account - or hopefully all three. And $5000/yr is just an example, $15,000/yr gets you $3M - and so on.

BTW, I wasn't kidding about Alaska, we've been there several times since we retired, if I was your age I would probably move there - the growth opportunities are tremendous.
Post Thu May 09, 2013 3:00 pm
 View user's profile Send private message
coaster
Senior Advisor


Cash: $ 1626.30

Posts: 7990
Joined: 11 Oct 2005
Location: Wisconsin
 Reply with quote  

quote:
Originally posted by oldguy
...the growth opportunities are tremendous.

... and winters aren't that bad in Anchorage, and the state has no state income tax. Smile

~Tim~
Post Thu May 09, 2013 4:14 pm
 View user's profile Send private message
rationalfears
New Member


Cash: $ 1.05

Posts: 5
Joined: 08 May 2013
Location: Massachusetts
 Reply with quote  

Smile I hope Alaska is paying you guys for this!
Post Thu May 09, 2013 4:15 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016