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how much student loan debt is too much?
HalberdBlue
Registered User regular
Registered User regular
I've been planning on taking 5 years total to graduate since I want to double major, I love being an undergrad, and an extra year of research can't hurt me for grad school applications. However, I recently decided to figure out just how much that extra year would cost me, and it turns out it will cost a LOT.
Or at least I think its a lot. So I'm coming here to ask if its too much. Right now, I'm a physics major with plans to add a second major in applied math, and plans to go to grad school for a PhD in physics after I finish college. I just finished my first year of college. If I take 3 more years to graduate, after I get out of grad school I'll be looking at about $126,000 in student loan debt (assuming that all the loans I get are fixed interest and keep about the same interest rate they've had so far). If I take 4 more years, I'll be looking at about $180,000 in student loan debt. The reason for this is that my parents are only going to help pay for the first 4 years so I'd be paying for my 5th year entirely in loans. Is this far too much debt to be in? I was stupid and lazy my first year and didn't bother applying for any scholarships; I definitely plan on looking for some now. I know that a large number of physics PhDs go and do financial work on Wall Street and make piles of cash, but I'd like to avoid that if I can. What kind of salary would I need to have to make $180,000 in loan debt manageable? I'm a pretty frugal guy - I don't care about having a nice car, a nice house, or a lot of things. Eventually it would be nice to have that, though.
Damn I'd really hate to only spend a mere four years as an undergrad, though. You only live once...
EDIT: science etc. phds are usually funded so I'm assuming 0 debt for grad school.
EDIT 2: And while I'm at it, anyone know of scholarships for upper-middle class white male physics majors with a high GPA?
Or at least I think its a lot. So I'm coming here to ask if its too much. Right now, I'm a physics major with plans to add a second major in applied math, and plans to go to grad school for a PhD in physics after I finish college. I just finished my first year of college. If I take 3 more years to graduate, after I get out of grad school I'll be looking at about $126,000 in student loan debt (assuming that all the loans I get are fixed interest and keep about the same interest rate they've had so far). If I take 4 more years, I'll be looking at about $180,000 in student loan debt. The reason for this is that my parents are only going to help pay for the first 4 years so I'd be paying for my 5th year entirely in loans. Is this far too much debt to be in? I was stupid and lazy my first year and didn't bother applying for any scholarships; I definitely plan on looking for some now. I know that a large number of physics PhDs go and do financial work on Wall Street and make piles of cash, but I'd like to avoid that if I can. What kind of salary would I need to have to make $180,000 in loan debt manageable? I'm a pretty frugal guy - I don't care about having a nice car, a nice house, or a lot of things. Eventually it would be nice to have that, though.
Damn I'd really hate to only spend a mere four years as an undergrad, though. You only live once...
EDIT: science etc. phds are usually funded so I'm assuming 0 debt for grad school.
EDIT 2: And while I'm at it, anyone know of scholarships for upper-middle class white male physics majors with a high GPA?
HalberdBlue on
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1st year is different then every other year and is a fun year. The other years can be quite different. If you're majoring in physics/applied math, i expect they will be. I did Engineering Physics which is fairly similiar -- 5 year program, more math than most physics people, and enough physics to get a physics major. After 4 years I was SICK of being an undergrad and the 5th year was really awful (even if the courses were interesting).
If you're planning on doing a phd in physics, noone will care in the long run if you have a 2nd major. It may matter as you apply to get your phd, but 5 years down the line noone will care and even the extra knowledge might not help very much. However, 5 years down the line, that extra ~60,000 in debt WILL still matter.
I'll consider what you're saying on enjoying 4 years vs. 5 years though.
I am not even close to the 120-180k you were talking about, but since I am going into the Peace Corps and earning pretty much nothing, I might as well be more in debt. But like I said, so far it is worth it. I now have the options to do things I couldn't otherwise do. If you take up a second major you may find you will have extra options.
It sounds like you have the option of still being able to graduate in four years, just not with the extra major? I would say play it by ear. Get on track to have your first degree by your fourth year, and then if you feel like you can handle more school and are willing to take the extra debt, continue on for one more year.
And be warned: While in your first year of college it seems like being a student all your life would be a blast... but by the time your fifth year comes around, you are ready to be done!
Another guideline is to not take on more debt than you could plan on feasibly making in a year's salary in your career field.
That said, I'm in the same boat as you and looking to borrow alot of money for law school, and there's no real way to guarantee that I can follow those above rules. When it comes down to it, when I borrow my money (a similar amount to what you plan to), I'm going to be looking to pay over $1200 a month for the next 15-20 years. This is equivalent to owing money on a home without actually owning one.
This sort of debt will likely have serious life ramifications. You will need to make 6 digits (or damn near it) to comfortably pay it off and not live like a student for the rest of your young-adult life. Furthermore, if you meet somebody, your debt will weigh heavily on your ability to support them or potential children; in fact, you may still be paying your student loans by the time your kids hit college themselves.
Only you can answer what's most important. I know that, despite what my practical side says, I want to continue my education and that I'll do what I have to to make it work.
But there's no getting around it - school is expensive, so you better have at least some sort of plan for paying for it when the piper comes to collect.
So, honest truths: if you're going towards an academic track, I would say that once you get into grad school, your double vs single major will matter nearly nothing (knowing the math may be useful depending on your field, but having the actual degree piece of paper isn't as important). So if you really want to hang around for a 5th year that's fine, but I'd very seriously consider either a) trying to squeeze both into 4 years if you're dead set on doing both, or b) see if you can apply to grad schools in the 4th year, see where you stand, and then make a call about whether the 5th year would be helpful or not. I'll say that I was in a similar position (I think I wound up 2 classes short of a math-double major), and I basically decided even during my 4th year that it would be more useful to put more time into doing research than taking a couple more mostly unnecessary classes. At this point no-one in my lab cares that I don't have a math degree, all that matters is that I know the stuff to do analyses at a research-quality level
Other honest truths - physics PhD stipends (as far as I'm aware from a couple friends) can be VERY low depending on the place... i'm talking sub 20k (at top tier schools), so I would seriously keep in the back of your mind that it may be tough to even stay positive during grad school as well
*edit
Also - I'm not sure from your post if you love undergrad because of being an undergrad (friends/parties/etc), or if you actually are enjoying being able to learn a wide variety of stuff... if it's the second, i'd definitely keep in mind that 1) the love of classes inevitably starts weaning after a few years, and b) it'll be just as easy to take interesting classes as a masters or phd student (ok, not AS easy, but I could basically take any class I wanted for the first two years), and then you won't have to be paying tuition.
It's both of those reasons.
I appreciate the advice so far - I'd respond to it but I don't really have much to say. I have a lot of time to think about this.
Looking at this chart, $750 a month actually appears to be somewhere between low debt and medium debt for someone making $50k a year (which is a reasonable estimate for a postdoc salary 10 years from now I think).
Or am I being decieved and is $750 a month a monstrous amount of money to pay?
After taxes, expect the value to be more like $3,400 (depending on your situation).
3400 - 750 = 2650 left for house, food, utilities, other bills (car, car insurance, gas, other debts, miscellaneous spending, health/life/dental insurance, and savings)
So the question you'll need to ask yourself is:
1) How much money do I need per month for living expenses like food, housing, insurance, and utilities?
2) How much money do I need per month to pay expenses for a car? Or will I HAVE a car?
3) Do I plan on having other debts? How much?
4) Do I plan on doing miscellaneous spending? How much?
5) Do I plan on saving or investing some portion of my money? How much?
These are questions that only you can answer, and will be dependant on where you live in the country, how accessible public transit is, and many other personal and situational factors.
Just remember, you're going to have ~2600 after that mandatory deduction of debt on which to live if you're making 50k/year. Don't fall into the trap I fell into when I first started making a real salary... 50k/year sounds like a lot of money, but if you're not careful the actual amount you have to live on can end up much more limited than you'd imagine.
For instance, if it'll help I'll break down my expenses (I'm in a very similar situation, only making 48k in my case though, and I get no other benefits):
* Rent: $850/month for a 1 bedroom apartment (though it's going up to $915 next month... ouch =( )
* Student Loan Debt: $300/month (in my case)
* Other debts: $150/month
* Car Loan: $250/month
* Car Insurance: ~$100/month
* Food: $400/month (for me and my wife, I should note
* Gas: ~$160/month
* Utilities: ~$150/month (Gas, electric, internet)
* Health Insurance: ~$120/month (Just for my wife... I currently don't have any of my own)
* Misc. Spending: ~$80/month (40 for me and my wife at the start of the month)
Total: ~$2600, before any unexpected bills/situations (which ALWAYS come up, don't be fooled... especially if you're married!
In practice, living with my wife and in this job for the past two years since graduation I've found that most of the time incidentals have burned up the remaining ~400$ of our monthly money (something breaks, someone needs some gift for some holiday, some unexpected trip/visit has to occur, etc...), but this may vary widely due to personal living situations and luck.
Anyways, hopefully this helps you to think about what expenses you might have in real life, and do your best to itemize and predict as best you can. It's worth attempting to make some estimations early, and make sure you won't get caught with your pants down.
For example, if I had pre-analyzed, I'd have gotten a used car instead of a new one (my car I got new and started paying $338/month for it because I thought $48k/year was more than I'd ever need... when I realized it was stretching me thin, I refinanced it down to $250/month, but it was still a wasteful expenditure), fought harder for health insurance to be provided by my company (which I am now doing, but I'm in a bad position to do so because I didn't raise hell when they didn't give it to me right away), and tightly controlled miscellaneous spending (I did foolish things like buy my wife a new computer and such soon after I graduated... again, under the untrue/naive assumption that $48k/year was more money than I could use in a year
Now, my loans aren't half of what yours will be... or a third, for that matter. That just means you'll have to examine and itemize carefully. Take a look at what money you'll really be making, what living expenses will really be like and so on. We, unfortunately, can't do that level of investigation for you... but you can do it for yourself knowing where you'll want to live and what you'll want to do. It would behoove you to do so and not make the mistakes that I did.
Anyways, hopefully that helps, from someone who was in a similar position.
EDIT: Oh, one more thing before I (finally
That's not much.
Well, a typical physicist makes enough money that that much debt isn't a huge problem... However, postdoctoral positions are poorly paid in comparison. However, you did prompt me to go look up how much postdoctoral fellows are typically paid, and it looks like government postdoc positions pay much better than academia postdoc positions. $50k is about right for academia, but it looks like government pays closer to $70k-$80k, and I'm looking at 10 years in the future so those figures will almost certainly be higher by then. Of course, I could also skip the whole postdoctoral headache and go and work in industry, which pays more than govt. or academia and usually doesn't require a previous postdoc position. However, I'd have to be in a field that actually has industrial applications. Right now my two biggest interests are plasma and high energy, and while plasma has numerous industrial applications, high energy has almost none (if any).
But this research has convinced me that I should be able to afford the additional debt from a fifth year if I choose to take it. Worst-case scenario is that if I do a postdoc I'll probably be limited to government positions, which isn't a bad thing. Now the question just remains if I want it, which I have plenty of time to decide of course.
I think this thread is mostly solved.
Yeah, I'm expecting the life of a grad student to be rather frugal. I get by on more like $40 a month of disposable income right now though, and while it would be nice to have a little more money, I get by.
I think it'll be worth it for you to do the 5th year if it makes a significant difference... so as long as you know you can secure the funds afterwords to support it, go for it!
You also want to consider that on an standard biweekly pay schedule, you'll be getting well under this 10 months out of the year and over it two months out of the year (3 pay months, or: Shiny Toy Months)
I make 55k a year, and after taxes and benefit premiums on a normal month, I come out with around $2,860. On Shiny Toy Months I come out with $4,290.
The point being, you need to live the majority on the year on less than income/12, so I find that it's better to base your living situation off of the small figure.
Witness the glory of having rich parents who don't want to pay for your college who live in a state with no good schools, I suppose.
As a fellow Yellow Jacket, I'm a little confused where you're getting these numbers from. According to the registrar's web page, even if you're maxing out your loans you're still only looking at $140k for four years (and that includes housing, meal plan, books, etc.).
As for applying for scholarships, Tech has an excellent scholarship program. You only have to send them your FAFSA and fill out the right form on this web page: https://gtwebapps.gatech.edu/cfprod/gtapp/ and they'll try and find scholarships for you. That's all it takes! The financial aid counselors are also really knowledgeable and can help you out if you have more questions.
Personally, I recently opted out of getting my MS at Tech because of the money. I just wasn't prepared to take on $30k in student loans. I'm getting married next year, so I didn't want to be paying off that much money when I'm trying to start a family, buy a house, etc. You might be able to pay off your loans and live comfortably for however long it takes, but keep in mind that your situation will change. You don't want to woo your future wife by serving her raman every night. :P
It might help you get into grad school, but not as much as focusing on getting a good GPA/GRE score will help you.
It comes down to this: Are you willing to spend what is easily the price of a luxury automobile or a downpayment on a house in order to have one more year of undergraduate education?
Either way, my advice is that you need to structure your classes so that you can hit eject on the 5th year at any point. This means doing all of your first-major classes up front so that if a major life event happens and you decide you need to graduate after 4 you can do so.
And Manda, the numbers are so high because I'm including interest (which includes 6 years of interest from time in grad school).