General chatter - Question for students about loans
08-13-2010, 02:48 PM
I have a problem that I need help to decide on. I'm 28 years old and about to start back to school for my masters degree in counselor education for school counseling. I have been awarded student loans because per the gov't, I don't qualify for pell grants. I don't understand that because I don't make much money at all, and have just recently quit my part time job for school.
My dilemma is this: I have been awarded a substantial amount of money for loans, and I have to decide how much I want to accept base off what I'll need for tuition and fees. Well, my full time job gives awesome benefits and offers educational assistance by paying for 12 credit hours per calendar school year. I'm only able to handle two classes per semester, which equals to 6 hours of my 12 that work pays for. I still have to pay the fees and buy books, and whatnot.
Currently I have a good amount of bills from being on my own, and I would LOVE to get rid of this debt if I could. My question is should I accept the full loan amount and pay off some debt for less worries while in school and put the rest in savings? Or should I just accept a portion of the loan to pay down some debt and work on the rest of the bills with my paycheck.
I'd really love to pay off the credit cards and get my car fixed at the least. I'm just in a pickle because whatever amount I borrow will be added to my loans from undergrad that I'll pay back after I graduate, and this is already a big amount as is.
Any advice would be helpful. Thanks!
08-13-2010, 03:13 PM
I am in education and getting my masters in Educational Diagnostician--I took out the student loans because I'm viewing this as an investment. I'm a teacher now, but as a Diagnostician, I'll make better money and can work outside of the classroom, like you'll be able to. I would take the loans and put in a savings account for emergencies--car breaks down, you fall behind on an important bills, textbooks turn out to be way expensive. Obviously you're not going to blow it on something frivolous;)
When you start to pay off your loan, hopefully you'll have a nice chunk left.
And remember to consolidate! So important to lock in your rate now!
08-13-2010, 03:16 PM
i just finished grad school last year, and i took the whole loan. after about 2 months when i had more of a set idea about where and how to budget my money, i actually used a good amount of the loan to pay part of the loan back early because i realized it was more than i really needed. personally, i'd say go for the whole amount, especially if your car isn't exactly reliable. last thing you want is to not take the full loan, have your car break down and not have the money to fix it. then you can't get to work OR school. you can always just start paying it back early as you find you have extra cash. just be responsible with it and you'll be good.
Shannon in ATL
08-13-2010, 03:18 PM
Be careful with student loans - things are better than they used to be, but student loans have been troublesome in the past. Escalating interest, unable to bankrupt with other debt, etc. I took the larger loan and used the extra to pay off and support myself through grad school, but if I had to go back and do it again I wouldn't I don't think.
08-13-2010, 03:19 PM
Either way you're still going to have debt. It's just a matter of whether you think it's best to pay off the debt you have now by adding to your debt later. Right now I use my student loan overages to pay my rent so I don't have to work (I also have 2 kids), because I think being able to concentrate on my studies now is well worth having to pay back more money later. But, about half of my loan money comes from Pell grants and another grant, so some of this money does not have to be paid back. In the end, you really have to decide what you're most comfortable with, because you're the only one who has to deal with this. I just thought I would let you know what I'm doing, and why I came to that decision. Good luck!
08-13-2010, 03:52 PM
That's a Clark Howard or Suzy Orman question! The troublesome student loans are the private ones. Clark Howard calls them a "cancer on your life". I agree..they are nasty. ...I do hope you get some good advice!
08-13-2010, 03:59 PM
I would just rather have one big bill after graduation than several small bills while in college so that I have less to think about and can focus on my studies. I have both a subsidized and unsubsidized loan(both are Stafford loans), and I'm thinking about taking all of the subsidized and maybe just half of the other. If I find I have too much, then I can always start paying back early to keep down on the interest. What do you guys think? Is this a good option? Or should I just go big or go home, and take it all, and then pay back early if I have too much?
08-13-2010, 04:50 PM
I've been in the university system for a long time now (studying, then graduate studies, now teaching). Please take my advice and you will thank me later: NEVER take out any student loans that aren't absolutely necessary. Don't fall for it - it will only make you SO unhappy later. I, myself, have 40,000 from undergrad (I've been paid to go to school after undergrad in different graduate programs). I have friends that have 50 - 90,000 .... and it keeps rising. Do not take out loans to pay off other debts. It may *seem* like a good idea, but it is not. It will cause you SO much stress later, it is no way to start your life.
When you enter your life after grad school- you will thank me for this advice. If you take out a student loan, make sure it is the bare minimal that you need for current university bills. They will try to tell you differently in the financial aid office- but they are, many times, driven by big loaners - such as citibank and sallie mae - to say those things. And, lets be honest, the people working at universities in the student loan offices are not the type of people I want to take money advice from, they are far from being experts.
Student loans are not *so pretty and pleasant* like they describe. Don't fall for it. If possible, only accept government loans with little to no interest (check your FAFSA report).
08-13-2010, 04:56 PM
It's difficult to go to college on subsidized loans only. If you do take out the full amount, make sure you're making the interest payments each month on any unsubsidized loans you have - otherwise that interest will compound when you go into repayment.