Student loan debt

[ajames]

Where do we draw the line? Most of us are taking out loans for school and to live off of to pay the Bill's. How much is reasonable? 

Gaining admission is difficult and sometimes we get wait-listed or rejected from cheaper institutions and are left with the choice to decline acceptances and try again the following year but sometimes its unrealistic. 

[Brooks]

I may be missing something, not sure why paying off debt is so burdensome. We live off of 2K now and have two children. My wife doesn’t work. Why will it be more difficult when I bring 6K a month and still live off of 2-3K? 2-3K/ month is essentially all I’ve ever known, so why not move to rural, cheap cost of living area and get rid of the debt. I’ll probably end up with 250K in debt and I’m not worried at all about paying it off in 10 years. 

[camoman1234]

13 minutes ago, Brooks said:

I may be missing something, not sure why paying off debt is so burdensome. We live off of 2K now and have two children. My wife doesn’t work. Why will it be more difficult when I bring 6K a month and still live off of 2-3K? 2-3K/ month is essentially all I’ve ever known, so why not move to rural, cheap cost of living area and get rid of the debt. I’ll probably end up with 250K in debt and I’m not worried at all about paying it off in 10 years. 

I assume you have never had debt in the past? Your debt has interest which compounds so your 250K is more like 325K after 10 years and I do not want to "live" off of 2K for 10 years. I want to have a life and enjoy what I have earned. I have told my story on here in the past and won't sit here and waste time telling you the whole story, but my wife and I have combined debt of 215K or so of student loans and they basically kill us monthly at $2,500/month plus we have 2 kids (<3 years old), we drive 12+ year old cars, live in a 150K home, I work full time my wife is an FNP works 20hrs/week, we have a mortgage (PMI on the loan also), health insurance (mine is paid 100% by employer) (my family has medishare at 370 bucks per month for a 3600 deductible), we have life insurance, home insurance, flood insurance, car insurance, trash, electric, gas bills, we do not have TV, but have internet, groceries, (we do not eat out much at all), repairs on the home, taxes for everything we own (personal property, etc), sinking funds, car replacement fund, 401K, gas, oil changes (I do them myself), shampoo, dish washing soap, toothpaste, etc., kid are in gym and swim class, day care (home one with our neighbor part time), and then you have to have emergency fund (which ours is low), our son is having surgery in 3 weeks (we have to pay the 3600 dollar deductible 1st), we own the IRS $4,000 in taxes from 2017, we paid for my wives MSN/FNP degree over 3 years, dog food, vacuum cleaner, license and title car, and the list goes on and on and on. You may think on paper it will all work out and we have a strict budget and it STILL does not work out all the time. 

P.S. You need to look at your math cause if you are going to have 250K in debt than you will be paying at least $2,500 per month and you will have 2-3K left over per month to pay for everything I listed above? You need to really re-evaluate what you are saying cause it is much harder than you think and you also will want to go on a date with your wife and go on vacation or the zoo or the circus, etc for your kids....

[Brooks]

I’m aware that debt compunds. Also, I understand and am planning on paying $2500-3000 a month. And of course I want to live the life that I earned, but given the situation you can’t. For the most part, you should be able to live off of 3K a month (obviously depends on several factors, but very doable - even with a family in the right area) as far as dates, they don’t have to cost money, can be fairly inexpensive.. go to the park throw the frisbee. I understand that it’s difficult and things change (kids get hurt, need to get another car..etc) but I think it’s definitely possible to pay such a high debt within 10 years without being overwhelmed.

[Brooks]

But, definitely appreciate your comments. I for one have not experienced that part of life yet. So I can only go off of numbers. Hope all goes well with your sons surgery. 

[Boatswain2PA]

Brooks - You're probably not wrong, but what you are missing is the emotional experience of watching so much of what you earn go toward the student loans.  You make a $6K check, $2K goes to taxes, $2K goes to student loans....you're left with a third of it!  Yeah, that's $52K a year, which is slightly above national average....but is THAT what you worked so hard in school for?

Freedom comes when, instead of paying that $2K toward student loans (plus car payments, CC payments, mortgage payments, etc), you are able to bring home $4K after taxes and spend it on whatever you WANT!  

[vb315]

20 hours ago, majetito said:

Was given Dave Ramsey's book back in 2006. Almost done with baby step 6...but because of his baby steps have saved up money for PA school. Haven't been in debt for almost 10 years and don't plan to start. 

Everyone always mentions this book, but what's the actual title? I have 100k+ in student loans (undergrad and current PA program) so I'm guessing it's a must for me at this point haha

[JD2012]

11 hours ago, cinntsp said:

I did a private refinance of all of my student loans for 8 years at 4.25% fixed and it comes out to about $1800/mo.  Sometimes I think it'd be nice to have it paid off in a couple of years, but I like traveling and other nice stuff too much.

Curious what your total balance is, if you don't mind of course.

[Boatswain2PA]

1 hour ago, vb315 said:

Everyone always mentions this book, but what's the actual title? I have 100k+ in student loans (undergrad and current PA program) so I'm guessing it's a must for me at this point haha

HIs "Total Money Makeover" is his primer, basically lays out a simple plan that works for everyone (it works because it's NOT a get-rich-quick scheme).  He calls them the "baby steps"

Step 1:  Get a $1,000 emergency savings.  This keeps you from going further into debt for things like car repairs, etc.

Step 2:  Pay off all your debt, going from smallest debt to largest debt in what he calls the "debt snowball".  Step 2 is where the pain comes in, cause you have no life while you're killing your debt.  This is for debt other than your primary mortgage.

Step 3:  Build your emergency savings to 3-6 months of expenses.

        Step 3a:  Save for downpayment for house.

Step 4:  NOW you put 15% of household income into retirement.

Step 5:  Pay into children's college fund               (Note Step 4,5, & 6 are all concurrent)

Step 6: Pay off house early.

Step 7:  Live, and give, like nobody else!

 

[camoman1234]

11 hours ago, Brooks said:

I’m aware that debt compunds. Also, I understand and am planning on paying $2500-3000 a month. And of course I want to live the life that I earned, but given the situation you can’t. For the most part, you should be able to live off of 3K a month (obviously depends on several factors, but very doable - even with a family in the right area) as far as dates, they don’t have to cost money, can be fairly inexpensive.. go to the park throw the frisbee. I understand that it’s difficult and things change (kids get hurt, need to get another car..etc) but I think it’s definitely possible to pay such a high debt within 10 years without being overwhelmed.

You keep dreaming and happy with paying that much per month and go on your free dates, but I like to go on vacation at least once every 2-3 years (which I think it not asking much). We use our points from our credit card to pay for our flights and stay in a relatives house for free and drive their cars as well when we are in FL. We live the life that you dream of, but after almost 5 years of doing this it SUCKS! You will want to go out with friends and do family things that ALL cost money. You cannot go to the park daily, it gets old, trust me. I hope the best for you, but you are in a world of hurt if you think 3K living expense per month x 10 years will make you happy. I am telling you that it won't. 

[camoman1234]

11 hours ago, Brooks said:

But, definitely appreciate your comments. I for one have not experienced that part of life yet. So I can only go off of numbers. Hope all goes well with your sons surgery. 

Thank you! That truly means a lot. 

[jeepgirl]

I recently picked up a book called "The White Coat Investor" in preparation for when I start my student loan payback. The author also runs a highly successful website with the same name.

10/10 recommend. It is good stuff. 

[BearDown]

29 minutes ago, camoman1234 said:

You keep dreaming and happy with paying that much per month and go on your free dates, but I like to go on vacation at least once every 2-3 years (which I think it not asking much). We use our points from our credit card to pay for our flights and stay in a relatives house for free and drive their cars as well when we are in FL. We live the life that you dream of, but after almost 5 years of doing this it SUCKS! You will want to go out with friends and do family things that ALL cost money. You cannot go to the park daily, it gets old, trust me. I hope the best for you, but you are in a world of hurt if you think 3K living expense per month x 10 years will make you happy. I am telling you that it won't. 

what would be your general cutoff for manageable to unmanageable student load debt....150k?

[MT2PA]

1 hour ago, BearDown said:

what would be your general cutoff for manageable to unmanageable student load debt....150k?

As someone who is right at the 150k mark, technically it's manageable but tight.  If I could do it again, I'd aim for much cheaper.    With around a 100k salary, I'd say I wish I had no more than 100k in debt to consider myself comfortable (i.e able to make extra payments, live in a way I can still enjoy life, and invest heavily in my future).

 

[camoman1234]

1 hour ago, BearDown said:

what would be your general cutoff for manageable to unmanageable student load debt....150k?

Personally 150K would be max, but I did have some loans that were a little older, but that interest was mostly just a few hundred of dollars total so it really did not amount to much. If I could tell someone today I would  have worked a little longer as an RT and pay some debt down prior to PA school. I did work as an RT x ~ 5 years, but most of my loans were pre-med classes and PA school.  

[camoman1234]

45 minutes ago, MT2PA said:

As someone who is right at the 150k mark, technically it's manageable but tight.  If I could do it again, I'd aim for much cheaper.    With around a 100k salary, I'd say I wish I had no more than 100k in debt to consider myself comfortable (i.e able to make extra payments, live in a way I can still enjoy life, and invest heavily in my future).

 

This rings very true for myself and my wife. The enjoying life and investing into my future is HUGE. We cannot even afford to put money into a 529 and not much into our 410K as well as zero into our HSA. It really sucks cause we had around 30K in savings prior to PA school and now we have < 10K. 

[ajames]

I think its essential to have these discussions that are popping up to show the realities of debt and how people are managing. It is nice that people are offering tips and suggestions for future PA students. 

Everyone has different expectations and it is good to see a variety of inputs to make an average to go off of. I appreciate everyone's contributions. 

[PACJD]

7 hours ago, BearDown said:

what would be your general cutoff for manageable to unmanageable student load debt....150k?

I would say right around 100-120k loans would be the ideal max for undergrad/PA school combined, allowing you to have some flexibility in spending and still enjoy your life. Anything more is definitely doable but a little tighter.

[PACJD]

19 hours ago, camoman1234 said:

I assume you have never had debt in the past? Your debt has interest which compounds so your 250K is more like 325K after 10 years and I do not want to "live" off of 2K for 10 years. I want to have a life and enjoy what I have earned. I have told my story on here in the past and won't sit here and waste time telling you the whole story, but my wife and I have combined debt of 215K or so of student loans and they basically kill us monthly at $2,500/month plus we have 2 kids (<3 years old), we drive 12+ year old cars, live in a 150K home, I work full time my wife is an FNP works 20hrs/week, we have a mortgage (PMI on the loan also), health insurance (mine is paid 100% by employer) (my family has medishare at 370 bucks per month for a 3600 deductible), we have life insurance, home insurance, flood insurance, car insurance, trash, electric, gas bills, we do not have TV, but have internet, groceries, (we do not eat out much at all), repairs on the home, taxes for everything we own (personal property, etc), sinking funds, car replacement fund, 401K, gas, oil changes (I do them myself), shampoo, dish washing soap, toothpaste, etc., kid are in gym and swim class, day care (home one with our neighbor part time), and then you have to have emergency fund (which ours is low), our son is having surgery in 3 weeks (we have to pay the 3600 dollar deductible 1st), we own the IRS $4,000 in taxes from 2017, we paid for my wives MSN/FNP degree over 3 years, dog food, vacuum cleaner, license and title car, and the list goes on and on and on. You may think on paper it will all work out and we have a strict budget and it STILL does not work out all the time. 

P.S. You need to look at your math cause if you are going to have 250K in debt than you will be paying at least $2,500 per month and you will have 2-3K left over per month to pay for everything I listed above? You need to really re-evaluate what you are saying cause it is much harder than you think and you also will want to go on a date with your wife and go on vacation or the zoo or the circus, etc for your kids....

Just totally out of curiosity, was PA school something that you did right after undergrad or did you wait a few years and have a different career before starting PA school? I know you probably answered this in the past and I hope you don't take offense to me asking but I'm just trying to gauge and understand your experience better and compare to mine. As I said in my previous post, when I first graduated, I did not have nearly as many expenses as you and was able to grind out loan repayments with ease and live off 1-2k per month easily. Now that I am older, living with my girlfriend, paying for basically everything you listed above (minus children), I could see how it is difficult and definitely applaud you for making it work. 

 

[ak004]

Just totally out of curiosity, was PA school something that you did right after undergrad or did you wait a few years and have a different career before starting PA school? I know you probably answered this in the past and I hope you don't take offense to me asking but I'm just trying to gauge and understand your experience better and compare to mine. As I said in my previous post, when I first graduated, I did not have nearly as many expenses as you and was able to grind out loan repayments with ease and live off 1-2k per month easily. Now that I am older, living with my girlfriend, paying for basically everything you listed above (minus children), I could see how it is difficult and definitely applaud you for making it work. 

 

I think something mentioned here is a big factor: difference in necessary expenses. This makes a big difference in how one lives and how quickly one can lay of student loan debt. Having a spouse, kids, mortgage, 2 car payments, medical insurance/bills for multiple family members, is definitely a different loan/debt situation than someone who is single, no kids, no mortgage. Not that one situation is better or worse off. Just different. And I think it plays a huge role in how you view your debt and financial situation. I know I’m probably stating the obvious with this post, but it’s just something I’ve realized while reading all these replies over the last couple months. People like me (single, no kids) are coming at this from a very different background and point of view than those with families and other responsibilities

 

 

 

[Rbnz]

Finished school with 165K (some left over from undergrad). Wife stays home with our 2 kids. Took a job in a small rural community. I have put in on average 52 hours a week and have taken about 20 days of call a month since starting for the extra income. Work, work, work is what I have done for the past 2.5 years. We are now down to about 40 K and I plan to have this paid off by the end of the year. No new cars, small vacations (nothing elaborate or expensive), rent, nothing elaborate for Christmas/birthdays, did not go out much (we got creative for date nights), etc... We also did not consolidate our loans. We started with paying off the highest interest loans and have continued to do that till now. Our monthly payments are now down to 450 a month which has allowed us to hit them even harder due to the lower interest accruing. This has not been easy!!!! But was our goal by moving to a place with no amenities, crappy schools, no parks, etc... It is totally painful to send thousands of dollars a month to the government. KEEP GOING!!! Sacrifice, work 2 jobs, move for a better job (always be looking for a better opportunity), move in with family, just do what you have to do to become financially secure and out of debt. Just my 2 cents.

[HMtoPA]

On 5/8/2018 at 12:51 PM, NJPL1213 said:

Well, no, thats not all it took to accomplish paying off my debt... Living at home definitely helped and eased the burden of paying rent and utilities, but took a lot more sacrifices than just that. Living at home caused me to be an extra hour away from my job, so the commute sucked and in turn i payed extra tolls, gas, and maintenance on my car. Despite living at home, I still paid my parents a few hundred a month, not because they asked me, but mainly because I felt bad. Yes, it did help, but it mainly took extra shifts and living conservatively for a few years to accomplish it.

And I'm sure many people have that opportunity, but do not take advantage of it. Many of my friends who took entry level jobs after graduating 4 years of college, with a little less debt than me but making a fraction of what I started out with, chose to forgo living with their parents at home in order to live together in a luxury apartment in a major city near all the night life. They barely dug into their debt. 

For those without that opportunity, take advantage of other opportunities to save for the first few years. 

Oh, come on. Yes, it sounds like you tightened the purse strings, but you didn't pay rent or a mortgage for a year, or all the associated utilities and expenses of being on your own. That's HUGE, and an opportunity that is not available to most people. You could be a little less self-congratulory about it.

[PACJD]

1 hour ago, HMtoPA said:

Oh, come on. Yes, it sounds like you tightened the purse strings, but you didn't pay rent or a mortgage for a year, or all the associated utilities and expenses of being on your own. That's HUGE, and an opportunity that is not available to most people. You could be a little less self-congratulory about it.

I could have lived with 3 friends and paid 1200/month for rent/utilities, but i decided to live at home and give my parents 600/month. Yes it helped, but I needed to save elsewhere as well. 

[camoman1234]

4 hours ago, NJPL1213 said:

Just totally out of curiosity, was PA school something that you did right after undergrad or did you wait a few years and have a different career before starting PA school? I know you probably answered this in the past and I hope you don't take offense to me asking but I'm just trying to gauge and understand your experience better and compare to mine. As I said in my previous post, when I first graduated, I did not have nearly as many expenses as you and was able to grind out loan repayments with ease and live off 1-2k per month easily. Now that I am older, living with my girlfriend, paying for basically everything you listed above (minus children), I could see how it is difficult and definitely applaud you for making it work. 

 

I worked as a RT x 5 years while putting myself through undergrad. 

[cinntsp]

On 5/9/2018 at 5:27 AM, JD2012 said:

Curious what your total balance is, if you don't mind of course.

I started with about 160k and am sitting just above 130k.  It's always nice to think about what an extra $1800/mo. could get me if I paid down my debt as fast as possible, but last year I went to Disney World, Costa Rica, and some smaller trips.  This year I've gone to Belize and have some other smaller domestic trips planned throughout the year.  Other priorities come up as well.  I finished school/fellowship with the intent of paying off my loans as fast as possible and living as if I was making minimum wage, but came to the realization that I'd rather enjoy my early and mid-30s than wait til my mid-late 30s to do so.  This is all relative to one's salary and immediate savings/retirement goals though.  Everyone has to crunch the numbers and find what works for them.