U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Personal Finance
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-05-2015, 08:58 PM
 
17 posts, read 18,422 times
Reputation: 19

Advertisements

Hi CD Forum,

New here, and would like some advice. As so many here and out there all over the country, I graduated from college (undergrad) with deep student loan debt (about $85K undergrad) and couldn't find a job that pays anything, so I decided to go to graduate school. I am still living at home with my parents, and it looks like it will stay this way for the foreseeable future. Most of my friends are all in the same boat, still living at home, in big student loan debt, and pursuing an advanced degree or another undergraduate degree. A couple of my friends have over $200K in debt already.

My questions pertains to the following. There has been quite a bit of talk of a student loan bailout plan, and that it could even come about as part of the next election. I am aware of the Public Service Loan Forgiveness Program. In fact, a couple of my professors in school were even recommending taking on as much debt as possible under this program, and then only making the minimum payments for 120 consecutive payments (10 years), and having the rest of the debt load forgiven. They said they used this exact strategy, and are on track to have roughly $200K in debt forgiven after the 10 year period. So basically make interest payments for 10 years, and then have the entire principal balance of the loan(s) amount forgiven.

Does taking this maximum amount of debt out in grad school sound like a good strategy if I can land a public service sector job after graduation? How long will this legislation be on the books? I am worried if enough people are getting these large amount forgiven left and right, that they will put an end to this program. Also, what about the possibility of a bailout program for the millions of students in debt across the country. What do you think this would look like, and for what amount?

Thanks in advance for your help and advice!!
Reply With Quote Quick reply to this message

 
Old 01-05-2015, 09:22 PM
 
Location: Southern New Hampshire
7,221 posts, read 12,658,664 times
Reputation: 21986
Quote:
Originally Posted by GraduatewithDebt View Post
Hi CD Forum,

New here, and would like some advice. As so many here and out there all over the country, I graduated from college (undergrad) with deep student loan debt (about $85K undergrad) and couldn't find a job that pays anything, so I decided to go to graduate school. I am still living at home with my parents, and it looks like it will stay this way for the foreseeable future. Most of my friends are all in the same boat, still living at home, in big student loan debt, and pursuing an advanced degree or another undergraduate degree. A couple of my friends have over $200K in debt already.

My questions pertains to the following. There has been quite a bit of talk of a student loan bailout plan, and that it could even come about as part of the next election. I am aware of the Public Service Loan Forgiveness Program. In fact, a couple of my professors in school were even recommending taking on as much debt as possible under this program, and then only making the minimum payments for 120 consecutive payments (10 years), and having the rest of the debt load forgiven. They said they used this exact strategy, and are on track to have roughly $200K in debt forgiven after the 10 year period. So basically make interest payments for 10 years, and then have the entire principal balance of the loan(s) amount forgiven.
I am highly skeptical that very many were able to do what you described. The only people who will have a significant amount of debt forgiven are those who find quite low-paying jobs after grad school, because then their payments under the "income contingent" plan will be low enough to HAVE some debt left. In addition, you would have to be able to find a qualifying public service job, otherwise all your planning to get into as much debt as possible will backfire.

I am surprised that someone who is in grad school would think it's a great idea to rack up lots and lots of debt on the POSSIBILITY that some may be forgiven at some point in the future. (And if you are in grad school, aren't you a TA or RA? What is your grad program? I went to Michigan for a Ph.D. and paid no tuition at all AND got a stipend, mostly for TA'ing. If your professors went to a decent grad school, there is no way they should have graduated with $200k in debt.)

Quote:
Originally Posted by GraduatewithDebt View Post
Does taking this maximum amount of debt out in grad school sound like a good strategy if I can land a public service sector job after graduation? How long will this legislation be on the books? I am worried if enough people are getting these large amount forgiven left and right, that they will put an end to this program. Also, what about the possibility of a bailout program for the millions of students in debt across the country. What do you think this would look like, and for what amount?
No, not a good strategy. As for how long the program will be in place, who knows? It's a GOVERNMENT PROGRAM, which means it can always change or be eliminated altogether. And bailouts? Again, who knows?

Sorry if I sound harsh -- I am just flabbergasted that you already have $85k in debt that you can't pay but somehow you think going into lots MORE debt is a good idea.
Reply With Quote Quick reply to this message
 
Old 01-05-2015, 09:24 PM
 
2,303 posts, read 2,258,556 times
Reputation: 3833
Quote:
Originally Posted by GraduatewithDebt View Post
Hi CD Forum,

New here, and would like some advice. As so many here and out there all over the country, I graduated from college (undergrad) with deep student loan debt (about $85K undergrad) and couldn't find a job that pays anything, so I decided to go to graduate school. I am still living at home with my parents, and it looks like it will stay this way for the foreseeable future. Most of my friends are all in the same boat, still living at home, in big student loan debt, and pursuing an advanced degree or another undergraduate degree. A couple of my friends have over $200K in debt already.

My questions pertains to the following. There has been quite a bit of talk of a student loan bailout plan, and that it could even come about as part of the next election. I am aware of the Public Service Loan Forgiveness Program. In fact, a couple of my professors in school were even recommending taking on as much debt as possible under this program, and then only making the minimum payments for 120 consecutive payments (10 years), and having the rest of the debt load forgiven. They said they used this exact strategy, and are on track to have roughly $200K in debt forgiven after the 10 year period. So basically make interest payments for 10 years, and then have the entire principal balance of the loan(s) amount forgiven.

Does taking this maximum amount of debt out in grad school sound like a good strategy if I can land a public service sector job after graduation? How long will this legislation be on the books? I am worried if enough people are getting these large amount forgiven left and right, that they will put an end to this program. Also, what about the possibility of a bailout program for the millions of students in debt across the country. What do you think this would look like, and for what amount?

Thanks in advance for your help and advice!!
Because there's no way of knowing the answer to the parts in blue, the idea in red is a horrible strategy. Sure, they might enact a student loan forgiveness program, but if you were to go deep in debt banking on that, you'll likely end up broke.
Reply With Quote Quick reply to this message
 
Old 01-05-2015, 09:33 PM
 
17 posts, read 18,422 times
Reputation: 19
Quote:
Originally Posted by karen_in_nh_2012 View Post
In addition, you would have to be able to find a qualifying public service job, otherwise all your planning to get into as much debt as possible will backfire.

I am surprised that someone who is in grad school would think it's a great idea to rack up lots and lots of debt on the POSSIBILITY that some may be forgiven at some point in the future. (And if you are in grad school, aren't you a TA or RA? What is your grad program? I went to Michigan for a Ph.D. and paid no tuition at all AND got a stipend, mostly for TA'ing. If your professors went to a decent grad school, there is no way they should have graduated with $200k in debt.)


No, not a good strategy. As for how long the program will be in place, who knows? It's a GOVERNMENT PROGRAM, which means it can always change or be eliminated altogether. And bailouts? Again, who knows?

Sorry if I sound harsh -- I am just flabbergasted that you already have $85k in debt that you can't pay but somehow you think going into lots MORE debt is a good idea.
Thank you for your quick reply. I definitely don't think it is necessarily a GOOD strategy, but it is kind of one of those, well, everyone else is doing it and gaming the system kind of things. I am a TA, and do go to a state school (for undergrad I went to a state school as well), but tuition keeps going up and funding keeps going down. At our legal training workshop today, the school attorney said basically keep expecting cuts because when the student loan money starts drying up, a lot of school are going out of business. So it sounds like administrators know this thing is coming to a head. I am just trying to seek out the best way to get through it all, and don't want to be eating beanies and weenies for years because of all of this mess.

I'm not sure about the professors financial situation, but I think like most students these days, a lot of debt was incurred during undergrad, and then additional loans were taken out through grad school to cover rent, books, etc. These are all younger professors by the way. Rents have gotten outrageous around here, and am very thankful I have the option to live with my parents.

I appreciate your advice. I agree that taking out more debt is not a GOOD solution, however unfortunately, many people are doing this just to try and get by for a few more years instead of having the prospects of working a minimum wage job for years. I definitely don't want to have to do it though.
Reply With Quote Quick reply to this message
 
Old 01-05-2015, 09:36 PM
 
17 posts, read 18,422 times
Reputation: 19
Quote:
Originally Posted by Jeo123 View Post
Because there's no way of knowing the answer to the parts in blue, the idea in red is a horrible strategy. Sure, they might enact a student loan forgiveness program, but if you were to go deep in debt banking on that, you'll likely end up broke.
Yes, I agree it is a big gamble. There is a link on the main economics page here for an article from US News detailing how a lot of students are rolling the dice on this same strategy. Take out as much student loan debt as possible, and then try to get it forgiven under this program. A lot of people in my graduate program are doing this too.
Reply With Quote Quick reply to this message
 
Old 01-05-2015, 09:40 PM
 
Location: Lancaster, PA
908 posts, read 930,364 times
Reputation: 448
Are you still unable to locate a job? I would try and secure a job somewhere in the US instead of more degrees and debt. It might not be your ideal job to start, but might be a path to better things at a later date. You might be waiting forever for this "forgiveness program" and meanwhile life is occurring. My 2 cents.
Reply With Quote Quick reply to this message
 
Old 01-05-2015, 09:48 PM
 
Location: My House
34,592 posts, read 28,962,017 times
Reputation: 25576
Borrowing as much as possible seems illogical. If you need to borrow, then borrow. If you don't need it, why borrow it?

You can also go into the IBR program and get loans forgiven after 20 years. Which isn't a terrible route to take if your loan debt has gotten high. I know a number of professors at private colleges going that route.
__________________
When in doubt, check it out: FAQ
Reply With Quote Quick reply to this message
 
Old 01-05-2015, 09:53 PM
 
17 posts, read 18,422 times
Reputation: 19
Quote:
Originally Posted by JT-3 View Post
Are you still unable to locate a job? I would try and secure a job somewhere in the US instead of more degrees and debt. It might not be your ideal job to start, but might be a path to better things at a later date. You might be waiting forever for this "forgiveness program" and meanwhile life is occurring. My 2 cents.
I was actively looking for jobs after undergrad with no luck. I am not currently on the job market right now because I am in grad school. I do know the small cohort of graduates in our program who finished this past December are all unemployed at this point with a graduate degree. A couple are even thinking about going to get a second Master's degree if all they can find is a minimum wage type job now, because going back for a second Master's degree means they can defer their student loans further until something better comes about. Hopefully I will not be in this situation because I do not want to be going to school for a career. My brother is 33 and still in school with over 250K in debt. He finished law school with no job prospects, and is now finishing a PhD program. He will be 35 before he starts working a real job.
Reply With Quote Quick reply to this message
 
Old 01-05-2015, 09:57 PM
 
17 posts, read 18,422 times
Reputation: 19
Quote:
Originally Posted by RedZin View Post
Borrowing as much as possible seems illogical. If you need to borrow, then borrow. If you don't need it, why borrow it?

You can also go into the IBR program and get loans forgiven after 20 years. Which isn't a terrible route to take if your loan debt has gotten high. I know a number of professors at private colleges going that route.
I have heard of the IBR plan too. I just wonder as mentioned earlier, with all of these loan forgiveness plans, when this debt starts reaching the forgiveness dates, how long these plans will actually stay on the table. Seems like a ton of debt that someone is going to have to foot the bill in a relatively short amount of time.

And I think the reason these individuals are advocating borrowing as much as possible now is because if it works out right (principal amount is forgiven after X years), it is like having a lot of "free money" in your possession because you never have to pay anywhere near the full amount back.
Reply With Quote Quick reply to this message
 
Old 01-05-2015, 10:11 PM
 
Location: Lancaster, PA
908 posts, read 930,364 times
Reputation: 448
I hear ya - but I would try and not compare yourself to your peers or brother and look at life differently. And that minimum wage job might lead to something more, as it has done for many of the founders of today's hot companies. It's about the connections, the people you meet and the money will eventually follow. I would suggest reading Inc Magazine for inspiration and ideas - stop worrying about debt and school and think about tomorrow.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Personal Finance
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top