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Without student loans I would’ve never graduated from a top US university (top 3). Then, I would’ve never gotten into a top graduate program. I became a Chief Officer at 36 years old and making more money than my anyone in my entire family or group of friends can imagine.
Student loans ARE your friends.
I fall in the same category!
They’re awful. If you consider that the national average income is about $59k, and the average student loan debt is $40k, that should tell you how people are living. And, if they’re federal loans, you’ll likely have an interest rate of about 5% (which is higher than a lot of peoples’ mortgage interest). But, if they are private loans, your interest rate could be astronomical. And, to put it in perspective:
On $40k loans (federal not private)
Payment every month ≈ $450
Time to pay it off ≈ 10 years
But, considering salaries are only $59k a year with the average apartment costing $2k a month:
Gross Pay $59,000.00
Federal Income Tax. $3,834.38
Social Security Tax $3,658.00
Medicare Tax $855.50
State Income Tax. $6,490.00
City Income Tax $0.00
Deductions withheld $6,000.00
Final Pay Check $38,162.12
So, you’ll only take home $38k while having to pay $24k a year in rent for a basic apartment. Then, add on the $5400 per year you have to pay in student loans.
So, before the cost of food, transportation, enjoying life, clothing, cosmetics, savings, healthcare, dental, or anything else, you’re left with about $8k after tax, student loans, and housing.
With all of this, it shows that student loans themselves aren’t the issue, but our country taxing us at such a high rate and then not providing any type of economic safety net is the real issue. We shouldn’t be spending so much of our income on housing, but we have to For very basic housing in the areas where jobs are. We also have to spend a lot in taxes when we don’t get the benefit of paying high taxes.
This part. They love making fun of people in these hypothetical situations, not realizing that most of the people that are in these situations have real degrees. Engineering, business, accounting, nursing, all in the same situation. Poor, in debt, and struggling when we shouldn’t be because we earned the right not to be.
I think it depends on how you view/feel about debt. Having credit card debt drives me crazy so I try to avoid that at all costs. Now with student loans I'm more "careless" if you will, I plan on paying the minimum forever and living my life. Unfortunately for people like me, Black women, the chances of getting to where I am at without student loans are slim to none but I'm still not going to lose sleep over them.
People forget how much race plays a part in student debt. Our parents didn’t have the opportunity to claw their way up because their parents also were denied the same opportunities that other races were gifted. We are not on an even playing field. We HAVE to take out debt. I’m in an interracial relationship and he has no debt and I do. But, he understands it’s because of where I came from and the opportunities that I was never afforded and that my entire lineage was never afforded.
They're not a boogie man, but you should avoid debt as much as possible. That is, don't go to an expensive private school if you can't afford it, etc.
Only take them out if it will lead to a steady and secure job / source of income with growth potential. Otherwise too risky.
Yes. Only because the Universities take complete advantage of the students, they don’t thoroughly teach what they are paid to teach, and they add in courses that are NOT relevant to the Major being taken by the student. It’s a way to take more than what is truly required of them which becomes financially overburdening to the students and student, MANY, come out graduated but jobless and it takes months or even a couple of years to land a good job because companies do NOT want to invest in training their employees what the schools/universities/colleges should have taught with those thousands of dollars they have taken from the student in loans. And they don’t care. It’s all about getting the money and not thoroughly teaching. It’s robbing from one to pay the other other and the student is left with the financial mess. But yes it is bad. But we do have to pay the debt regardless of how wicked the schools financial plots against the students are. If those instructors would do their jobs as instructors then many students would excel higher. It is what it is. Study Hard, press in, made good grades, get a good job and pay your loans when you finish with school completely. And do NOT take a break from school, it will mess it all up for you.
I would go to a community college for free if possible or just to save up, then commute to a nearby university to save up. Very doable if you plan well and dont want to just go to college to get away from your parents.
This is also a great approach
It’s pretty bad. I attended a “top school” and got excellent financial aid, which allowed me to pay off my undergrad loans in about a year living at home after school. Based on my undergrad major, I needed a master’s to advance in my career and 6 years later have not even paid off half that debt and am living paycheck to paycheck without putting enough toward retirement. I only pay $200 a month but know many people who pay $500-$1000. A lot depends on tuition and financial aid amounts, how much you take out, if the loans are public or private (private have higher rates and are more predatory). A lot depends on your major and work industry. Folks I know who studied engineering, business etc are doing fine. Other jobs bring less security, but I know I wouldn’t have done well in those spaces/industries, so think about what feels like you can stick with it, not just what pays best. If I had kids thinking about higher ed, I would absolutely encourage them to look at community college, especially if they want to explore different career possibilities. I worked at a CC and have lots of love for them! I think people will increasingly be exploring options like community college as the economy and world continue to shift. You can get a great education there, and always have an option to transfer to a 4-year later with many credits already taken care of. Great cost-effective option, imo.
It all depends if your job will service your debt. I make 365,000 and started work making 190,000 with 242,000 in debt. I now have 130,000 give or take with a very low interest rate. I barely notice the payments. But if you don’t make a lot, even much lower debt loads are unmanageable.
Also, if you have to take out private loans be careful with the interest rates. I have to pay over 10k in interest on $39k debt at 4.7% interest over 10 years on a government loan. Private loan interest rates are so high