berwyn

How much debt is reasonable to take on for a bachelor's degree, and is it worth it?

I am an independent student, and will be fully responsible for the costs myself. I have no debt, $2,000 savings, and am unemployed. So I would be relying on financial aid.

I'm thinking of majoring in Health Administration. I already have my AA degree from a community college.

Here's my other post about possible programs: Schools for Health Admin (Bachelors BHA)

mom2collegekids

How old are you? What kind of income do you have?

Are you independent because you're 24 or over?

Without a qualified co-signer, you can't borrow much.

YOU can only borrow $7500 per year for junior and senior year.

berwyn

I am over 24 and I'm unemployed, so no income.

mom2collegekids

Ok...then you really are independent...not just a younger person who is supporting himself

As an independent student without income, you'll be limited to borrowing the Stafford amounts, which are about...

Up to $11,500 for each year for junior and senior year. To borrow more would require a qualified co-signer...and they'd have to qualify both years. Since most people wont/cant co-sign, you'll likely be limited to the $11,500 amount.

If you have a 0 EFC, then you'd get a 5550 Pell Grant.

4kidsdad

See http://www.nytimes.com/2012/09/15/yo...ref=your-money

mom2collegekids

How much debt do you have from your frosh and soph years?

juillet

The first-year salary thing is a good guideline as long as students are realistic about their salaries (don't think you'll make the median for your field right out of college; don't assume you'll make top dollar because you went to X University) AND they base it only on their earning potential for a BA, not graduate school (that's a wild card).

But like mom2collegekids pointed out, you can only borrow $12,500 per year, for a total of $25,000. I wouldn't recommend borrowing more than that anyway. If you can borrow $12,500 per year, and you are eligible for a Pell Grant of $5500 and perhaps a SEOG of maybe $1000-2000, that gives you $18,500-19,500 to use towards school. That should be enough to cover a public university in most states.

beolein

The first-year salary thing is a common recommendation among experts.

4kidsdad

From another expert:

mom2collegekids

According to the Project on Student Debt report, even a more typical debt level of $25,000 is unmanageable at an annual income of under $40,000.

Even if you earn $40,000 as your starting salary, you will be using more than 9 percent of your pretax earnings to repay your loan...


The above is very significant since many kids will have max fed loans (27k) when they graduate and many will not be earning $40k as newish grads. I think the monthly payment for that much debt is around $300 a month....so, it's like an extra car payment in addition to any real car payment that you might have.

I don't think kids realize how much of their money will be going to living expenses. Just to pay apartment costs (rent, cable, utilities, internet) can easily eat up $1000+ a month. Then you add food, cell phone, CAR expenses (car payment, gas, insurance, repairs), clothing (need prof clothes!), health insurance, etc, etc....there just isn't much/anything left over to go towards loan payments.

umdclassof80

A lot of kids just starting out in college have no idea the magnitude of student debt they are taking on. This is especially true if you graduate with a degree that will not command a large salary. I would avoid as much debt as possible.