Chilling thoughts about educational debt

[DougBetsy]

My quick & dirty "rule" is to limit your total borrowing to your anticipated first-year salary in your "safety" job. By "safety" job I mean the same as when we talk about "safety" colleges - that is the job you are pretty sure to get with an undergraduate degree in your field of study, not the dream job. I think a college grad with a liberal arts degree can reasonably expect $30K as a starting salary. The graduate school might make sense if it will qualify you for a higher paying position.

When your payments are due, arrange for automatic withdrawal from your checking account - and treat the payment amount as if it was never there. That is -- subtract that off the top of your budget. And as I noted above, make an extra payment or two at the beginning of your loan --that puts you "ahead" on the books and will prevent you getting charged any late fees if for some reason a payment later on isn't credited properly.

A reasonable amount of debt will not be a problem if you manage it well -- the problem that people typically run into is that they get in over their heads and can't make all their payments.

I was just about to ask, "so, what's a 'safe' level of undergrad debt?" Then I got to the end of the thread and saw your post.

I was thinking along those lines (entry level salary), but didn't know if it was too arbitrary.

[Youdon'tsay]

calmom, I like that guideline!

[Atana]

"If you plan on working in the US afterwards, then you take currency risk in that you will be earning in dollars but paying back the loan in Swedish currency (my assumption)."

BCEagle, and that could be quite a concern given the fall of the dollar to the Euro. The Crona is currently at 9.4518 Euros. The dollar seems now to be at .629 Euros but the dollars value has been plunging since March.

Cameliasinensis, You didn't specify what field the graduate degree you're considering is in...but if it's in education or any of the liberal arts it would be wise to really think about the risks before going to graduate studies.

But even heretofore safe degrees like medicine are troubled now. Earlier this spring the AMA asked (begged) the USDOE to restore and expand loan deferment/forgiveness programs. Which apparently may not have happened, Spelling's seems to have stonewalled it. There seem to have been no additional mentions of the matter in the Chronicle of Higher Education.

And if the Swedish government is subsidizing SL's hopefully they've kept better control over their systems than the US, Britain or Canada. These three countries have had some troubles, but Canada seems to be moving to resolve the issues. Ironically the British and the Canadians have some of the same (or subsidiaries) of the companies operating there which have caused most of the the troubles in here in the US. Troubling to think the US government created financial monsters which used our poor governmental policies to gain assets to spread to other countries. Apparently cronyism produces it's very own form of viral idiocy.

[cameliasinensis]

Originally Posted by Atana

Cameliasinensis, You didn't specify what field the graduate degree you're considering is in...but if it's in education or any of the liberal arts it would be wise to really think about the risks before going to graduate studies.

Not education or the humanities. Possibly a M.Arch (architecture) or an MBA, or something else that I haven't thought of yet, but I'm not making plans for anything I don't know will be feasible.

I was set on international relations and just recently realized I probably wouldn't like it, so it's all up in the air right now.

[Atana]

Well you're being very wise in thinking it all over. Quite a few profs linger from the Halcyon days of the 60's and 70's when taking courses to discover oneself didn't cost that much or cause too much trouble.

But in the last decade or so that little idyll was strangled by the growth of the debt paradigm already discussed in this thread. So its very smart to be sure of what you intend to study, regardless at times what the profs may advise. In some cases they're out of touch, in others trying to bolster declining enrollments.

Architecture would seem to be better than the softer arts. The soft arts when considered in regards to the costs of the degrees tend not to balance out especially well.