How much debt is too much?

[berwyn]

<p>How much debt is reasonable to take on for a bachelor’s degree, and is it worth it?</p>

<p>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.</p>

<p>I’m thinking of majoring in Health Administration. I already have my AA degree from a community college.</p>

<p>Here’s my other post about possible programs: <a href=“http://talk.collegeconfidential.com/other-college-majors/1392612-schools-health-admin-bachelors-bha.html[/url]”>http://talk.collegeconfidential.com/other-college-majors/1392612-schools-health-admin-bachelors-bha.html&lt;/a&gt;&lt;/p&gt;

[mom2collegekids]

<p>How old are you? What kind of income do you have?</p>

<p>Are you independent because you’re 24 or over? </p>

<p>Without a qualified co-signer, you can’t borrow much. </p>

<p>YOU can only borrow $7500 per year for junior and senior year.</p>

[berwyn]

<p>I am over 24 and I’m unemployed, so no income.</p>

[mom2collegekids]

<p>Ok…then you really are independent…not just a younger person who is supporting himself</p>

<p>As an independent student without income, you’ll be limited to borrowing the Stafford amounts, which are about…</p>

<p>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.</p>

<p>If you have a 0 EFC, then you’d get a 5550 Pell Grant.</p>

[4kidsdad]

<p>

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

See <a href=“http://www.nytimes.com/2012/09/15/your-money/student-loans/answering-questions-on-student-loan-rates-and-what-lies-beyond-your-money.html?pagewanted=2&_moc.semityn.www&ref=your-money[/url]”>http://www.nytimes.com/2012/09/15/your-money/student-loans/answering-questions-on-student-loan-rates-and-what-lies-beyond-your-money.html?pagewanted=2&_moc.semityn.www&ref=your-money&lt;/a&gt;

Mark Kantrowitz, who runs the encyclopedic Finaid.org Web site, has developed one rough guideline: Students should borrow no more, in total, than whatever they think their first-year salary will be once they are finished (though ideally a lot less). That should keep the payments affordable, assuming they don’t change their mind about what they want to study, and manage to get a job in their chosen field.

</p>

[mom2collegekids]

<p>How much debt do you have from your frosh and soph years?</p>

[juillet]

<p>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).</p>

<p>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.</p>

[beolein]

<p>The first-year salary thing is a common recommendation among experts.</p>

[4kidsdad]

<p>From another expert:

@Making College Pay

The Project on Student Debt has determined that $65,000 in student loans at 8 percent interest over 10 years is unmanageable for any individual earning less than $70,000 annually.</p>

<p>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.</p>

<p>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…

</p>

[mom2collegekids]

<p>*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.</p>

<p>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…*</p>

<p>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.</p>

<p>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.</p>

[umdclassof80]

<p>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.</p>