What to do with massive debt and no job?

<p>Say I want to attend a prestigious, yet expensive university.
I graduate after 4 years, and move on to a masters program, anticipating receiving a job afterwards. Once my 6 years are complete I have racked up 80k in debt and I have no job. The economy is bad and I simply cannot find decent work. What happens in this kind of situation? I'm sure these scenarios happen all the time. Is it really worth all that debt and stress, or should students avoid debt, even if it means attending an unranked university. With 80k in debt and high monthly payments, what happens when the income simply doesn't match the bills?
Thanks to anybody with experience on this who decides to answer...</p>

<p>If you don't think the job prospects are good in the field you're looking at, then don't rack up the debt. Go to a cheaper school and try to apply for funding in graduate school. Or take time off after undergrad to work (anywhere you can) and save up money for grad school. </p>

<p>If you think the job prospects are quite good and you decide to rack up the debt, and then you find out too late that they're not what you thought they'd be, then there are a few options.</p>

<p>You can try to apply for a longer deferment or forbearance until you find a job. Not ideal since your loans will continue to collect interest and therefore increase what you owe when you finally do find work.</p>

<p>Some lenders will change your payment options so that they are income based, or graduated, or some other plan. Then find whatever job you can to meet those minimum payments.</p>

<p>Or...default. Which will lead to them garnishing a huge chunk of your wages when you do find work, and is not even worth the consideration. At all. </p>

<p>If the job you find doesn't pay well, you may end up working two jobs. I'm taking time off after undergrad to pay down some student loans before going back to grad school. I'm looking at getting a second part-time job, since I already work full-time. You just have to do what you have to do. But if you have cheaper school options, seriously consider them.</p>

<p>MAster's degrees are overrated. Many people go for them because they finish a four year degree and have no idea how to land a job. </p>

<p>There are sponsored Master's (and PhD's) -- where you earn your degree because you are doing work that is of interest to a corporation. Some sneer at these saying you've sold your academic soul -- but I earned my Master's while being paid $500 a month (enough to pay rent, groceries and gas) and had my tuition bill paid. The corporation that funded the degree had donated the money to the university as part of a compensation package, so they had no say in my work. </p>

<p>Also, please get over the notion that only the prestigious universities have merit. Many, many colleges have internship programs that train local kids to move into local professional work (example, one young friend recently earned a Computer Science degree at the relatively small Western WA University. He moved briskly into a well paid job at one of the many software companies based in Seattle. Why should a company fly you in from Boston/NY/RI to interview when there are capable applicants in Bellingham, WA?).</p>

<p>The world is rapidly changing. We are no longer in the roaring 90's. Forget what the students ahead of you did. Do what you can afford.</p>

<p>Why would you rack up $80K in debt? Most people don't make anywhere near that, even after they graduate from college.</p>

<p>To answer your question explicitly, if your debt is all federal you can take advantage of the income-based repayment plan. It limits your payments to roughly 10% of your income, and after 20 years, whatever you have not yet paid off is forgiven. (This is under new legislation that will be enacted in 2014; currently the limits are 15% and 25 years.)</p>

<p>More than likely some of those loans will be private. Private loans are much harder to get rid of and often are not discharged in bankruptcy. If you are lucky, you can get loan forbearance until you find a job; if you are unlucky (or cannot find a job), you will default on your loans. Your credit will plummet and it will take you a while to climb out of that debt.</p>

<p>The problem is that people assume that there are only two choices: massive debt at a prestigious university and no debt at an unranked one. There are plenty of great public universities that students can afford with little to no debt, and there are also good colleges out there that offer merit aid to excellent students.</p>

<p>Also consider majors that are likely to lead to employment. I'm not saying that English and history majors never get employed (and I was a psychology major right before the recession hit), but accounting and nursing majors are more likely to find work faster than liberal arts majors. If I were entering college now instead of 2004, I likely would've chosen a very different path.</p>

<p>The relevant and helpful contributions by CC members never fail to amaze me.
You all have really presented some great points...
@juillet- What if you were back in 2004 again with the knowledge you now have? Would that change your choices?</p>