I am 100% debt free. No mortgage. No car payment. Nothing owed on credit cards. No student loans, even though I have a four year BFA from a reputable school. I’ve got less than $10k in savings but it’s growing. I make approximately $29k a year. I even have money in a growing 401(k). I have been extremely lucky to end up this way.
So I’m sure you’re wondering why I’m writing to you? Well, I’d like to go on to higher education and get my Master’s. The circumstance that allowed me to get out of undergrad debt free is not around this time, and I will have to pay my own way. Having less than $10k in savings, I will obviously need to do student loans.
The situation surrounding this school is that it is in a VERY expensive city. I will not be able to work full time… perhaps not even part time to complete this rigorous program. There are not a whole ton of scholarships for graduate students, and my school does not offer scholarships to its students right off the bat. I’d have to 100% subsist (tuition, books, and living expenses) on student loans.
I’ve read some things on your site and I’m a little nervous about student debt. I’d like to go about it the smartest way, but I’m afraid I don’t know a whole lot about the system. I don’t wish to jump in blindly and end up in a bad spot years down the road. So– and I bet you never get THIS question: What is the smartest way to get IN debt so that it’s manageable?
What is the smartest way to get IN debt?
Oh my gosh. I laughed so hard when I read your question. You made my day. I never get questions like this one. Awesome!
If you are going to go for a student loan the best advice I can give you is to STAY AWAY from Sallie Mae and any private student loan lender. Go for loans that are offered directly by the U.S. Department of Education, click here.
Government loans have the most flexibility in repaying them and offer real programs to assist borrowers if they run into problems in the future. In fact, recent changes to repayment programs otherwise known as the Obama Student Loan Program, will go into effect in 2014 and give people an option to repay loans with payments that are no more than 10% of their income. This is something no other lending resource offers.