I attended a small local college to get my Bachelors degree from 2006-2010 in Human Services. I graduated and luckily got a job in 3 weeks after months of research and applying before graduation! My parents did not have the 20 grand each year that it costed for this school and took out loans every year. I, being clueless at the time, had no idea about loans or what it would mean for me. I now make 27,000 a year, before taxes, and owe about 42 grand in loans. My parents took half the debt as did I, which was agreed upon before my freshman year. In this major and job field, I cannot increase salary by much without a masters. I am going back In January which will cost 18 grand total, which I had to take out loans for. I am paying back my undergrad loans every month, on time, as I have consolidated all of them and could not defer even if I chose to. I live at home and live like a student, saving half of my paycheck and the rest goes to bills and l iving. I save so i can move out.
How will I get out of this 25 year repayment early if I cannot make as much as I owe? After grad school I will owe over 65 grand. How will I pay bills and move out with my boyfriend (I am 23) and be able to survive?
I’m so proud of you thinking of this now. Two pats on the back for you.
You asked, “How will I get out of this 25 year repayment early if I cannot make as much as I owe? After grad school I will owe over 65 grand. How will I pay bills and move out with my boyfriend (I am 23) and be able to survive?”
As long as these are government backed loans and you don’t make too much money you can take advantage of the 20 year repayment in the Income Based Repayment (IBR) program. That will give you a payment based on your current income.
Your question brings up a great point, there is no guarantee you will be able to earn enough money to pay for the student loans. In fact the student loans are actually designed like a game of chance.
On one hand you enter into a financial obligation with life altering consequences if you can’t pay. The loan is for educational services not guaranteed income.
On the other hand you can’t service the loan if you don’t earn a sufficient amount after graduation. This is why for decades you’ve had people graduate, never being able to afford to work in the profession they studied for. They could not afford to.
The best way to deal with this is to work closely with the financial aid office at your school to keep loans to a minimum, make sure they are government backed loans, and explore every single scholarship and grant you may be eligible for.
Only by controlling the loans do you even stand a chance of following your heart into your dream career.
I wish you the best of luck on this journey and want you to keep me posted along the way.
Please post your responses and follow-up messages to me on this in the comments section below.