Other OT-Related Information Student Loan Debt = Horrifying

[gOT2beOT]

Hi everyone!
I am sort of freaking out right now as I was just accepted to my top choice program but all I can see now are $$$$.

I graduated with around 88,000 in debt from undergrad. I went to a state school but the cost of living was high and I was very foolish not to work as much as possible. I have 20,000 of federal student loans being forgiven through a student loan forgiveness program over the next 8 years. My payments about $700/mo now with a job where I make around 37k a year, and I have no issues.

The program I am about to attend will cost 93,488 for the entire duration + the additional fees. This is not including the cost of living. I will also need to take out some money for living expenses such as housing, food, gas, etc. I plan to live very frugally but has anyone else found themselves in this situation? My student loan debt will be around 200,000 all said and done if I take out what I think I may need for living expenses while in the program.

Any advice or insight as to what to expect post grad with these loan payments? Im starting to get nervous here.

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[pintsizeOT]

I'm in a similar situation. I'm finishing up undergrad right now and will have about 50,000 in both federal and private loans for that, and that's just the principal. The OTD program I will be attending will end up being around 132,000 for the whole program. However, I will be continuing to live with my parents and commuting so there won't be any living expenses.

I just recently completed the federal government entrance counseling and input what my expected loan debt would be and it recommended that I make 300k a year to "minimize" my "debt burden." Furthermore, my estimated monthly payments after grad school will be between 2100 and 2500 minimum. As a side note, to be honest, I never anticipated not having debt after school, nor have I ever been too particularly worried because even with the debt (and paying it off for the next decade or two), pursuing a career in OT would put me at a higher socioeconomic status and give me more financial security than what I've had growing up.

My plan with my situation is to continuing living with my parents for several years after grad school while paying down the debt. I'll probably be going with the debt avalanche approach where you pay extra on the loan with the highest interest rate and highest total amount until that's gone, then roll that payment into the next highest, etc. Another approach for paying down debt is the snowball method where you pay the smallest debt first which is psychologically more appealing.

I also recommend you watch some videos on youtube about paying down debt and budgeting, there's a lot of different methods to do so. Find which one is right for you and your situation.

 

[OTcaligirl]

Hi everyone!
I am sort of freaking out right now as I was just accepted to my top choice program but all I can see now are $$$$.

I graduated with around 88,000 in debt from undergrad. I went to a state school but the cost of living was high and I was very foolish not to work as much as possible. I have 20,000 of federal student loans being forgiven through a student loan forgiveness program over the next 8 years. My payments about $700/mo now with a job where I make around 37k a year, and I have no issues.

The program I am about to attend will cost 93,488 for the entire duration + the additional fees. This is not including the cost of living. I will also need to take out some money for living expenses such as housing, food, gas, etc. I plan to live very frugally but has anyone else found themselves in this situation? My student loan debt will be around 200,000 all said and done if I take out what I think I may need for living expenses while in the program.

Any advice or insight as to what to expect post grad with these loan payments? Im starting to get nervous here.

You really need to determine what your comfort level is with debt but there's no doubt that this is extremely high. Paid back over a 10 yr term at 6% would have a payment of just over $2200 monthly. Given that your undergrad debt is equally high, I would probably pause to consider all options - if you are competitive for an instate public option it may be worth considering even it means waiting until next cycle. Otherwise there are some MOT programs that run closer to $60k that could work better financially for you. With that said if you feel this is your best or only option I'm sure you will work it out over the long term. Good luck and congrats on getting in.

 

[gOT2beOT]

Unfortunately, this is the only option I have. I own a house and cannot move out of the area for school in my situation. I was accepted to the cheapest program in PA, Slippery Rock University but it was only about 10,000 cheaper with a 1.5 hour commute along the snow belt. I highly considered but the stress of commuting, trying to maintain a part time job and studying was not going to be healthy. This university will allow me to live my husband, work and have fieldwork in Pittsburgh. Thank you for all of the advice! I really appreciate it.

 

[cb31]

Debt is terrifying, but if you get onto certain payment plans you'll debt can be forgiven in 20-25yrs. Or if you do the public loan forgiveness plan it'll be forgiven in 10 years. There is also pay as you earn which helps lower your monthly payments so that u arent required to pay more than 10 percent of ur monthly income. I have about 150k in loans including undergrad and I'm only required to pay like $350 a month under the pay as you earn (this is also one of the plans that will be forgiven after 20yrs). OT school is definitely an investment! Oh and I'd also suggest sticking with government loans and not private if you can... Hope this helps. Good luck on ur journey!

 

[beestrng]

Not worth the debt

 

[FutureOT2018x]

Debt is terrifying, but if you get onto certain payment plans you'll debt can be forgiven in 20-25yrs. Or if you do the public loan forgiveness plan it'll be forgiven in 10 years. There is also pay as you earn which helps lower your monthly payments so that u arent required to pay more than 10 percent of ur monthly income. I have about 150k in loans including undergrad and I'm only required to pay like $350 a month under the pay as you earn (this is also one of the plans that will be forgiven after 20yrs). OT school is definitely an investment! Oh and I'd also suggest sticking with government loans and not private if you can... Hope this helps. Good luck on ur journey!

Following. I'm looking into this type of payment option as well, but what are your thoughts about the "tax bomb" with loan forgiveness? I'm not talking about public service loan forgiveness. I'm talking about those extended "PAYE" or IBR plans. I've been reading on it and finding that once that certain amount is forgiven, you will have to claim it as income on your taxes.

 

[old noob]

Debt is simple math. Funds in, funds out. The prior comments are correct. You'll be looking at $2000 monthly for shorter term payoff. Even on a 30 year, it'll be substantial. Google loan payoff calculator. Once out of school, the challenging journey will continue... as you will be faced with the reality of the debt payments. However, it's almost a necessity to earn a decent wage nowadays unless one is willing to work a vocation they don't enjoy for the sake of money. It's like school is the New Franchising Model - Pay to Play. To escape debt and achieve financial independence may require many more years of sacrifice after graduating by working in a higher paying, less rewarding OT field.

$10,000 is negligible when weighed with the benefits of the school of choice. Hopefully your house will appreciate over the next few years.

I think an important aspect of your life is your relationship with your husband. Debt is a burden on a person, but in a relationship, it's obviously even more onerous since there are two minds, two opinions, etc. Communicating openly about finances is ideal, since debt will affect many aspects of a married couple, where to live, to have kids, vacations, to buy or not to buy that expensive sectional, etc. It's not a one-person burden when one is married.

It's old but Dave Ramsey's Financial Peace from the 1990s? is a good book on financial stewardship. Also Financial Samurai is a good website.

If anything, if you are young, it's not so worrisome... make the goal to be debt free (excluding mortgage) and to have a good start on a retirement account by 40 years of age, and you'll be good as gold to enjoy the fruits of your education and labor.

 

[RegretfulOT]

That is way too much student loans for an OT degree. I would pay off your undergrad student loans before amassing additional loans because interests are brutal and prevent you from paying off your principal.