Dealing with debt...

[Tortugabebe]

Decided! Thanks all

---

Members don't see this ad.

 

[scalded]

Go take a look at the monthy payment on that loan figure you quoted. then look at the median wage for an optometrist (realizing that as a new grad you will likely be making less than that). That should convince you right there to keep you student loans as low as possible. good luck!

 

[KHE]

Hello everyone,
I need some advice---please leave your thoughts if you don't mind I have two schools I am trying to decide between, and I need some perspective from graduates. The two schools are UC Berkeley and OSU...Both great schools, so I feel like I would be getting a top notch education at either school. The problem: going to Berkeley would cost me roughly $75,000 more because OSU is in state, and even after getting in state tuition at Berkeley, the tuition is higher and living expenses are outrageous. My dad even said if I go to OSU I can turn his basement into an apartment and I could live there for free. I went to OSU for undergrad and grew up 5 minutes from the campus, so I am obviously ready for a change. When I graduate opto school, I figure I'll be close to $240,000 in debt by going to Berkeley (including undergrad debt). Is this ridiculous or what!?! I have had to pay for every cent of my education thusfar, and I won't have help in opto school. Is this debt just too much? Should I stick it out in Ohio for four more years and then explore the world, or should I start living now? My boyfriend may have better job options in cali as well because he is going into environmental economics. I think I would be happy either way (at OSU because of the savings, and at Berkeley because of the experience)...Anyone have any insights?

I attended neither of those schools but you will get a great education at either one. (You will actually get a great at education at any school of optometry) That being said, I would go to the one that is less expensive.

I would also discourage you from living at home with your father though. The amount of money you pay for your own place will be money well spent in that case.

 

[Ben Chudner]

I graduated from Berkeley in 1997. Back then, there was no additional graduate tuition, and I was a California resident. I was accepted into all of the schools that I applied, and all of them had pros and cons. The deciding factor for me was the cost of education. I agree with everyone that says you will get a great education at all of the schools, so if I were you, I would go to OSU.

 

[pippistrellodaq]

This may go against the advice of seasoned SDNers, but I say go to the school where you feel you'll be the happiest, regardless of cost. I think I clicked well with the students/faculty at OSU and that the school environment would be the best fit for me, so I chose Ohio State. Saving even 6 digits of debt at a school you don't enjoy (IMO) isn't worth it.

After weighing all of your options and it's still a tie, I suggest choosing the school with the better football team (go Buckeyes!)

 

[Tortugabebe]

Thanks everyone for responding Keep it coming SDN people! It's all very helpful.

 

[sethuel1]

As a Penn State fan, I say don't go to Ohio State.

 

[luckyfool]

problem solved.

 

[BKK]

Think about your quality of life after school comparing student loan payments of $240K vs $70K. The quality of education will be fine with either school, but you will be able to get out of debt so much faster and have a real life with the OSU decision.

If you are really concerned about the debt load, think about living on a student lifestyle for a few years after school and get rid of the debt. Then you can really focusing on building a practice, lifestyle or retirement savings without the payments on $70K. In addition, try not to get the supplemental, supplemental student loans offered by Citibank, Chase or Discover, more commonly known as credit cards. Stay within your means for a few years and then let your future salary really work for you.

BK

 

[Tortugabebe]

Decided, Thanks all!

 

[chrissystar]

good job luckyfool

 

[Ryan_eyeball]

To clarify: OSU will leave me close to 165k in debt and Berkeley will be close to 240k. The difference will be (roughly) 75k. Also, I couldn't care less about sports, so that won't help me Lucky fool, nice diagram!

WOW!! you're going to have some serious loans to repay. I feel the optometry field is poor to rack up this much debt for what you get paid in return. I'm guessing in the $800 dollar a month for repayments. Education is going to be great at either school, and you're only there for four years. I'd go cheaper but that's just me.

 

[r_salis]

Great decision tree, luckyfool!

Tortugabebe -- if you feel about the same about both schools, $75K is a *lot* of money, so my advice would be to go with OSU to have less debt. You could always move out to Cali after you graduate if you want to live there for awhile. If you liked Berkeley a lot more than OSU, it would make the decision more difficult -- all things being equal, though, saving money will make your life a lot easier after graduation.

 

[cpw]

Great decision tree, luckyfool!

Tortugabebe -- if you feel about the same about both schools, $75K is a *lot* of money, so my advice would be to go with OSU to have less debt. You could always move out to Cali after you graduate if you want to live there for awhile. If you liked Berkeley a lot more than OSU, it would make the decision more difficult -- all things being equal, though, saving money will make your life a lot easier after graduation.

I'll have to ditto what r_salis says, here. As a fairly recent grad who went to an in-state school and lived at home... I didn't rack up that much debt. But, it's still a LOT of money.

The difference in your two payments should be looked at this way.

You owe 85k-100k = about $500 a month in repayment
150k = about $800
200k + = $ 1000 +

You also have to factor in cost of living. CA cost of living is almost double that of Ohio. My one bedroom in the East Bay was $1200 a month. ( 1--15 miles east of Berkeley)

If you go to UCBSO you're going to owe a full mortgage payment every month in student loans !!!

Going to OSU, especially if you can lessen debt by living at home... and your debt load will be a nice car payment every month.

If you'll be happy at either school.... definitely go to OSU.

 

[PBEA]

I had 170k in debt between undergrad and OD school. I pay $2200/mo and have 3-4yrs left on the note. With interest the 10yr payout is somewhere around 350k. If your concerned about debt, then you have your answer. If you are passionate about some other school, then you have your answer. Consider this, though OD income is not what it could or should be in many cases, the default rate on our loans is almost non-existent (relativily speaking). In short you will get a job and you will pay off your loans. Ill follow this up by saying that school is hard work but can also be fun (this will be your last chance to live a students life). I had a great time in Boston and while I could have cut my tuition in half by going to SUNY I decided against it.

 

[crinklepuff]

I was just wondering, what is a typical repayment term (i think that's what it's called) like for someone who is paying for all 4 years using loans? e.g. how long do the lenders give you to repay and is the term usually fixed or negotiable?

Thanks!

 

[PBEA]

I was just wondering, what is a typical repayment term (i think that's what it's called) like for someone who is paying for all 4 years using loans? e.g. how long do the lenders give you to repay and is the term usually fixed or negotiable?

Thanks!

Of course that varies, but I (and probably you), was able to choose the term. I chose 10 yrs.

 

[prettygreeneyes]

Of course that varies, but I (and probably you), was able to choose the term. I chose 10 yrs.

This is taking the thread completely off topic, but what are the pros and cons of choosing a 10 vs. 30 year repayment plan? How did you go about making your decision? If I was hoping to start a practice within 5 years after graduation, would it be more wise to opt for the 30 year payment to have more money each month?

Thanks!

 

[PBEA]

This is taking the thread completely off topic, but what are the pros and cons of choosing a 10 vs. 30 year repayment plan? How did you go about making your decision? If I was hoping to start a practice within 5 years after graduation, would it be more wise to opt for the 30 year payment to have more money each month?

Thanks!

Different strokes for different folks. If you weigh your needs then you can answer all your questions by your self. Although it sounds like someone should get a library card and do some research. No offense.

 

[prettygreeneyes]

Different strokes for different folks. If you weigh your needs then you can answer all your questions by your self. Although it sounds like someone should get a library card and do some research. No offense.

Considering you and other doctors on this site once stood in my shoes, I had hoped that you could offer a perspective that student loan sites and financial aid officers couldn't. Apparently... not so much.

 

[PBEA]

Considering you and other doctors on this site once stood in my shoes, I had hoped that you could offer a perspective that student loan sites and financial aid officers couldn't. Apparently... not so much.

Like I said no offense. Believe it or not, I just gave you the facts, and you just are not aware of it. For you it might be a "good" idea to choose a longer repayment, but for another it might be a shorter repayment. Your needs determine what you choose. Get it? Or do I need you to fill out personal history and financial history forms? Ill step on you grasshopper so dont even try and insukt me.

 

[sco1styear]

This is taking the thread completely off topic, but what are the pros and cons of choosing a 10 vs. 30 year repayment plan? How did you go about making your decision? If I was hoping to start a practice within 5 years after graduation, would it be more wise to opt for the 30 year payment to have more money each month?

Thanks!

Great question! I'm not an expert, by any means so if I get something wrong, someone please correct me!!!

What our "practice of optometry" professor (who owns two practices) hinted at was that a 30 year loan, while paying more in the long run for that loan, will free up more money for you to use early on - very helpful if planning on starting your own practice. Also, any money you borrow to help start the practice would likely be at a much higher interest rate than your student loans so it would be best for you to be able to pay that loan back quicker than your student loan - another reason to possibly go with a 30 year payment. And, say you go with a 10 year loan - you can't then go back and take 15 years to pay it out if you run into some financial trouble. But, with a 30 year you could (if disciplined enough) pay it off in less than 30 years without penalty.
Then there's the whole process of getting a bank to lend you money in the first place - from what I understand, having a lower payment on your loans each month looks better on paper to the bank...I can't remember any of hte specifics (ugh - finals)...I think someone touched on this in another topic so maybe they could chime in.
Hope this was slightly helpful

 

[sco1styear]

Like I said no offense. Believe it or not, I just gave you the facts, and you just are not aware of it. For you it might be a "good" idea to choose a longer repayment, but for another it might be a shorter repayment. Your needs determine what you choose. Get it? Or do I need you to fill out personal history and financial history forms? Ill step on you grasshopper so dont even try and insukt me.

You might have thought you were being helpful, but you were not. Of course she understands that it is different for different situations, that is why she specifically included that she wanted to start her own practice in around 5 years.
It would have been helpful if you could have given different arguments for different needs...

 

[prettygreeneyes]

Like I said no offense. Believe it or not, I just gave you the facts, and you just are not aware of it. For you it might be a "good" idea to choose a longer repayment, but for another it might be a shorter repayment. Your needs determine what you choose. Get it? Or do I need you to fill out personal history and financial history forms? Ill step on you grasshopper so dont even try and insukt me.

I'm sorry... did you just call me grasshopper... and threaten to step on me??? Is this a kung fu movie gone horribly wrong?

 

[luckyfool]

I'm sorry... did you just call me grasshopper... and threaten to step on me??? Is this a kung fu movie gone horribly wrong?

I'd definitely look out for those lightning fast karate chops and dropkicks. They hurt.

anyway

 

[Tortugabebe]

Haha, ok so let's leave the grasshopper stomping aside

 

[orangezero]

In regards to the 10yr vs. 30yr:

You have to look at financial matters and also personal matters.

Financial: RELATIVE rate of interest vs. car payments, house payments, credit card debt, how it affects taxes, etc.

Personal: Is it really going to make you feel better to have it paid off? For some the answer is yes, but in this day and age with an ODs income (whatever that may be) you are always going to be "working your money."

When I got out I was able to lock in a rate under 3%. I'm not sure if the government is still going to allow rate locks. I think some in the early 90s had rates of over 10%, so paying that off as early as possible made sense.


For me, it makes no sense to pay a loan off early (10yr instead of 30yr) if you then have no money to buy a car and need to get a loan of 8%. But the only way to know is to crunch the numbers. It made me feel a lot more comfortable to live like a student after I got out, and stash away as much money as possible into retirement funds and short term savings. This is what I feel would open up the most options for you, and not "force" you to take a job you may not want because you can't afford a big loan payment.

I can't comment on how this would affect your ability to get loans to purchase a practice or equipment. But, once again, I think your ability to actively choose how to spend the money gives you the power to decide. You can always pay it off early, as long as the terms are set up that way without penalty.

 

[orangezero]

Haha, ok so let's leave the grasshopper stomping aside for a moment
I do really want to go to Berkeley, and I think I am willing to pay extra for the experience. BUT, will that extra 75k make a really big difference for my day to day life after graduation? Will it just be a matter of a few more years of delaying my "life" (aka buying a house etc)? For those who are out of school now, is your debt overwhelming enough to make you wish you went with the "cheaper" choice?

Thanks!!!

I can understand why you'd want to go to one school over another. Having said that, I think that perhaps I would have been a bit more likely to take some jobs I didn't like if I had a bigger loan payment each month. Perhaps somewhat more limited options, or at least the feeling. Of course, I ended up going to what I felt was one of the less expensive schools and got a great education and had a great experience. I think if you can enjoy what you do anywhere, and you can always move and work wherever you want after school.

 

[eyepoker]

are any of the newly grads able to lock the interest rate at 3%? from what I understand most of the student loans for incoming students are around 5-6.8%, 6.8% lender gives you more to borrow, and the 5% ones sometimes only offer 5000 a yr.

with about 16k tuition, 3600 books/equipments, 5k for boad, about 10k for room in NYC, and personal expenses (although keep it to minimum), sounds like most likely I will have to use the lender that gives out more (although I plan not to the the max, just as much as I need to live as a student, modestly.).

so am I wrong about hearing feds lowering the interest rate? or is it just does not include student loans? I want my 3% rate.......

 

[still_confused]

students loans right now are around 6.8% instead of the ridiculously low interest rates (1-2%) that many past students enjoyed before. it may not be the best idea to go for that 30 year loan.

of course this all depends on your situation, but rates are high until at least 2011 so plan accordingly

 

[KHE]

students loans right now are around 6.8% instead of the ridiculously low interest rates (1-2%) that many past students enjoyed before. it may not be the best idea to go for that 30 year loan.

of course this all depends on your situation, but rates are high until at least 2011 so plan accordingly

I recommend that people ALWAYS stretch the student loans out over 30 years. Even at 6.8%, it's likely going to be one of the LOWER interest rates you get on ANY loan. If you decide you want to make extra payments, then go right ahead but don't LOCK yourself into a shorter repayment term because you never known when that extra monthly cashflow will come in handy for an investment in a practice, or a cold startup.

 

[eyepoker]

if you take a 30 yr plan, do they give you a higher rate? and do they give a lower interest rate if you do a shorter term? ? or is it just fixed at 6.8% or whatever rate you get when you take the loan?