One thing that would help is if schools had the ability to limit the amount they let students borrow. Right now the school has to allow the student to borrow the entire amount for which they qualify- even if it isn't a smart financial move for the individual student, as you note cases of, BulldogMS.
The alternatives are to let the feds set an arbitrary limit on what grad/prof students in general can borrow, or to leave it up to the student- in return for abolishing forgiveness and similar consumer protections.
Well, the funds aren't unlimited...you can't borrow more than what the school decides is your cost of living, at least, not from the feds. Do people actually need that much money to support themselves? Doubt it in most cases. Some schools seem to have more faith in their students' ability to scrimp, while others give students a pretty cushy budget.
Barring extraordinary circumstances, I am pretty sure it's not a great idea to borrow the maximum every year. The less you take, the less you owe. You will thank yourself once you graduate.
So is your spreadsheet assuming we pay back the interest accrued during school, before we graduate? Thank you so much for your document!!
Yes, that is what it assumes. If I remember correctly, all the interest accrued during school is added to the principle once you graduate, so it's probably a good idea to pay it off as you go if you can. I could probably have accounted for accruing interest during school, but my eyes were crossing from looking at the formula already.
You could probably do the math yourself and replace the original amount with the higher interest-not-paid amount in the cost-of-tuition-and-fees box. You'd divide the original amt by four, and subtract $40,500 if the amount is over $40,500 to get your GradPLUS amount for each year. Then multiply your Stafford amount by 6.8% and the GradPLUS by 7.9% to get interest accrued in one year. Add the two interest amounts together, multiply by four, and add to the original tuition and fees cost found in the spreadsheet to get your new interest-not-paid amount.
Having just talked through it, I could probably put it into the formula, but it does make a few assumptions:
1. That you take out the exact same dollar amount of loans every year for four years. IRL, this will not be the case for schools where you can change residency after your first year, so it won't give accurate amounts for them.
2. Also, many schools' tuition amounts change from year to year, which doesn't affect final tuition and fees numbers much, but might affect how interest accrues. (justavet, do your numbers account for this difference in tuition from year to year? I know some schools' 3rd and 4th year tuition rates differ from earlier years...)
TLDR: If you can, keep on top of your interest while you are in school, because you don't want more principle on the hind end.
hygebeorht, yes, those are my numbers. I'm just surprised to see them. I left that group almost a year after giving them that data because they never did anything with it- and wanted to tell me what I could do with it, and what I could say in public when it came to student issues. Not a good fit for a born contrarian with a mouth on her and something to say
Absolutely second the thanks for sharing your spreadsheet! Those are mad skillz lol!
Can I embed that on my website, on my Should I go to Vet School page?
Absolutely use it - I couldn't have done it without your amazing data in the first place! However, you may want to wait a week or two so we can play with it and make sure the formula works. I've already edited it three or four times to fix problems, so there may still be a few lurking.
It may be worth adding another worksheet to the spreadsheet just for debt paydown calculations. We could add a few more columns and play with other ways to pay it down like IBR...but I'm not sure how useful that will be, since IBR is based on an income that will be different for everyone. We could also compare the total amount paid for different payment timelines. What are your thoughts?