MOT worth the money

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OTlg2

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Is anyone else in the same situation as I am? When I finish my MOT in 2 years I am going to have close to a 6 figure loan to pay off. It's not because I've gone to fancy schools in expensive areas, it's because I have had to finance almost everything for undergrad and haven't had the luxury of living with my parents. The same will be true for grad school. Please tell me I'm not the only one in this situation.

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That is up to you to decide if it's worth it really. How bad do you want to be an OT? If you are not an OT what else can you see yourself doing? My total BS/MOT is under 50K Texas is an affordable state for school. I also had to live on my own and pay things it isn't easy. I couldn't handle anything at 100K or something in that area it would be to hard for me to pay back plus the interest along with it. Looking at my future as a woman I want to get married one day and mortgage is another debt with a partner that is potential two student debts. That's me! I'd have to be like a teacher maybe like special education, and get on the tuition assistance for teachers they cover like all of it. Some on here have 100K debt.

You have to ask yourself what you can and can't handle in debt only you know your financial situation. We all have a different financial situation just cause someone is going to take out 100K doesn't mean another can. You have to go by what you can handle and only you because you will have to pay back the money along with your other bills nobody else. You will get a sign on bonus and some tuition assistance with the job you land but it is usual in a range of 5K-20K, it won't cover it all. Wishing you the best in whatever you do!
 
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I am terrified of the debt as well. I am pretty sure I will love the profession and when I do the math and include repayment bills I will still be be making significantly more than than I have before.

I think a lot of valuable info gets lost when we talk about national averages.... I found this more helpful:

http://www.bls.gov/oes/current/oes291122.htm
 
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I am in the same position...I unfortunately already have 60,000 in student loan debt from my undergrad education with interest and all that. So I am struggling with adding another 60,000 for the MOT program I got into. I can start it this fall or I can keep waiting some more and try to go for a cheaper program but there's no gaurantee that would work out. What to do...sigh! I am sick of waiting and waiting to get my OT career started but I am also sick of worrying about six-figure loan debt.
 
Anybody else have any incite on this situation?? I am so conflicted with this!
 
Six figures of debt is not good. You should do a simple ROI analysis. If the return is better than 4-5% over 30 years, then it's better to go do the MOT. Another way to look at your loans is to use a 30 year mortgage calc. Look at the total cost of the loan for 30 years with fixed interest (whatever your loan terms are). Then, divide the loan amount by 30. This # should be deducted from your annual salary. So, for a $100000 loan at 6% interest, you will have paid $113k in interest ALONE over 30 years. Your total loan amount will be $213k. In other words, your annual salary will be reduced by $7137. The median OT salary is supposedly $72k (I have a hard time believing that). So, expect to have an effective salary of $64-65k.

The good news, with inflation your debt should shrink as your wages go up! So, in 30 years, what was 10% of your income should be less than 4%.
 
Six figures of debt is not good. You should do a simple ROI analysis. If the return is better than 4-5% over 30 years, then it's better to go do the MOT. Another way to look at your loans is to use a 30 year mortgage calc. Look at the total cost of the loan for 30 years with fixed interest (whatever your loan terms are). Then, divide the loan amount by 30. This # should be deducted from your annual salary. So, for a $100000 loan at 6% interest, you will have paid $113k in interest ALONE over 30 years. Your total loan amount will be $213k. In other words, your annual salary will be reduced by $7137. The median OT salary is supposedly $72k (I have a hard time believing that). So, expect to have an effective salary of $64-65k.

The good news, with inflation your debt should shrink as your wages go up! So, in 30 years, what was 10% of your income should be less than 4%.

Hawaiiguy, doesn't the interest pretty much cover inflation differences? I know some about loans, but it sounds like you know a lot more so I'm glad to see your input on this thread. I had never considered the loans in terms of a mortgage.

Also, 30 years feels like a LONG time to hold on to a debt. I'm aiming to pay mine off by the standard ten.

Gina, good luck with your decision! It's a tough call. From my point of view, I never considered any schools that would put me into a six figure debt. It was my affordable state program or a different career. Have you looked into tuition assistance?
 
There really isnt a lot of tuition assistance just a few things out there. It's hard in OT I don't get why there isn't more assistance and money for it like nurses and teachers etc..!
 
Hawaiiguy, doesn't the interest pretty much cover inflation differences? I know some about loans, but it sounds like you know a lot more so I'm glad to see your input on this thread. I had never considered the loans in terms of a mortgage.

Also, 30 years feels like a LONG time to hold on to a debt. I'm aiming to pay mine off by the standard ten.

Gina, good luck with your decision! It's a tough call. From my point of view, I never considered any schools that would put me into a six figure debt. It was my affordable state program or a different career. Have you looked into tuition assistance?

No, definitely not. Inflation expectations are currently near 0%. Actual inflation is probably closer to 2% if you believe the BLS stats. Also, inflation in salary is what really matters since this is what will be paying down debt. Historically, wage inflation has been nearly stagnant with CPI inflation for the past 30 years. I expect this trend to continue. So, in nominal terms, you will be losing 6-2=4% to interest--assuming the loan terms are for 6% fixed. I really don't know what student loan rates are right now..o.I'm assuming they are higher than mortgage rates. So, keep that in mind. Also, yeah, paying down debt at 10 year makes your total cost of the loan much smaller. But that shouldn't detract from the fact that NO ONE should be accruing THAT much debt for a job that in all likelihood will only pay 50k on average for a starting salary. I find that to be financially irresponsible.
 
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We're in the same position Gina.

How many years will trying for the less expensive program prolong your graduation date? If it's 2 years longer then consider the $100-$120k that you will not be making if you would have been working, and using on those student loans. You may break even regardless of which program you choose if you think of the money you will make if you start working earlier, or it may even be more reasonable to go to the more expensive school.
 
Consider looking into loans from credit unions and other sources.

Although you cannot get deferments, forgiveness, etc., but the rates are much lower than the federal programs.

Federal is 6.8 % for the first $20,500 per year and over 7% something for anything more that you need in that year. Plus 1-2% loan initiation fee...think of it like points on a mortgage.

If you think you are going to be the one pounding out the payments to get rid of your loan, borrowing the money at a lower interest rate means less cost to you. Period. But again, you do give up "benefits" you get from the federal program.

'Tis a heck of a balancing act.
 
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