twiggers

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Question ...probably applies to those of you in grad school

I've completed my FAFSA already to meet the Indiana State deadline of 3/1. I listed 6 schools on the FAFSA, since I didn't have a definite school yet.

Now I do know where I'm going to go (well 99.9% sure), and wonder if grad school student loans are like undergrad?

In undergrad I always borrowed the max amount...with them all being unsubsidized (so 10,500 per year for undergrad).
Can I do the same in grad school, even though I'm getting full tuition remission as well as a stipend?
Is $18,500 the max. per year for grad school?
Also...is it true that the total amount I can borrow for all of grad school is only around $30,000? If so...how is that possible when people go to school for 4+ years?

Thanks in advance
 

SaraL124

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Yeah, that's what I want to know!....You have no tuition, a stipend, and a husband who works (?). Why not borrow the minimum if you have to borrow any at all?
 

sunny22

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I am not sure, but I think that 18,500 is the max you can take out in federal loans over a lifetime. So, depending on what you have already taken out, you may or may not be eligible for the Stafford & Perkins loans.

It is also my understanding that the lifetime max for student loans is $200,000, so depending on how much you have already borrowed... I haven't heard about a $30,000 max for grad school and am pretty sure that isn't true.

Aren't you still in school? If so, I am sure the financial aid office will have the best information readily available.

Good Luck!
 
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twiggers

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Well hubby won't have a job when we move, so it's a just-in-case thing. We cannot survive in any way shape or form on less than 35K per year (thats just our basic bills, etc.)
 
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twiggers

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Just found some information shoulda looked harder before.
18,500 is max per year, with 8500 being subsidized max. Total cumulative allowed to borrow (combined undergrad and grad) is 138500.
I don't want to borrow money either.....I really don't. BUT we are moving to a new state, husband has nop guarantee of a job, we are in incredible debt, husband has child support payments, before I planned on all this grad school stuff we bought a truck, RV, 3 ATVs so we have payments up the wazoo.
Right now for undergrad I borrow the max allowed, even though I work and hubby works. Any money left over after books gets put into savings account.
Right now I'm only 20K in the hole from undergrad....so if I can manage to pull out of grad school around 50K thats not so bad :)
 
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twiggers

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Sure he can get a job when we move. The student loans are a just-in-case thing. If I don't need them or use them I can always pay them back right away.
Right now my estimated poayment is only 129$ a month. Thats peanuts. So long as I don't go over around 200-300$ in payments I'll be OK.
It's not like psychology jobs pay that bad....I estimate that making $30-40K a year after grad school isn't impossible. Professorships also continue to climb approx. every 3 yrs (according to APA stats).
By the time I graduate we'll be in heaven. No more child support, truck payment, ATV payment, and the RV will be halfway paid off. We'll have more money than we know what to do with.......or we'll just go buy more toys :)
The American way....live in debt, die in debt :)
 
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twiggers

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Sorry one more thing paen:

Although Southbend isn't expensive, I'm bringing all my California debt with me to a place that pays less money. My California debt (including all the things that I paid higher sales tax on, higher prices for, child support is higher out here, etc.) has to be paid from an Indiana income.
 
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twiggers

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Hey,

Yea...fiscal responsibility is not my thing. I try, but hubby likes his toys :-( I was all against the RV but now I like it. Problem with selling those things is that I end up taking a huge loss on them because of their depreciation vs. what I owe on them. The truck thing is a prime example...I hate it and want to go lower but the amount I owe vs. what it is worth does make it possible to get rid of it.

We're also planning on buying a house out there.....mortgage payment would be about 1/2 of what rent would cost, and we have a family member living with us who splits all the household bills with us 50/50 (so that helps).

I think our biggest thing is the darn credit cards as well. We're trying to chip away at them but it's neverending.
Hubby also just found out today that his business was sold and he is getting laid off at the end of this month...about 2 months earlier than planned. We have a little bit of savings so I'm hoping we don't have to dip into it.

I think the loan origination fee for each is only around $100 (I don't think it was as high as $500). I've also been paying my interest on the loans while going to school (probably the only smart thing we've done money wise) so that will help a little in the long run.

I've told hubby to prepare for being broke. I don't really want to borrow anything, but he is the one wanting it. I don't think he can quite comprehend how 8-9 years of school will only result in making 40K a year to start. He has a blue collar job that he's worked himself up the ranks in 10 years and makes good money, and only has a 9th grade educaiton . I try to explain it, but I think he's bummed that I didn't pursue the med school thing (yikes imagine the debt then).
We're living way beyond our means, and I think once you start doing that it's hard to stop doing it. It's a neverending cycle that usually ends in bankruptcy, which I refuse to do. The only thing I can do is make sure everything is paid every month, and cross my fingers that no surprise expenses happen.

I have a friend in his 60s who makes pretty good money but spends like crazy. He always says to me: "buy what you want when you want. You'll be old and near-dying one day, and do you really want to have regrets that you didn't do something/buy something that you really wanted"
Not the soundest financial advice :)
 

Psychologyfiend

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"buy what you want when you want. You'll be old and near-dying one day, and do you really want to have regrets that you didn't do something/buy something that you really wanted"

That's interesting. I can't ever imagine having regrets "I wish I would have bought more, consumed more, had more material things".
 
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twiggers

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Psychology:
SOme people are like that...I think it's more the "well I really wanted to travel around the US but never did it" type of regrets. Some people do have that though....the "wow all my life I wanted a Porsche (or whatever) but never bought it" type thing.

Paen:
We've owned before, so are pretty aware of the costs involved. Of course we are taking all of that into account. We're also looking for homes that have been recently renovated, updated, etc. to try to avoid that stuff.
I was wondering about the seller's market thing....I know in California that is the case, but when we were looking in South Bend it seems like there are so many houses on the market, many of them come with tax incentives, and also numerous ads mention the buyer offering up front to pay part of closing costs (that's unheard of out in California...usually buyer waits until seller asks for it). So we were thinking that maybe Indiana is more of a buyer's market (in addition it seems as if the housing market is only recently starting to rebound out there.....ie; they were currently depreciating in value and are just now starting to appreciate).
Our other concern with renting is that we have 4 cats, and a dog. Very hard to be able to rent with that many animals, etc.

Man oh man.....if I had foreseen all this stuff when I first got married 5.5 years ago we would have definitely done things differently.

And BTW...sorry for being so sad-story in this thread...but thanks for the great advice!
 

winnie

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I'm very concerned about debt too. I didn't go to school in the States and have never taken out a loan in my life. According to http://gradpsych.apags.org/apr04/debt-avg.cfm, the average debt carried by a clinical grad is $64,345. That seems like an awful lot to me. Is it manageable? How common is it for people to take out loans?

I'm pushing 40 so I've got substantial savings. Still I'm not sure if those and the stipend I'd receive will really be enough to keep me going 6 years. It's scary...
 
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twiggers

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Well, just from undergrad I'm 21K in the hole. Some subsidized, some Perkins, some unsubsidized.
I'm hoping to be under/around 50K by the time I'm completely done. (Hoping only to have to borrow for this first year while we get settled).
 

winnie

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Thanks a lot for the input.

I'm interested in getting other opinions too about what kind of debt is manageable. I know it depends on where you live and whatnot, but general perspectives are helpful since I have no experience in this area.
 

Paendrag

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Let's say you aggressively pay off 64K with an average clinical psychologist salary (50K). Here is what you get. Let's assume the interest rate rises a bit by the time you graduate. We'll be very conservative about it. Fortunately, if you get stafford loans it is capped at 8 percent, so you don't have to worry about a Jimmy Carter situation blowing you out of the water, at least from a student loan interest perspective.



Interest Rate 6.00%
Debt $64,000.00
Length of Loan (Years) 10
Annual Salary $50,000.00

Monthly Payment $710.53
Total Repaid $85,263.75
Interest Paid $21,263.75

Pre-tax Salary After-tax Salary
Annual Monthly Annual Monthly
$50,000.00 $4,166.67 $31,500.00 $2,625.00


Monthly Salary Remaining $1,914.47
Equivalent Annual Pre-tax Salary $36,466.07
 
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Pterion

Winnie: At your age I would advise against a school path that will leave you (on average) 60K+ in the hole. Keep in mind that your productive years will be ~10 less than the average graduate, meaning that you may easily pass retirement age and still have a significant amount of payback time left on your debt. Most of my fellow (30 something year old) graduates are working 80+ hours a week to make enough money to afford their student loan payments and a modest mortgage. I know surgical residents who work less than that.

As Paendrag notes, the average income compared to the average debt is not a pretty sight. Keep in mind that most grads don't start at average salary, so that may increase your debt to income even higher. And frankly, I find the 64K average debt figure suspect. I bet it's higher - factor in the much higher number of PsyD graduates and their exponentially higher tuition debt.

Twiggers: as for the debt for med school: I will graduate medical school for less than half the cost of my PsyD. Almost adds insult to injury, that.
 

Paendrag

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I bet it's higher - factor in the much higher number of PsyD graduates and their exponentially higher tuition debt.
It may be higher for PsyD students, the issue is, of course, funding. Obviously this debt to income ratio is why PsyD programs are funneling their students into higher yield disciplines (e.g. neuropsychology where the median income is over 100K). Unfortunately, this probably is not a good thing for neuropsychology in general. Basically, without full funding, or close to it, psychology is a very bad gamble. Personally, I have regrets about doing it and I have no debt from my education. The time cost puts you way behind financially anyway.
 
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Pterion

Paendrag said:
!!!!! Wow. That's crazy given the income disparity. I really think a good finance/economics course should be required in undergrad. What Psy.D./professional school programs do to their students borders on criminal, except for the fact that the students choose to incur a silly burden. Btw, it is impossible to declare bankruptcy on a student government loan.
To be fair, my medical school offers scholarships based on academic merit that my graduate program did not. Medical school overall is slightly cheaper (gross) than my PsyD. The other funding opportunities, that's what makes the >50% figure. Thought I should put it in perspective.

Bankruptcy on a student loan, wouldn't that be nice? :cool:
 

winnie

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Wow, thanks all. I appreciate your candor (and Paendrag's nifty calculations). This is a delicate topic, to be sure.

I've thought about the fact that I have relatively few working years left in me :scared: Still, I have around 40 000 in accessible savings, and I'll be going from living in one of the world's most expensive cities to one of the cheaper places in the US. Both of the places I'm looking at offer full tuition remission and annual stipend of around 12 000. Actually, one of them is in a semi-rural area and the cost-of-living is said to be around 8 000 per year. Hard to imagine, but that's what they say. Additionally, my income here in Tokyo has been reduced to just over 30 000 pa for the past couple years, and I haven't had any trouble getting by...so I might be able to scrape by for 6 years or whatever without going into debt. Wishful thinking???
 
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twiggers

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I think it could be done :) Of course depends on numerous things. If I came in relatively credit-card debt free, etc. I could have come out debt free as well. But...life happens :)
I really think it just takes be strict on yourself and not frivolous (like I am lol).
 
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twiggers

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Ahhh yes I've been exploring those as well. There is one out there that actually compares college city cost of living. If you do a google search for those terms it will come up. It lists many of the major college cities across America.

We've definitely decided to buy a house. Doing that fun pre-qualifying stuff this week, and have been avidly searching the internet for houses. Probably going to drive to Notre Dame after my stuff at Purdue is done. Hopefully we'll find something.
I'm kinda nervous though.....I want the official acceptance from ND in my hand before making any commitments, plus I really want to go to Purdue with an open mind.
 

yoly26

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Do you know anything about the Armed Forces Health Professions Scholarship (HPSP)?
 

JatPenn

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yoly26 said:
Do you know anything about the Armed Forces Health Professions Scholarship (HPSP)?
For God's sake make a new thread if you want to change the subject. Thanks.