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How long could I be in debt after college?

College is extremely expensive and there's no way I can't be in debt.
#college #money #financial-planning

Thank you comment icon I'd echo Eddie point on 2 year colleges. For example, in Kansas (where I went to school), most community college credits transfer to state-level universities via a course-equivalency concept. Folks would get through all of their gen-eds and prerequisite courses at two year colleges for a fraction of the university cost and then hit the ground running as juniors in university! Will Korf

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Amy’s Answer

First I commend you for thinking ahead on how to pay for college. Your first plan of attack is to try to take out as little to no loans as possible. This can be done. Look now to see, if your Community College offers first two years tuition free. At the end of the day, it doesn’t matter where you graduate from, just that you learn and get your diploma.
Look into Parallel Enrollment program (PEP). This allows you to take college classes while you are in a public high school for free. Even if you are homeschooled some colleges offer discounts as well. Students can technically earn their AA two year degree by the time they graduate High School. MAJOR Savings right there. Most 4 year colleges also have transfer programs that allow you to do parallel classes as well at the same time as the two year.
Also, start searching for scholarships. Apply for Senatorial and Delegate Scholarships as well. Look for any scholarship even if says to write an essay. My son took the time to write an essay and received a $1,000 scholarship for two years. One hour of writing just earned him $2,000. Not a bad start! Oh and one other thing. Look into companies that assist with paying for your college. Amazon and Walmart for instance just started up programs.
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Kari’s Answer

To answer this question, I'd consider the tuition rates of your college and I'd also consider the starting salary you'd expect to make in your degree field. I would also consider the cost of your education/college compared to other colleges. Are you attending a private college that tend to be more costly? Are you willing to attend a state school, which could be less costly? Will your ideal profession require a higher level degree, meaning you will face more education?

My guidance to my daughter, who is a senior in high school, is to balance salary potential in her profession with the amount of college debt she is willing to take on. I am guiding her to know the cost of rent, car, insurance, utilities, savings/investments and living on her own so that she can manage her lifestyle expectations to a potential student loan payment.

Hope this helps! Best of luck to you!
Thank you comment icon Thank you so much! Tristan
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Matt’s Answer

Short answer: about 20 years.

That's a really good question. The answer will depend on how much you need to borrow for college, the interest rate at which you're borrowing, and how quickly you can pay off your loans.

I see you're from California, which has an excellent network of state schools. Let's assume you need around $20,000 a year, for four years, and that you can get subsidized loans for that amount (so the interest doesn't accrue while you're still in school). So you'll end up with $80k in debt.

Let's imagine you consolidate your loans at a fixed rate of 7%. That means just to stay in debt the same amount, you'll be paying $5600/year. To get out of debt, you'll need to be paying more than that. The more you pay, the faster you'll get out of debt. At $7551/year, you'll pay your debt down to 0 in 20 years. And it will cost you over $150,000!

Notice how that breaks down: $5600 is the first year's interest, so less than $2000 of your $7551 payment is going to actually pay off your loan. If the interest rate were lower, we could pay it off a lot more quickly with the same payments, or make the same progress with smaller payments. In your last year of payments though, there's very little debt left, so very little interest - the ratio of principal to interest payments gets better over time.

We've made a bunch of assumptions here, and all the details matter. But this is a pretty reasonable picture of how all this works out.

So is school worth it? It depends. If your degrees gets you a job that earns you at least $7551/year more than a job you might get without the degree, then clearly yes. And that's very likely true if you choose to study engineering, accounting, or another highly-compensated profession that requires a four year degree (doctors and lawyers need more years, and more debt, to get to the point where they can actually practice). There are also other, personal advantages to education, which have nothing to do with money, but you asked about debt, so that's my focus here.

But, if you go into debt to finish school, and you end up in a job that isn't all that different from the one you'd have gotten straight out of high school, then college doesn't make financial sense: you're four years behind where you would have been, and $80,000 in debt. This is not an uncommon situation among those who pursue studies in the arts or humanities. It's not that you can't get a good job with an English degree, it's that it's probably not the degree getting you that job.

There are other paths to consider as well. The skilled trades (plumbing, welding, electrical work, etc.) are very highly in demand, and well-compensated. It takes around 4 years to get to the Journeyman level, but the vast majority of that is on the job training as an apprentice. You'll be paid to work and learn. There's usually a few weeks of classroom learning as well, up front, and more courses to complete scattered across that period, and you'll have to juggle that while earning your apprentice hours. But, at the end of four years or so, you could have a great job - probably making more than a recent college graduate - and not have massive debt.
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Matt’s Answer

There have been a lot of great answers above, I highly recommend that you research the expected earnings of your major before you get a loan and go to college. Let's say without going to college you can make 40K a year, and with the degree you want you will make 50K a year but it takes 100K of loans to go to college. It will take you 10 years (before interest, which will make this much longer) before you are benefiting from the degree. Far too often Americans take out a ton of loans to get a degree that earns very little money, please do not follow in those footsteps.
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Matthew’s Answer

It really depends on a number of different factors. Scholarships, grants, etc. If you go the straight loan route then that would be tougher in the long run debt-wise. Do some research on the different scholarships your state offers. They have scholarships for different levels of income, ethnicitys, etc.
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john’s Answer

There's a lot of nuance to the question and a lot of variables, but there are several ways you can optimized this.
Make sure the field you're going into pays enough to support the amount of debt that a degree will incur.
Try to keep your costs and standard of as low as is feasible to let you be more aggressive with paying off your debt.
Chase any and all financial aid that you can. There are tons of scholarship dollars out there that go to waste because people don't discover the resources and pursue them.
Try to get government backed loans instead of private loans as much as possible. You get better financial protections in the case of job loss and such.
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Amber’s Answer

It's great you are being proactive about your financial future. While there's no one-size fits all answer, there are some steps you can take to minimize the debt you graduate with.

1) As mentioned in previous comments: scholarships. I can't emphasize enough the importance of getting good high school grades, especially grades 9-11. Many colleges have early application deadlines in November of your 12th grade which is before you'd even have a chance to get your semester grades.
2) Scholarships again! :) Some people think if they don't have straight As, they won't qualify for scholarships, but that's not true. The advice with scholarships is apply early and cast a wide net. Many high schools will have a tool (or a link to a tool) that will let you apply to multiple scholarships at once. Some counselor have lists, ask for them because by the time they meet you they might have given up on giving advice to students who make it clear that they don't want advice. So ask the counselor for their advice, ask them to give their scholarship list, you might be surprised.
3) Need-based grants: Some colleges don't necessarily give scholarships, but will give need-based grants. Don't make the mistake of looking at the tuition and thinking it's out of your affordability range. Look further and based on income, many colleges can provide grants up to full tuition.
4) Start saving up with summer/part-time jobs before college and consider an on-campus job once at college.

Good luck :)
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Langston’s Answer

This is a great question. The first step would be determining if college is for you, right? Today's economy requires highly desired trade skills that have very competitive starting pay and room for career progression. There's no need to be saddled with debt, if you don't have to. If after considering this, you still find that college is where you want to be then begin with doing research on the public institutions in your state. Many universities have state funded mandates that require universities to charge less for in-state students vs out-of-state students. Once you've narrowed down where you'd like to potentially attend, reach out to your schools college advisor to ask about local grants and scholarship opportunities; you'd be surprised how many quirky ones there are. Apply to as many as you can.

Lastly, I understand even after all of that you still may be required to take out loans. I would attempt to stay within the federal sphere, as the government has many programs to help students repay those loans. Private loans tend to come with higher interest rates and rarely have forgiveness or income based repayment plans available.

I hope this helps!
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Priya’s Answer

Hi Aiden, this can really depend on individual circumstances in my opinion. My family member was in debt for a long time due to school choice/price, time spent in college, etc. On the other hand, I was in debt for a much shorter period of time due to scholarships/school choice etc. Some things to consider are:

1) Do you want to go to a university all 4 years or community college first? Community college is much less expensive, especially to knock out basic classes.
2) Do you have scholarships? What are the requirements for your scholarships?
3) Can your family help you? Are you on your own in paying?
4) What is your (or your family's) current income? How much can go to schooling at this time?
5) Can you get financial aid (PLEASE fill out fafsa no matter what!)
6) How long do you plan to be in school? For Associate's/Bachelor's/Master's/Doctorate Degree? Secondary programs?
7) Does what you want to do REQUIRE a college degree?
8) What does your prospective income after college look like?

I think these are all great questions to consider. Granted, I did not get to consider many of these, but I was able to think through some. So even just pick a few to think through but they should help answer that question. The more schooling and less support/scholarships/income you have, perhaps your debt may take longer to address. Or it could be cleared up in a few years if managed well and you some positives in these factors. I hear it often said that a college degree will give you access to a higher salary, but really look into if your job requires you to have one, or if you will be making much of a different salary with your job, and can pay the debt off in the long run. Good luck and wishing you the best!
Thank you comment icon Thanks for the advice. Tristan
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Edie’s Answer

How long you are in debt is really up to you. The best advice I can give is to minimize your debt as much as possible for your undergrad studies. There are many things you can do to minimize debt. None of them are perfect but are best in your long term interest.

Work hard over the summer and save as much money as possible.
Consider attending a 2 year college where the costs are much lower and then transferring to a 4 year college
Get a position as a resident advisor and earn free room and board and a small stipend
Go to a public university as opposed to a private school
Apply for all types of financial aid
Consider joining the military and receiving a free college education
Do you best in high school and have other interests. This will help your ability to obtain scholarships.

Your graduated self will thank your college self when you graduate with little to no debt. The rule of thumb is that your total debt should not be more than your expected salary from your first job after college. But less is better! Don't be fooled by "fancy" campuses that charge a lot of money. As long as you are attending a reputable university, you will be set to enter work when you graduate. Once you are working, where you received your degree will be far less important then how you perform on the job.
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Madi’s Answer

Hi,

This was a major concern for me as well before I enrolled in college. The bottom line is that everyone is different. The typical borrower takes about 10 to 20 years to pay off their student loan debt. Some factors affecting student loan repayment time are: the amount of money saved up to pay for college beforehand, the cost of tuition, room and board, the repayment plan of your choice, etc.

To lessen your debt there are a few things you could do. You could become a resident assistant to lessen the cost of room and board. You could apply for scholarships, both locally and nationally. You can apply for financial aid grants through FAFSA. You can attend a college in your state or a public college, which are typically less expensive options for college. The list is endless.
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Uma’s Answer

Scholarships, scholarships, scholarships! There are millions of scholarship dollars up for grabs every year and they can significantly alleviate the financial burden of college. It is likely your school will offer direct scholarships to students and there are several organizations and companies that offer money as well. I suggest looking out for scholarships offered by groups that are local to your area as there may be less competition to get them.
Additionally, when you are in college, look out for job opportunities that align with your career interests (ex: research assistant). This will not only allow you to make some money but also bolster your resume when you job hunting.
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