Monday, July 18, 2011

But don't take my word for it.... Student loans

There's a lot of student loan bashing here on the blog.  My personal pet-peeve is calling student loans an investment.  Hint: they aren't, the degree is.  My goal is to graduate with my MBA debt-free from business school and I've committed myself to two years of dogged avoidance of student loans.  So things here might be a little bit slanted. Because, clearly, I only maybe have an opinion.  Honestly, it's not all bad, I'm just saying that if you can avoid student loans do so and carefully evaluate the ROI and risks in your plan before committing yourself to an expensive degree.

But I thought it might be time to gather some outside opinions.  So without further ado, the round up is below so you don't have to take my word on student loans.
 How do you feel about student loans?  What contributed to your views on them?

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  1. Great round up. I agree with you, but call me a hypocrite, my husband and I have student loan debt from his M.A./Ph.D. program and my M.A. program. We were both debt free after out B.A.s. Now, we are going to try to pay it off as quickly as possible.

  2. I think student loans are just like any other debt, it can be helpful or hurt depending on how you use it. My DH moved some of his cc debt to student loans while he was paying of his cc debt and we have used some student loan debt as the down payment for our duplex. We can afford the payments and the loans have helped him get into a good grad school, which is now paying him for the research he does. But if you take loans for a degree that will not increase your earnings or use them to just spend extra while you are in school, then they loans are not good.

  3. Mom's Plans - You'd only be a hypocrite if you took out the loans and blew it all in Vegas or something equally irresponsible. Somehow I doubt that was the case. It's sometimes just not possible to get the education you need to advance your career without loans; you just need to make sure it's actually what you need and that loans are best way to pay for it.

    Frugal Student - Fascinating that you're leveraging using student loans. The interest rate would certainly be lower than the CC. Do you live on less than the student budget the school has set to have this extra money? Mine will only lend up to the cost of attendance.

  4. The school counts cost of attendance plus living expenses and they seem to think you need much more than we do. Plus because I am taking classes the amount we are required to contribute is less than normal.

  5. I know this has nothing to so with student loans, but I just realized your Reading Rainbow reference and I have to say it is awesome!

  6. I think it took me like 5 years to pay my loan, I don't recall. Maybe 4 years. Anyway, the loan was totally worth it, without any doubt whatsoever. However, I still didn't like paying for it years later:) Debt is less fun than being debt-free, even if a part of a winning investment! Yeah, I know I said that word...investment:) However it's classified, it's an expense that can provide a very good ROI.

  7. I have student loans :D (and proud of it???) Anyway, I compared government loans (OSAP) to a bank line of credit because I have both.

    I really wish I had been able to graduate debt free but my family is low-medium income and I knew for as long as I can remember that I'd be paying for school myself. I also didn't consider the option of taking time off and working to save.

    All in all, I'm proud of the degree I earned and am already taking steps to get out of debt ASAP (even though I'm about to take on another $7000 for my last year :O)


  8. Worth it 100%. Paid back in 6 months DH $25k for mba. he had a phd already.

  9. Thanks for including my article. There are more and more horror stories of young adults with six-figure student loan balances. Ouch!

  10. Frugal Student - My school also seems to think that I need twice what I currently live on. I won't complain though since aid (including grants) is calculated from that number. The higher the budget goes, the fewer loans I have to take out ironically.

    Niki - It dates me, but I loved the show as a kid.

    Squirrelers - Sounds like your MBA was a great investment for you even if you used student loans to finance it :)

    Jenny Z - Great to hear about the issue from a Canadian perspective. As a commenter noted on another post, it gets a little US-centric around here since it's my only experience. Good luck with your last year and paying off your loans!

    LAL - Interesting to get an MBA on top of a PhD. Was the PhD in a technical field? I bet that combo would have recruiters banging down your door. Glad it worked out well and a 6 month payoff is impressive!

    mbhunter - Thanks for telling me about your article ;) Ouch indeed.