Ballpark payment on an $85K school loan

[dvcgirl]

Not that large, less than half our yearly income now - my brother in law got the same inheritence and has been bankrupt twice since then. The larger part of the story is living beneath our rather ample means.

Yeah, I remember you mentioning a small inheritance, but I've read a lot more about how hard you've worked for years and years. We didn't get an inheritance, but we did have some nice stock option grants that helped us get where you are by the same age. Mostly though, like you, we live way beneath our means and save/invest the bulk of our income.

And...I seriously think we're living parallel lives as we seem to have the *exact* same BIL.

 

[Cibahwewah]

86K is exactly how much student loan (both subsidized and unsubsidized Stafford Loans) I took out for med school. I consolidated at graduation for 30 years at 2.25% interest, my monthly payment is $390.02. My husband has student loan debt too for law school. We were advised not to co-consolidate, b/c if one spouse dies, the other would be responsible for the balance. So he has his, and I have mine. And we have life insurance too. I wouldn't let the student loan debt be a hurdle to marriage. They could get on the Dave Ramsey plan, buckle down, and pay it off sooner if they wanted to. But that's for them to decide, not future mothers-in-law.

 

[bdcp]

I don't think student loans should ever be an issue for marriage. In order to go to school someone has to pay for it. DH and I paid for our boys school and we easily have used more equity than 85K for it. We see it as an investment in their future and it was our choice. A kid who doesn't have that kind of support may not have a choice and having student loan debt doesn't have any implications towards their future debt or how they see money. An education can easily be worth a lot more than that amount of debt. Our youngest DS went to a private college and he has friends with a lot of school debt. Most of them are very responsible and will pay it off, but it was the only way they could go to school and in most cases, graduate school.

As for payment info, she needs to look it up for her loan. It could vary by a few hundred dollars depending on the type of loan.

 

[shortbun]

We're starting that process...

Will YOU be making the payments or will THEY be making the payments? What do you mean "DS wantsto marry a girl...?" Do you actually have anything to say about it? Just sayin'.

 

[angierae]

I have friends who went to vet school or med school and have FAR more than $85k in loans. They were not "irresponsible" and I'm certainly glad that their respective husbands didn't refuse to marry them because they chose to get an education!

 

[dvcgirl]

I don't think student loans should ever be an issue for marriage. In order to go to school someone has to pay for it. DH and I paid for our boys school and we easily have used more equity than 85K for it. We see it as an investment in their future and it was our choice. A kid who doesn't have that kind of support may not have a choice and having student loan debt doesn't have any implications towards their future debt or how they see money. An education can easily be worth a lot more than that amount of debt. Our youngest DS went to a private college and he has friends with a lot of school debt. Most of them are very responsible and will pay it off, but it was the only way they could go to school and in most cases, graduate school.

As for payment info, she needs to look it up for her loan. It could vary by a few hundred dollars depending on the type of loan.

Well, I think that I can say with confidence, that I would have married my DH if he had 85K in student loans when we met. By the time we met, he had a "real job" in his chosen career field and he had a hell of a work ethic. I was smart enough then to know that we would have quickly paid it off together.

I will say however, it was *great* that we didn't have any debt. We've all seen those charts about how wealthy you'll be if you start saving and investing in your early 20s....and my DH and I did that.

As for student debt *never* being an issue with respect to love and marriage....I don't know, I think that there may be exceptions.

I was reading a long article in the NYT on the amount of student loan debt that some law school grads are coming out with.....and the fact that if you go to a tier 3 or 4 law school, that it's pretty darned tough to get out of that hole.

The one kid that they profiled was engaged. He was 225K in student loan debt. He decided to go to law school at some tier 4 school in San Diego. He took out student loan debt not only to study, but to "study" in Spain for a semester, and while he was over there, he used debt to live for a month in Prague....I mean, why not he was all the way over there . And then of course there was more loans taken out just to live while studying for the bar.

And now that he's passed it, he can't find a decent job as an attorney. He was making roughly 30K a year. Barely enough to eat, let alone pay his student loans. And meanwhile, the interest builds and builds.

The article also talked about the Millennials, and how "they never think bad things are going to happen to them"....meaning that they all think that they're going to land that 150K job right out of school. I mean, these were the kids 15-20 years ago that played little league and someone decided that "every team was a winner".....nobody loses. Except in real life, where people lose all of the time.

I'm not ancient, only 43, but when I played softball as a little girl....one team won, and the other lost.

I couldn't help but feel slightly ill for his future wife....if she sticks it out.

 

[winesis]

My parents have provided my husband and I with invaluable financial advice over the years. I was "raised" with a good financial foundation - but my husband wasn't. And neither of his parents are really good about it. He has looked to my Dad over the past sixteen years of marriage as a font of financial wisdom. And not just financial wisdom. My parents have been married 45 years and raised three kids. They built a house and maintained it. They have great advice on everything from "which brand of lawnmower to buy," "how to hire a contractor," and yes, "how to keep a marriage going happily for 45 years." We are very fortunate to have them, and I feel sorry for anyone who doesn't have that sort of wisdom to rely on - or doesn't respect that wisdom if they have access to it.

In part because of their wisdom and guidance, we have two children doing well, a house that is well maintained, a marriage that is happy, and were millionaires before we were 40. I'm not sure what downside you are projecting.

Exactly!! We have openly discussed financial issues with both of our families, and are fortunate for their advice. Our families openly discuss their finances with us as well. When you are family why keep it a secret???

I think it is wonderful OP is able to offer her guidance. Sounds like her son and future daughter-in-law are still in school, probally busy studying. How nice to offer her time and LOVE to help. I hope your future daughter-in-law feels the same. Wishing them luck in their future job hunt!

 

[Firefly09]

Check out http://www.ibrinfo.org

It has a payment calculator and it will tell you if you qualify for income based repayment plan. It's capped at I believe 15% of your income.

 

[crisi]

I don't think student loans should ever be an issue for marriage. In order to go to school someone has to pay for it. DH and I paid for our boys school and we easily have used more equity than 85K for it. We see it as an investment in their future and it was our choice. A kid who doesn't have that kind of support may not have a choice and having student loan debt doesn't have any implications towards their future debt or how they see money. An education can easily be worth a lot more than that amount of debt. Our youngest DS went to a private college and he has friends with a lot of school debt. Most of them are very responsible and will pay it off, but it was the only way they could go to school and in most cases, graduate school.

As for payment info, she needs to look it up for her loan. It could vary by a few hundred dollars depending on the type of loan.

I'm not sure I agree they should NEVER be an issue. If they are combined with other debt or with an attitude of entitlement. But I don't think a student loan ALONE is enough to say "ooooh, bad choice....doomed for failure."

 

[tasha99]

Well, I can sympathize with her as that will be the total of my student loans when I'm all done this spring. That's at my state school with about $60,000 in scholarship money AND also a Pell Grant for my undergraduate degree.

I'm not overly concerned, though I wish it were less. The amount I have to pay will be capped by my income, and after 10 years whatever is left gets forgiven. Plus, there is loan forgiveness for special ed, and I think slp's in schools count. If it turns out to be overwhelming debt, I'll work summers in a hospital.

I just can't believe the people who think it was automatically financially irresponsible to take out student loans. You can't have a job in every program (with clinical hours and classes there is no time in my program. GTF positions are only for doc students who already have a Masters). Doctors get out of medical school with over a 100K in loans, but they make it.

Now if it's a degree in something with no income potential, then that's different . . .

 

[LizinSTL]

This. It also depends on the interest rates of the loans.

DS has about 55K in unsubsidized undergrad loans. The payment is $410/month. His interest rates are 3.25 and 4.25.

Current rate of interest is 6.8%.

 

[dvcgirl]

I'm not sure I agree they should NEVER be an issue. If they are combined with other debt or with an attitude of entitlement. But I don't think a student loan ALONE is enough to say "ooooh, bad choice....doomed for failure."

I agree with this. I mean, the article I cited with the kid with 225K in student loan debt and no good prospects. That's all law debt from the sound of it. And so he made those decisions as a 22 year old. That's some pretty bad judgement. He also almost bought a *condo* while he was in law school. Countrywide was all set to give him the loan too, but the kid felt weird about lying about his income on his application. I mean, the fact that it almost got to closing and he was going to lie...well, that says something about this young man's character. So, there's a lot things to consider.

But early 20-somethings these days....they are a lot more like teens these days if you ask me. They don't all make decisions like we did 20+ years ago.

 

[bdcp]

I agree with this. I mean, the article I cited with the kid with 225K in student loan debt and no good prospects. That's all law debt from the sound of it. And so he made those decisions as a 22 year old. That's some pretty bad judgement. He also almost bought a *condo* while he was in law school. Countrywide was all set to give him the loan too, but the kid felt weird about lying about his income on his application. I mean, the fact that it almost got to closing and he was going to lie...well, that says something about this young man's character. So, there's a lot things to consider.

But early 20-somethings these days....they are a lot more like teens these days if you ask me. They don't all make decisions like we did 20+ years ago.

That is a generalization. I think parents of some of these kids set them up for these problems, when it is a problem and not just trying to get an education. When parents hand their kids everything and don't teach them about money, they set them up for a real lack of understanding about how money works. Our two boys have zero debt outside of one having a mortgage and both having car payments and both have savings. They're both tighter than we are. They were raised to make good financial decisions and not just given everything they wanted. My 27 yr old DS bought his townhouse when he was 24 with no financial help from anyone and he'll be paying off his car in a month or two (early). Youngest DS (24) has been on his own for 3 years, including paying for some school. He just bought a new car that he can easily afford. The most we've done is cosign one car loan for DS27 (for lower interest rate, not because he couldn't afford it) and lease agreement for DS24(didn't have enough credit history at the time). And we paid for school. Most of their friends are the same way. Problem is what everyone hears about are the extreme problems.

If someone can afford the payments and pay their student loan debt, what is the big deal? You can't get something for nothing and education is even more important today. There is such a glut of available workers that a degree and in a lot of cases advanced degrees are what gets that foot in the door.

 

[FINFAN]

That is a generalization. I think parents of some of these kids set them up for these problems, when it is a problem and not just trying to get an education. When parents hand their kids everything and don't teach them about money, they set them up for a real lack of understanding about how money works. Our two boys have zero debt outside of one having a mortgage and both having car payments and both have savings. They're both tighter than we are. They were raised to make good financial decisions and not just given everything they wanted. My 27 yr old DS bought his townhouse when he was 24 with no financial help from anyone and he'll be paying off his car in a month or two (early). Youngest DS (24) has been on his own for 3 years, including paying for some school. He just bought a new car that he can easily afford. The most we've done is cosign one car loan for DS27 (for lower interest rate, not because he couldn't afford it) and lease agreement for DS24(didn't have enough credit history at the time). And we paid for school. Most of their friends are the same way. Problem is what everyone hears about are the extreme problems.

If someone can afford the payments and pay their student loan debt, what is the big deal? You can't get something for nothing and education is even more important today. There is such a glut of available workers that a degree and in a lot of cases advanced degrees are what gets that foot in the door.

great job for your kids...live within their means, valued education as they expense they were willing to take on. My DD has a similar outlook...she is not happy with the debt she will have, however she acccepted is as a trade-off vs an expensive wedding (if any wedding at all) new car, even owning a condo..she knows her future career will involve her more than likely working 2-3 years in one location and being flexible to move if needed so other reasons may keep her form owning a property at a young age. She also feels that takling her college debt at a young age is the best time to do it, to her, the overall cost difference between the school that is giving her the education that will make or break her career vs a school that simply allowed her to get a degree will be about $55K, Nothing to sneeze at for sure, but then again, a lot of cars can cost that these days, fancy clothes, travel, you name it. Kudos to the OP for being able to help if their advice was asked for...the kids should gather as much info as they can and make their own decision, but best to have a lot of info than none at all.

 

[LoveBWVVBR]

You can get 85K in Stafford and Perkins loans if you include BA and Masters Degrees. Belive me.....I know

Wow, I didn't know that you could get that much in unsubsidized loans for a masters' degree. That never entered my mind...I assumed that the OP was talking about a BS/BA degree for some reason.

 

[SaraJayne]

I agree with this. I mean, the article I cited with the kid with 225K in student loan debt and no good prospects. That's all law debt from the sound of it. And so he made those decisions as a 22 year old. That's some pretty bad judgement. He also almost bought a *condo* while he was in law school. Countrywide was all set to give him the loan too, but the kid felt weird about lying about his income on his application. I mean, the fact that it almost got to closing and he was going to lie...well, that says something about this young man's character. So, there's a lot things to consider.

But early 20-somethings these days....they are a lot more like teens these days if you ask me. They don't all make decisions like we did 20+ years ago.

That's because parents (like the OP) don't know when to let go and allow kids to make decisions on their own. Some parents think they should be intimately involved in ALL aspects of their lives (again, like the OP).

 

[dvcgirl]

That is a generalization. I think parents of some of these kids set them up for these problems, when it is a problem and not just trying to get an education. When parents hand their kids everything and don't teach them about money, they set them up for a real lack of understanding about how money works. Our two boys have zero debt outside of one having a mortgage and both having car payments and both have savings. They're both tighter than we are. They were raised to make good financial decisions and not just given everything they wanted. My 27 yr old DS bought his townhouse when he was 24 with no financial help from anyone and he'll be paying off his car in a month or two (early). Youngest DS (24) has been on his own for 3 years, including paying for some school. He just bought a new car that he can easily afford. The most we've done is cosign one car loan for DS27 (for lower interest rate, not because he couldn't afford it) and lease agreement for DS24(didn't have enough credit history at the time). And we paid for school. Most of their friends are the same way. Problem is what everyone hears about are the extreme problems.

If someone can afford the payments and pay their student loan debt, what is the big deal? You can't get something for nothing and education is even more important today. There is such a glut of available workers that a degree and in a lot of cases advanced degrees are what gets that foot in the door.

And just like most of the "regulars" around here are exceptions to the rule with regard to the handling of finances, I'd say that your sons are most definitely exceptions to the rule for their generation. Likely because their parents are exceptions to the rule.

There are a lot more nightmares out there than you think.

I don't think it's a big deal to take out a reasonable amount of student loan debt, but many, many 20-somethings are taking out far too much student loan debt. Student loan debt is now greater than the overall amount of credit card debt in this country. And that's saying something....

They've been sold the story that all student loan debt is good debt. Every single kid who is going to take out student loan debt should be required to take at least two finance courses, one that explains the concept of "return on investment" in great detail.

 

[luv2mickey]

I think this topic has gotten a lot of response because it is a hot button for a lot of people. We talked to our kids(19,18and16) about student loan debt and showed them the payments and reality of the debt before they entered college,they are now making responsible choices based on that knowledge. But many parents did not do this and I think people get defensive they are the ones sitting there with large student loan debt. So to sit down with your kids (even adult children) and talk about how to stop the bleeding and payoff this debt so they can live a life without the burden and stress of growing debt is a gift. The border becomes respecting the decision they do make and not trying to force the decision you would make. They may not always make the same decision as you do in how to spend there money but if they have the knowledge then you know you have done what you can to prepare them and the rest they will have to learn from mistakes but there are some kids that actually do listen to their parents. Knowledge is always a good thing.

 

[bellarella]

From a very young age, my mom taught me that "when money problems come walking in the door, love goes out the window." I firmly believe that adage.

Sounds like a self-fulfilling prophecy. And you are right, if you would automatically reject someone with debt, you very obviously have different values -- but I wouldn't be bragging about them!!!

I married someone with a lot of debt. It didn't occur to me for a second not to. Combined we had six figures of student loan debt (the vast majority for his degrees). We also had a plan as to how to pay it back from the beginning. We purchased our first home in our mid 20s, had paid off all of the student loans before we were 30, have saved for retirement since our first jobs. All of this without financial help from anyone (we expect we will be supporting our parents someday).

For us, life is about relationships, not $$$ in the bank. We have never fought about money. We have never felt burdened by the other. There has never been a second that I wished that I married someone without financial baggage. I married a life partner, not a bank account and I couldn't be happier!

(Oh, and the second we decided to get married, was the second I stopped thinking about the debt as his.)

 

[bellarella]

Oh, and this all reminds me of another story.

A friend of mine had gotten into some poor spending habits in his early 20s and had racked up quite a bit of debt (five figures). He figured out that this wasn't the life he wanted and started changing things around. He met a woman and they got engaged. At that point she found out about the extent of the debt, and did what it seems many here would do -- decided it was a deal breaker and left (because she didn't want to be burdened with his past mistakes and said they obviously weren't compatible).

Fast forward 5 years. He had paid off all of the debt (a project he had already begun before he had gotten engaged) and has a quite a healthy bank account (to say the least). He's also happily married to someone who was able to see past the debt to the person.

He ran into his ex not long ago. She's still at the job she had been at (one she hadn't been thrilled with) and is single.