Quote:
Originally Posted by amanda6035
*sigh* Really? This again? Are you still that upset that we disagree about this? Student loans are a stupid tax. They are not an investment. Investments earn you money. Student loans cost you money. You can get a college education without taking out loans. And no, taking out loans so you can learn a skill or gain knowledge to help you "get a better job" is not an investment. Going to school is an investment. Paying for school with debt is not an investment.
It's no secret that I deeply regret my student loans. But I don't have any desire to have them hang around around for 20 years by paying the bare minimum so that I don't have to be responsible for them anymore. Sorry, I have a life to live. And that means livinging extremely frugally right now so I can throw any extra money I have at them to get them out of my life. They are an inconvenience, and I'm taking full responsibility for them. My point in the previous thread is that for young students out there who are worried about their options, there are OTHER options. Debt is not the only option.
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Perhaps a better question is, what are the other options?
Lets look at the finances.
If you chose to go to a community college for two years first, that would save money. Here, you'd pay around $6000 for a year of community college and books. If you shared an apartment with someone, you could probably get by on $350 for rent, another $100 for utilities, and $300 for groceries/hygiene/paper goods. You'd need a car, insurance and gas. If you bought a used car with a small car loan, you could probably do all that for around $500 a month or $6000 for the year.
Annual costs:
$6000 - school
$4200- rent
$1200- utilities
$3600- groceries
$6000- car
So your costs, at a minimum, because we didn't include any clothes, unexpected expenses, medical expenses, etc. would be $21,000 per year or $42,000 for two years of community college.
If you made minimum wage... approx. $7.00/hr, you'd only have to work 3000 hours a year to cover your expenses, before taxes. Oh wait, working full time is 2080 hours a year. You'd have to find a job making more than minimum wage to cover your expenses.
After two years, you'd still need to transfer to a 4 year college/university. At that point, school costs would double.
I don't see how you would do this and go to school full time. If this student goes to school part time, then they can cut the school expenses by $3000/year but they double their living expenses over time. So, in 4 years, they accomplish the same thing and their expenses are $72,000, while working at minimum wage type jobs. And they still have to do two years at a 4 year university somehow. So they take another 4 years to finish their bachelor's degree @ 21,000/year = $84,000. Total spent over 8 years- $156,000. THEN they can start making $17.00/hour.
Alternatively, they could eliminate car expenses, spend $60,000 on a 4 year directional public university, finish in that same 4 years and start making (we'll go conservative, like an entry level teacher in this area) $17.00, 4 years earlier.
So, income goes up by $10.00 for 4 years post college @ 2080 work hours/year= $83, 200 more than you'd make during the 4 years that you would have still been finishing your degree.
So you borrowed $60,000 to earn $83,200. Of course, we need to add interest. A loan calculator provided the following for me:
Loan Balance: $60,000.00
Adjusted Loan Balance: $60,000.00
Loan Interest Rate: 6.80%
Loan Fees: 0.00%
Loan Term: 10 years
Minimum Payment: $50.00
Monthly Loan Payment: $690.48
Number of Payments: 120
Cumulative Payments: $82,857.94
Total Interest Paid: $22,857.94
So our cumulative payments are $82,856.94 if paid off in 10 years. But, we make $83,200 more than we would have otherwise. That sounds like an investment to me. If motivated and able, you could work 15 hours a week at minimum wage while going to college full time and reduce your loans by $5460 per year or $21,840 over 4 years.
Loan Balance: $38,160.00
Adjusted Loan Balance: $38,160.00
Loan Interest Rate: 6.80%
Loan Fees: 0.00%
Loan Term: 10 years
Minimum Payment: $50.00
Monthly Loan Payment: $439.15
Number of Payments: 120
Cumulative Payments: $52,697.41
Total Interest Paid: $14,537.41
So then you'd pay $52,697.41 to make $84,000.
That's definitely an investment.
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