Pre-Signing Considerations

So it looks like I’ve traded in my old-school megaphone for a microphone attached to some monster amps and six-foot tall speakers that I’d expect to find at a musical festival like Austin City Limits. What was once a fireside chat about my own personal journey to pay down my debt now has much greater reach than ever before and is evolving into something…different.

And here I was thinking I was completely done with the blogosphere when I posted the video back in April. Each post takes anywhere from one to three hours to type, and I was looking forward to getting some free-time back in my schedule. Then, some remarks I read online last week forced me to define the target audience for my blog, so I had to write the Poster Child post. Then I thought I could finally wash my hands of this blog.

But my conscience won’t let me. I’ve received so many questions asking for advice that I haven’t had time to respond to a single one. I’m still trying to build my career (putting in ~50 hours a week), and hit the gym every day, and maintain my friendships, so I just haven’t had time to respond with some thoughtful, personal advice. I file all of the questions away in a folder in my Outlook with every intention of getting to them when I finally have some free-time, but that hasn’t happened yet. Well, I can’t put it off any longer—there’s this one comment that somebody made on my blog, a comment that my conscience won’t let me force out of my head:

 I’m still hoping you might share what you would tell yourself, if you could write a letter to your 22 year old self, prior to accepting the student loan money. I believe education is a great investment, but could you have done your Harvard MBA on fewer loan dollars, or with a part time job, or spending less on your ‘wants’ ?

I see all the cars in the university parking lots and can’t help wonder if student loans have propped up the American auto industry, and then seeing the full bars and cafes, the entertainment business as well.

Please, give a shout out to all those students about to sign the loan documents.

It appears that there’s unfinished business. After reading the comments on the blog and the emails in my inbox, it almost feels like I have a responsibility to help people. So many readers have asked me for my spreadsheet (which I’m happy to provide, btw—just email me), but beyond that, people have written to me saying that they don’t “trust” financial advisors to steer them in the right direction, and they think I can do a better job of it.

So, yes, this blog is evolving into something different. I don’t know exactly what I mean by different, but this blog shouldn’t be about me anymore. I’ve been in the trenches, I’ve done my time, and I wrote an admittedly self-centered story about the entire experience. Now it’s time to look outward and try to help others. That feels like the natural evolution of what I’m doing here, and it’s something my conscience and I want to do, anyway, so let’s do it.

Here’s the deal, though, folks: I’m no expert. I’m not a licensed financial adviser, and a lot of what I did was psychological, anyway–nothing financially fancy, I just tricked my mind into not buying useless stuff, convinced myself I was better off selling some stuff rather than owning it, and searched for fulfillment in different experiences rather than the same old expensive ones. But just like I’m not a professional financial guru, I’m not a trained psychologist, either. So read my advice, but keep in mind that you might be getting what you pay for!

That said, while my credibility is not to be found in the certifications and diplomas in personal finance and psychology that do not hang from my wall, the credibility comes from the fact that I made some really, really foolish financial decisions in my life, I got wrapped up in a certain lifestyle, I saw the error of my ways, I repented, I reacted, I sought and found renewal, and I survived to share the story. And now I’m building up my wealth instead of paying down my debt (and it feels a HELL of a lot better).

So, with that said, let me answer that question that has sparked the evolution of this blog. What would I tell the 22-year-old me who signed up for $101k of student loans?

Well, I was actually 23 when I was accepted into HBS and 24 when I got the loans, but that’s beside the point. And in fact, I actually want to back up further, to when I was 17 and applying to undergrad. Now, my parents had committed to paying for undergrad. In fact, I literally remember asking my dad when I was like seven or eight if he would foot the bill to Yale. Somehow, at that young and impressionable age, I knew that Ivy schools were a big deal. And I remember asking him if he’d pay for it even if it cost $100k. Don’t ask me how the hell I remember this, and feel free to call BS, but I swear (!), I swear this conversation went down. And good old Dad laughed at me and said yep, he’d foot the bill.

Well, I went to Michigan where I was charged in-state tuition, something like $9k/year, so Dad got lucky.

Anyway, the fact of the matter is that I knew my dad would pay for undergrad, but I was still extremely careful about my post-undergrad prospects. I had a dream to fly planes. I wanted to fly 747s internationally. I thought that that would be the coolest job ever. The prestige, the adrenaline—it seemed like a dream job. Growing up, I didn’t go on many trips involving planes, but the best part of those rare trips was never the destination—the best parts occurred at the beginning and end of the trips, on the plane. The exhilaration of being pinned to the back of my seat by the raw acceleration during take-off, the sight of the miniature houses and cars below as we climbed into the sky, and the scary-but-awesome landings—those are the parts of the trip that I got excited about.

Making a career out of it seemed like a foregone conclusion. For one of my birthdays, my parents paid for me to go up in a four-passenger plane with an instructor just so I could be sure that that’s what I really wanted. When we were airborne and cruising, the instructor let me take the stick and I did some simple maneuvers. My heart rate was probably at around 200 BPM, my palms were sweaty, and I loved it.

Then I talked to my uncle who works ina aeorspace and he put me in touch with commercial pilots to talk career prospects. And what I found out was far from reassuring. The path to being a highly paid intercontinental pilot isn’t as straightforward as I had hoped. Many times, people who get their degree in aviation as part of a college program will get their private pilot’s license, but then they have to buy seat time on an airplane to accumulate thousands of hours before an airline will even consider hiring them. They serve as flight instructors on the side to earn that flying time, and the money is simply not there. I’m recalling $20k/year being the number that some of the people I talked to threw around.

The alternative to this low-dollar alternative is to join the Air Force and put in hours on the cargo planes and get paid to get those hours. So I went that route. I went to a public school, the University of Michigan, and I did Air Force ROTC during my freshman year. But what I found is that while my eyesight was good enough for a commercial airline, it wasn’t good enough for ROTC, and they wouldn’t consider me as a pilot.  After several meetings with my counselor and her superior and a second eye examination, they just couldn’t clear me to take a pilot path.

At that point I had two options: I could either go to a school that specializes in aviation and then go through the private path, or I could give up the dream.

I gave up the dream.

Even at age 17, I knew that I wanted a certain income. In my case, it wasn’t a certain income to pay off my student loans, since I didn’t have any. In my case, I sought financial stability. I knew I didn’t want to be poor. So I looked around at what program could provide me with financial stability after graduating, and it was a toss-up between the engineering school and the business school. Both listed $50k+ beginning salaries for most undergrads. I tried an Engineering class and decided it wasn’t for me, so I applied to the business school and got in for my junior and senior year. I graduated and got a job as a factory supervisor where I made over $50k/year plus bonus.

Was I high up in the clouds, flying planes? No. I was working in a factory on the night shift from 4 PM to 3 AM Monday through Friday, sometimes even through Sunday. I was donning steel-toed boots every day and leading a team of 30+ material handlers in a desktop computer manufacturing plant. My “cockpit” was a factory and my “passengers” were my direct reports. Adrenaline and excitement were in short supply, but money wasn’t.

I haven’t thought about the decision I made 12 years ago until this past week, since I’ve been confronted with the problem of students graduating with high loans and limited job prospects.

I try to live my life without regrets, but I’ll be honest—a part of me does regret the decision I made. Flying planes really would be cooler than what I do these days. But would I be making as much money? On the other hand, should financial stability ever trump somebody’s dream?

I think it comes down to one’s personal values.

So let me answer the original question. If I’m 17 and I’m thinking about taking out loans to go to school, what should I evaluate?

First off, it’s extremely easy to get a loan to attend college these days—that’s probably why the cost of college is going up so steeply; the banks are giving away the money, so the elasticity of demand for a college education is extremely low because everybody can find the money (typically borrowed) to pay for it.

So, the question is, what does one do with that easy-to-get loan? If their dream aligns with a career that our country desperately needs (e.g. engineering, nursing, etc.) and the expected salary is in profile with the loan, then go for it. I’m not going to explicitly define what I mean by “in profile” here—it’s basically a euphemism for “don’t get so laden with debt that you can’t dig out of it.” Find out what the monthly payments on your debt are, calculate what your living expenses will be, find out what your expected salary will likely be, then determine how quickly you can pay that debt off when you graduate.

Now, if the prospective student’s dream is something that’s not necessarily in high demand and has dubious salary expectations, like the oft-cited English major, then reconsider. I’m not saying don’t study English, I’m not saying value money and income ahead of your passion—I’m not saying do what I did. By all means, pursue your passion. Or you could end up like me.

But maybe avoid studying English at the priciest institutions. Or minor in it and major in something that’s in high-demand. Try starting out at community college and earn some cheap credits, then upgrade to something higher-end.

Yes, you can almost definitely get $100k from the bank to pay for an English degree. But I don’t think you should ask for that much.

(It seems silly to me, actually, that banks don’t require that the student declare their major when applying for a student loan. “Here, Johnny! Here’s $100k to go study underwater basket weaving at UBWS (Underwater Basket Weaving School). I know there are many Fortune 50 companies out there who will be happy to pay you at least $250k when you graduate for your unique skills, and you’ll get a signing bonus and relocation, too. So live it up! The interest rate on your 30-year loans is only 25%, so repay at your convenience.”)

And of course you should be living frugally if you have a loan. Like I said in a prior post, a new car and daily Starbucks are not to be staples of your lifestyle.

Beyond college, there are always trade schools to consider. Or, Peter Theil will pay you to drop out of school and start your own business.

So what would I tell the old me? I was fairly risk-averse back then and I wanted financial stability, and I put those values ahead of my dream to fly planes. Looking back, yeah, I probably should have flown planes. But hindsight is always 20/20.

So if you’re graduating high school, have an honest talk with yourself about your values—what are you passionate about? What gets you excited? And what kind of money are you likely to make if you follow your dreams? Is it enough to pay back your loans with? Can you survive on it? Are you willing to make the sacrifices to live a frugal lifestyle if you’re unable to land a high-income job?

Let’s fast forward and answer the original original question. I’m 24, I’ve been accepted to HBS. What do I do? I do exactly what I did. Average starting salary out of HBS for the class of 2007 was, what, somewhere in the neighborhood of the low six figures, high fives? I would sign. I’d do it all over again. And no, I wouldn’t work a part-time job, no, I wouldn’t spend less money on my wants, and no, I wouldn’t ask for a smaller loan. I’d do it all over again. I wouldn’t skimp on the experience. I wouldn’t go to Europe every weekend, but I’d go on certain trips, and I’d take advantage of certain things, and I’d try to surround myself with my peers instead of going off and working a part-time job. Those two years are critical years for immersion in the MBA program, and trying to aggressively nickel-and-dime it simply isn’t necessary when the starting salary has six figures in it. 

What I would do differently is alter my post-grad lifestyle dramatically. I wrote about that here.

Taking out $100k to go to a third or even a second-tier business school should give the borrower pause. The employment prospects are more of a gamble in this situation—yes, of course it’s possible to land a high-paying job without graduating from the top five or ten programs or whatever, but it’s not as likely, and for that reason, those schools can’t boast of an average starting salary of six figures, so the loan request should be tempered accordingly. A part-time job might be a good consideration, too.

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28 Comments

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28 responses to “Pre-Signing Considerations

  1. Michael Rae Bermudez

    Great job on getting rid of your debt! Sounds like it’s time to a start a new consultation business :) Best of luck to you!

  2. oops my hyperlink attached to my name didn’t work correctly…take care.

  3. Nicole De Leon

    I just wanted to say I appreciate your updates and wisdom. And I can say from personal experiance that im at least 50k in debt after just three years of two different majors, just to come to the realization, I hated what I was doing. Now I am going to go to MMI (motorcycle mechanic institute) to pursue my real passion. DIRTBIKES! And then one day I hope to run and own my own dirtbike track, which will happen but not till I am much older. But I just want to encourage everyone to fiercely chase your passion in life and make it happen! Otherwise you could end up in debt and have a career that doesnt float your boat!

    Thanks for your advice,
    God bless :)

  4. Charles B. Smothers III, MBA

    I appreciate your blogs, comments and posting and I, agree that you can’t be a advocate for all individuals. Also, I truly believe that people are a victim of their own circumstances, and with that being said those individuals that constantly complain have to want change/positive things to occur “First” regardless of the cards dealt in life! Basically, it does take time to make accomplishments/milestones in ones life, but too many individuals want instant gratification without putting in the long hours of hard work on a daily basis. Finally, I am one of those readers whom wouldn’t mind have a copy of your spreadsheet, but I do not have your inbox to request one, but I am hoping this comments triggers a reply via my personal information I provided for this post.

    Congrats on your “The Challenge NMHD”!

  5. Heather R

    I can totally relate to having a passion for one career that would pay next to nothing and wanting a job that pays better. My scenario was that I always wanted to be a marine biologist. I finished my Associates degree and then transferred to a state school that had a great marine biology program. I quickly found out that it was really difficult to juggle a full time job and full time school that had difficult science and math classes involved, only to graduate with a degree in a field that didn’t have many jobs and didn’t pay much. After a lot of heart-wrenching thought, I decided to get my Bachelor’s degree in Accounting and as my boyfriend pointed out, I can always make enough money to take vacations to places where I can scuba dive. I see that as a win/win situation. Since you have a good job where you are making good money, maybe you can still do what you’re passionate about and get your pilot’s license but do it as a hobby instead of as a living. Won’t it be more exciting that way anyway? You won’t feel like it’s your job but it will still be your passion? I think that sounds like a win/win too…

    • Trinidad

      As a private pilot, I can tell you that Heather is totally right. My instructors were really and truly broke, and at least two that I know of have gone through bankruptcy procedures. The guys that fly do it because it is one of the things they love most in the world. But flying isn’t all adventure and adrenaline. Mostly, it’s slogging it out, dealing with impossible schedules and employers that simply don’t value your talents, possibly because they never see you.

      However, I would really encourage you to get your private pilot’s license! It’s an amazing experience, and although expensive, totally worth every penny. It also makes for some pretty awesome dates lol. And I’m pretty sure you can fly year-round in Austin (although your summers get pretty hot.)

      If you really want to get inspired/have your mind made up for you, make the trip up to Oskosh, Wisconsin this summer for EAA Airventure. It’s a full week of nothing but planes, with nearly every aerobatic and military display in the airshow circuit. There’s nothing like it.

  6. Donna

    Can you please email me your spreadsheet?

  7. REALLY glad to see you post again! Happy that you didn’t leave us hanging…I’m hoping to see you tackle your mortgage next! :) I was trying to go back through your posts to find your email but I’m not able to find it yet. Can you email me please at iowenomore@yahoo.com
    I’d love to know where you got your header. If it’s ok to copy you again. Your spreadsheet is scary looking but I’m willing to give that a shot too.
    I know..I know..I am soo needy in this project! You’ve already given me the kick in the butt I needed to pay everything off before I retire.
    If I were to write a letter to my 22 year old self…I’d have to chisel pictures onto stone.;)

  8. Brian

    I agree in your overall message, that It’s not the wisest choice to have your student loan debt exceed the yearly income you’d except after graduation.

    $110k Harvard Loan seems high, but it’s aligned with the yearly income you’d expect after graduation.

    Glad your conscious is still dragging you back into whatever your story and blog is spinning off to. You have an audience, hope you’re able to capitalize on it whether it’s through a book, your expanding this blog into helping others.

  9. yissell

    I feel a little cheated since I started reading you blog just when you had finished your journey. I’ve been looking forward to reading your blog as you speak to me in a tone I can relate. I do have to thank you because in one week you have dramatically changed my perception of debt. I make an excellent income as a doctor but have also spend it on buying for things that people consider extravagant. I was the kind to pay for my debt, but prior to NMHD I never saw student loans as a bad debt..don’t ask my why. I first read you blog on Sunday May 20. I looked at my loans that night. It had gone from 85 K to 81 K in almost 5 years of paying on a monthly basis 450-600 dollars. In the last few days, my loans have drop from 81K to 65 K. All because you changed my mindframe about debt, student loans and what’s needed. I’ve committed myself to no more spending, home repairs, restaurants or hosting all inclusive parties for my friends and family until this debt is pay off. I might add, that my husband has been unemployed for one year and have two kids to support as well. Please continue to write and help me (us) change from being materialistic individuals who just live to work.

  10. Congratulations! I did this with my credit card and medical debts in the 90s. I refuse to buy anything on credit. When we sold our last house for more than we paid but way under market value, we walked away with money in the bank, since we had done everything on that house out of pocket. People think we are crazy but we just smile, zero credit card debt… now we need zero mortgage! You’ve inspired me to do that next!

  11. stacy

    Great advice! Maybe some banks will read this and take into consideration the point about granting loans in excess regardless of degree sought or school reputation/credibility.

    Oh and just had to comment on the great irony of your statement, “But hindsight is always 20/20.”

  12. Jay

    You’re one hell of a man, dude. I doff my hat to you. Been reading this blog at work for the past 3-4 days (yeah, I am quite productive, I know). I earn around the same as you do and have a 12K debt (bought a new car last year) which I now plan to pay off in the next 5 months instead of the 24 months planned before. Would require some crazy shift in my life style but after reading your blog, I am totally willing to do that.

    So, 12K debt – F#%$ you and you’ll be gone in 5 months.

  13. I completely agree about asking prospective students about their majors before granting loans. Although I suspect a lot of people would just lie to maximize the amount they could borrow, it might at least make 17 year olds think twice about *why* a bank might not want to loan them $100k for an art history degree, etc.

    One note about starting salary data–there has been a lot of controversy about inaccurate data in the past couple of years, most notably for law school data. Make sure you do your own research. Try talking to recent grads in your field, talk to people who live in the region you might want to live in about job prospects and living expenses, and don’t just trust the school’s website or magazine articles about the “best” careers. It’s a lot for a high school student to do, but borrowing a large sum of money is a very adult choice!

  14. So glad that you are writing again! I love reading your posts and that you are so bluntly honest. I particularly like that you mention a need to look at how much you are borrowing, what you are majoring in, and what you can make. There needs to be a balance between your passions and reality. I think too many people see university as just a chance to indulge their passions, and don’t think of what they are going to do when they are done. Basket weaving may be fun, but it’s certainly not going to pay off huge student loan debts.

  15. Katy Trotta

    I definitely feel this post. I have about 20k in undergrad loans in which I regret. I thought the school I went to had a little more weight to its name, but there was a change in the last year I went there and now has a bad reputation.

    Saying that, I’m considering taking on a huge amount of debt as well to get my Masters in Forensic Psychology and PsyD in clinical psychology (Think Dr. Reed on Criminal Minds). The first year I’m going to need to take out considerable living loans as I get established across the country moving from L.A. to either D.C. or NYC. I will be getting a job and trying to pay down my credit card debt from poor choices as a youngster (I’ve already paid off 2 cards and I’m working on the 3rd before I hopefully start school in August….still waiting to hear). Anyway, I’m considering big name schools with a lot of clout in my field and a lot of school 5-8 years depending on how I do the doctorate. But the jobs I’m looking into pay a 6 figure salary as well (God bless overpaid government workers with a private consulting practice on top of that).

    Most of my family and friends think my path is ridiculous. They don’t understand that in order to get where I want when I’m 40, my 30’s are going to be tough (I’d be starting my masters at 28 years old if I start this year).

    I’m very thankful for your blog. It’s given me the boost I need to know that although I’m going to be swimming in debt for a time and live on a modest living and means, I can and will pay it off and that it will be worth it and have the lifestyle I want in the future.

    • Jill

      Hi Katy,

      A word of caution if you go for a doctorate in psychology (Psy.D. or Ph.D.) – it’s taking a lot of people longer than they’d planned right now because of incredible growth in the number of students in the field and not-so-incredible growth in the number of internship positions available nationally. I’m about to start my internship next month and will finish my Psy.D. in 2013, but I had to take an extra year of school to do so (and I know plenty of people who had to take even more extra years). When you’re applying, please make sure you ask the schools about their rates of matching for APA-accredited internships, and how they help you get one. I go to a well-respected school with a big name and they have not dealt with this well. The situation is at a crisis level nationally – there are only enough APA-accredited internships for just over 50% of the students who apply for them every year. And you need one in order to graduate.

      Sorry to stand on the soapbox – but I wish I’d had this information when I started school – I probably would have made a very different decision about whether to go ahead and do it.

  16. Sheila

    Hey there, so I discovered your blog on trending on my facebook page last week, and I’ve read the entire thing in a couple days (it reads like a good book- you should definitely make it a book!). I could really relate to your story from the Kaplan training (I tutor part time for them) to my counselor in high school telling me my GPA wasn’t good enough to get into the UC’s in CA (I ended up getting into a top UC college). Basically your blog resonates with me because I’m about to take out a 160,000k loan for Optometry school (It will probably be 200K with the 6.8% unsub interest). I am passionate about Optometry and it’s always been my dream to be a doctor, but from internet forums, it seems like the job market has fallen and I’ll be looking at around 80K before taxes. I’m going to go through with it and I want to thank you for your inspiring blog and for the tips about living frugally (I spend a ton of money at bars too) and that paying the loans back is possible with the right mind-set. If you have any specific advice for me (I know you’re super busy!) then feel free to e-mail me :)
    Cheers!

  17. “But just like I’m not a professional financial guru, I’m not a trained psychologist, either. So read my advice, but keep in mind that you might be getting what you pay for!”

    This is why you resonate so well with your readership. You’re not shouting at them with gimmicks, and you’re not gaining anything financially by doing this. And, most of all, you’re speaking from personal experience. They know this and they trust you. Clearly, this is a topic that new adults are facing daily and it’s serious.

    Amazon has a KDP publishing program that reaches a large audience. You might want to check it out. If you could offer this advice, on your own, in an affordable e-book you’d be helping a lot of people who aren’t familiar with this blog. I’ve done it, after years of working with publishers. No regrets at all. And I am in no way affliated with Amazon other than this, so I’m not plugging or promoting them. I just don’t think I’ve read a blog that has resonated so well with readers ever before.

  18. JSP

    Four years ago, when I folded my business, I was about $285,000 in debt. I owed $85,000 in credit cards, $73,000 in student loans, $90,000 to investors, $17,000 to the IRS and $20,000 to my parents. I had about $1,000 (if that) to my name. Probably about as low as one can go. From that point on, I vowed to change everything around and become debt-free. During that time, I did lose my wife to a divorce, my house to a foreclosure and got fired from one of the several jobs that I had. I negotiated with the credit card companies (13 cards!) and paid them all off with $22,000. I worked with the IRS and knocked it down to $7,000 and that is now paid off. I worked the investors and settled on $20,000 of payments and that is now paid off. Now, I have $3,000 left to my parents and $49,000 on my student loans. During that time, I worked hard and had to move halfway across the country to work. My yearly income ranged from $65,000 to $85,000 from my job. I ate a lot of PBJ sandwiches and cereal and delayed any big-ticket items. I sacrificed a ton of stuff. I am expecting to pay this off on Nov 2013. I wish I had written a blog to archive my adventure. Thanks NMHD for inspiring others regarding their finances and good luck to everyone out there trying to become debt-free. It can be done!

  19. Santiago Manfredi

    I wanted to thank you for taking the time to write about your journey. I’m starting an HBS MBA in August, and you have no idea how much you’ve helped me and my wife with your experiences and thoughts.
    Best of luck in your future.

  20. Thanks for sharing your journey and congratulations on paying off your debt! It must feel great. I wonder if you have any thoughts of going back to your passion for flying planes at all now that your education is funded and your financial burdens lighter. I recently wrote a book (Money On Purpose) on the subject of money and in it I discuss the “Investment of You” and some of the dangers of going to school to make money. I’ve shared your video on my page in the hopes that it inspires others as well. I hope you don’t completely give up on your dream. Even if just for fun. . . .The world might just need a pilot like you. All the best in what’s next for you.

  21. Thank you for sharing your story. It is an inspiration to myself and others. I look forward to reading your post as you continue to answer questions from your readers.

  22. Thanks for shareing your story. It is inspiring to myself and so many others. I look forward to reading your post as you respond to the questions from your readers.

  23. MJ

    The crazy parents thank you for illuminating the importance of the education experience as a whole, not just the academic aspect. You’ve added balance to the dinner table conversation around financing an education.

    Seems to me that you are already flying high; my wish for you is that someday you are the pilot in the airplane of your dreams.

  24. AMS

    I really liked what you said in your last post. I recently graduated from an Accelerated Bachelor’s in Nursing program at Duke University (which is structurally similar to a graduate degree program). I was in a similar situation as you with my own parents-they covered undergrad, and I knew that graduate school would be up to me. So when I decided to get a second bachelor’s degree in nursing, I knew I would foot the bill. I borrowed money from my own parents to pay for my tuition and took out a small government loan to cover living expenses. Before I borrowed money from anyone I calculated what I would most likely be making post-graduation and established a plan for myself to be out of debt within 4 years.

    During my final semester at Duke when the discussion about student loan debt began I was shocked at how unprepared some of my peers were. Many had already incurred debt from their undergraduate studies, and then added on more during their time at Duke, many in my program were graduating with well over $100,000 in debt, whereas the average starting salary for a bachelor’s prepared nurse is about $49,000. However it wasn’t the debt to income ratio that really surprised me, it was my peers’ attitudes towards their debt. I heard many comments such as “well how do they expect me to pay that back,” and “wait I owe how much?” It was as if they had no idea that back when they signed on the dotted line that meant that one day they would be paying back every penny in addition to interest.

    I think that part of the problem is that people are deemed “eligible” by lenders to borrow much more money than they will be able to reasonably pay back, but the bigger issue is the student borrowers who don’t truly consider the reality of their situation. Higher education is incredibly important, but living within your means is too.

  25. I was accepted to a post grad program at Columbia School of Dentistry in July 08. Tuition n fees was $76k/yr for 2 yrs.I kept postponing and chickening out for 1.5yrs till I lost it and got into a vicious cycle of applications for 2 yrs which were the most stressful of my life. Tomorrow is the first day of my residency program at the University of Maryland. The minute I got the acceptance letter, I was happy to take the $50k/yr loan (was offered $86k) but I could initially cut on many aspects listed and w a little help from family. Bottom line: Get any amount of loan if you’ll be studying in a high demand field. Thanks for sharing with us.

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