aidandj

iTrader: (5)

Direct federal loans are 3.75%
Perkins loans are 5%
Wells Fargo Private loans range from 6.49%-15% (depending on credit score)

ridethecliche

iTrader: (2)

Refraining...

calteg

iTrader: (18)

Never said they were. My comment was directed at the fact that your education can't ever be taken away from you. Unlike a car loan, where the secured asset depreciates, or a home, which may increase or decrease in value. Still not the right move for everyone, but there are an awful lot of financial "gurus" (looking at you Dave Ramsey) screaming that all debt is bad debt, which is idiotic and unrealistic. It's sweeping generalization that seems to have caught on, because it's a much easier mantra than "I need to exercise fiscal responsibility and self control."
</thread hijack>

Monk

iTrader: (3)

No it isn't. Being able to afford payments on things is not the same as being able to afford something.
With the exception of grad school, there is no good reason to take on debt to go to college. Just like your degree, the debt is something that can never be taken from you (ie. bankruptcy).
In the case of the young man we are addressing, I think the absolute best thing we could be counseling him on, is being wise with money.
Save now, regardless of what career or school path you choose, and learn how to manage a budget and cash. If you don't figure it out now, it will absolutely bite you in the *** later.

Padlock

Maybe the 3.75% rate is decent to work from for now, but who's to say it will stay there? I wouldn't bank on it (no pun intended). historically federal loans have fluctuated a lot, we'll see what direction Trump takes things
FinAid Loans Historical Interest Rates

As said before, sure nobody can take your education from you, but there's no quick way to relieve your unsecured debt either. Example: Make a dumb mistake with buying a car out of your budget and you can sell the car to pay off all or majority of the loan. Make a dumb mistake with your education loans and have fun with paying the feds interest half your life. There are ways to lead a debt free lifestyle if you're smart about it. About the only realistic debt anyone should have to carry would be a mortgage, but most look at that as a long term investment so I'd consider that an exception. Cash is king, but maybe I'm in the minority here with that thought.

MartinezA92

iTrader: (4)

Except you can pay off a debt. You've really only named a worst case scenario.
Given the option of being in debt and having a (useful) degree or not being in debt and not having a degree, I'll pick having a degree everytime. A lot of people just can't realistically pay their way through insane tuitions or crazy housing prices. I make a decent salary and I still have to take loans because of housing prices around here. I do put a hefty dent in my loans by paying them a couple times a month but I couldn't do it without loans

I also don't agree with the sweeping generalization, fiscal responsibility and self control has worked out well for me. My only debt is my student loan which is more than worth it.

shooterschmidty

The aversion to debt at all costs is a seriously limiting strategy. Debt is a tool, and like all tools, it can either be used to build or to destroy. I'd rather not further derail this thread, so suffice it to say that I believe that debt incurred to get an education is usually worth it. That's not to say that you should go out and spend $50k a year at a private liberal arts college to get a degree in music, but smartly employed student loans will more than pay for themselves.

I encourage you to look into some of the opportunities the military offers. If you don't know what you want to do with your life, or if you're not a great student, enlisting can be a solid way to go, with the caveats that others have mentioned above. If you have strong standardized test scores and decide that you definitely want to go to college, I'd recommend that you look into ROTC. ROTC allows you be an an (almost) normal college student and then commission as an officer upon graduation. They typically offer good scholarships (depending upon their need for your chosen degree) in exchange for a four year commitment after graduation. I personally took the ROTC path and received a three year scholarship which, in conjunction with some matching financial aid from my school, allowed me to attend an expensive, relatively prestigious, private engineering school for a very affordable cost (~1/2 of first year's tuition).

As others have stated above, the military isn't all good and you should be aware of some of the downsides. While you're in the military owns you. They chose where you live (and a lot of bases are in craptacular locations), when you move, what you wear, and to a sometimes scary extent what you can do on your own time. It makes it impossible to put down roots and can make it more difficult to have a family (although many do). On the plus side, you'll gain valuable experience (choose a career field with a civilian equivalent) in a field that can't be outsourced to non-US citizens. Also, and this shouldn't be minimized, you'll have the opportunity to do and see cool stuff while working with some amazing people (your mileage may vary depending upon service and career field). I'll leave it at that for now, but if you have any questions feel free to PM.

samnavy

iTrader: (7)

^Also don't forget that if you can squeeze a rating that gets you a security clearance, it'll be a huge bonus for after... doing 5yrs enlisted and getting a TSCI with guaranteed free college after and a bonus clue about the field you want to get into so you pick an actual useful major is a big deal.

shuiend

iTrader: (24)

Clearance is only helpful if you want to live somewhere that gets military contracts. It can be a huge plus though if you are in certain fields. Back in 2010 Charleston was full of IT jobs that needed a clearance. In 2017 the landscape has changed and military contracts are no longer a big part of the IT sector, so a clearance is less useful.

​​​​​​​But yes if you join the military I would try to get one anyways just to have in case.

Monk

iTrader: (3)

Chlamydia is curable too, but it doesn't mean it's wise to get it.

You're acting like it has to be either or. It does not.
I am aware that there are reasons that people take out school loans that some could consider justifiable, but it usually isn't necessary. If someone wants to start another thread to argue about debt, I would be happy to say more.
In the case of this particular individual, who has no clear goal yet, school debt is a bad idea. I am simply cautioning him against it, at the very least, until he figures out what he wants to do.


I did this and it paid off eventually.

OP, here is my story if you are interested.

Out of high-school, I went to community college for one semester.
Halfway through that first semester, I realized I was only there because people were telling me too, and I enlisted in the navy.
I knew I wanted to be an aviation rescue swimmer, so I picked the corresponding rate and made sure it was in my contract.
Note: just because you pick a rate, does not mean you are guaranteed that job. You must still pass whatever schools are required, so make sure you pick something within your capability.
I watched 90% or so of my peers go to some other rate, or worse, become undesignated because they couldn't pass the schools.
I made it through my roughly year and a half of schooling and graduated as the honor man, which meant I got to choose where I would be stationed.
I picked San Diego, and I chose a squadron that had a focus on special operations because that is what interested me at the time.
I ended up becoming a crew chief as well, and spent the remainder of my last five years doing really awesome stuff.
After nearly taking a dirt nap for the umpteenth time, I decided that I would finish out my enlistment, give civilian life a try, and actually see my wife for more than a month or two a year.
I don't regret a second of being in the military, but it was time for me to move on.

Because I did not pick a military job with a civilian equivalent, I had retrain.
I moved back to my home state and used the GI bill to get my EMT and Advanced EMT certifications, which was good experience but embarrassingly bad pay.
As soon as I got a job on an ambulance, I finished my associates, which landed me a well-paying job in a research lab.
I talked the lab into letting me work reduced hours so that I could finish my bachelors at a Purdue satellite which accepted all of my community college credits.

When I was settled in with a nice routine, I realized that I missed having a little action in my life, so I took a hard left turn and got a job as a full-time firefighter.
Due to the competitive nature of the hiring process, I would very likely not have gotten it without my military experience.
I managed to keep the research job as a part time gig as well, and my bachelors will likely ensure that I receive a promotion or even the position of chief in the future.

My one and only regret during all of this? I stupidly took on debt in the last two years of getting my bachelors because I wan't willing to spread it out over an extra year or two or change my lifestyle.

Anyway, good luck to you. If you have questions about anything I posted, feel free to PM me.

ridethecliche

iTrader: (2)

If you'd spread it out over a year or two, you would have used up time. What are two years of your life worth? If the education was worth it, i.e. if you picked the right field, chances are that working for two years would have offset a good chunk of the cost and 2 years work experience would have made you competitive for more advanced jobs in the field.

There are costs to everything. You might have done well with the money side of things, but you're not really taking the time you 'spent' into consideration.

You legitimately decided to change your strategy and interests a half dozen times.

Debt is not bad if you're playing a long game. If you're going 200k in for a psych degree (no offense) from a private school giving you no money, then you're going to have a bad time especially if you're not planning on using the degree for anything. If you bust your *** in high school, schools will throw money at you to help boost their averages on GPA/SAT.

If you're just going to school because that's what everyone is telling you to do and you have no idea what you want to do, then you're often better served taking some time off and figuring that out while taking classes. College won't teach you jack about most vocational trades. A lot of folks interested in those end up going to college because that's what everyone tells them. It's also why tech high schools are awesome.

fooger03

iTrader: (2)

In high school, I was with an Air Force Junior ROTC program. I graduated top of my JROTC class (which isn't saying much), applied for Air Force Scholarship through JROTC, was awarded 100% tuition to any school with an AFROTC program conditionally in the degree field of meteorology (Gawd that would have been a f*cking **** Air Force Job) Within a month of being awarded the scholarship, I had no fewer than a Dozen unsolicited letters from schools all across the country stating that they would match the Air Force's 100% tuition scholarship with a 4-year school scholarship covering 100% room and board - literally I could have gone to any of a dozen well-respected universities for a 4 year bachelors degree in atmospheric science for absolutely zero costs. The only condition being that once I graduated college I would have a 6-year commitment as an active duty Air Force officer - no really, not a bad gig at all.

I'm an introvert - and not just any introvert - I'm a strong introvert - I don't make new friends easily and I tend to hold on to the ones I have. I just couldn't see leaving home for 4+6=10 years at a minimum. Instead, I joined the National Guard when I hit 17 1/2 year old. In Ohio, the National Guard pays 100% tuition to any state school.

Took the ASVAB - had 212 career fields available to me - decided to be a field artillery fire direction specialist. During the physical, found out I was red/green colorblind - had 3 career fields available to me - chose to be a radio operator.

Once in college, I was earning my 100% tuition scholarship, my drill pay (1 weekend/month for a few hundred bucks), the Reserve forces Mongomery GI Bill ($272/month) and a GI Bill "Kicker" for my career field ($200/month). After a minor scholarship from high school, pell grants, university grant, etc., it was just enough to meet all of my college bills - not bad for 1 weekend's work/month.

Joined Army ROTC my junior year. The GI Bill kicker increased to $350. Also started receiving a "stipend" of $400/month for ROTC. (I believe they even get a massive "housing" addition nowadays).

Graduated, Commissioned as a new Lieutenant into the Ohio National Guard (No active duty commitment). Still get to kick around home.

Now, many years later, still an officer in the Ohio National Guard. I did end up taking loans for school stuff in my Soph-Senior years - but the grand total was ~$8k. I think as of this month, I still have a total of ~$110 left to pay - 2 more easy payments away.

Overall, it was a great program for me. Essentially paid for college - any degree field of my choice - and came out of it as a military officer - which is a very respectable thing. On any given weekend, you might find me either out at my Guard unit, in charge of 180 fine Soldiers and their equipment, or at home, enjoying a fun day with my parents, best friends, or nieces.

For me, it's a best of both worlds scenario.

Monk

iTrader: (3)

In my case, it would have made no difference at all, which is why I said that I regretted not doing it that way.
As I also said, I could have just changed my lifestyle a bit and done it in the same amount of time.
This is what trips up most college kids now. They want the same standard of living as they had when they lived with their parents.
Otherwise, you are right that the debt could be offset by higher wages. The truth is that the vast majority of people who take out debt do not offset what they owe and end up buried by it.


Yep, I changed things up once after the military in deciding to become a firefighter, but the goal was always to work in R&D, which I still do. Starting over life from scratch without the support of your family has some interesting challenges.
The EMS thing was a way to earn money while going to school. Unfortunately, it doesn't actually pay worth a damn. Hard lesson learned.

While we disagree on how much debt a college person should have and when it should be taken on, I think we all mostly think the same way about this.
Useless degrees are a waste of money any way you look at it.

ridethecliche

iTrader: (2)

Yup, we agree on more than we disagree on. I completely agree that people go into college thinking that their interests will allow them to do whatever they want without looking into the market. The beauty of it is that you can study something that you like which has further opportunity, while also studying something you enjoy. That's why double majors and minors exist...

I actually wanted to apply to the air force academy when I was in HS. I wasn't a citizen at the time though. I didn't know it was an option at the time to apply without citizenship haha. It's probably for the better though... I ended up having health issues that probably would disqualify me from the military. I thought about it when I got into medical school.

Edit: Monk, I will add that I'm likely going to be about 200-300k in debt after I finish grad school and it ******* terrifies me. The only way I've been able to rationalize this is to promise myself that half my salary from my first real job is going to go towards paying this **** off no matter how much temptation there is to live like a baller. It's definitely a delayed gratification type of situation...

fooger03

iTrader: (2)

My best friend was a straight A student in high school. Went to college on a full ride air Force scholarship - engineering. Learned about counterstrike in his first quarter. Became exceptional at owning the rest of the dorm. Was put on academic probation when q1 grades were posted. Continued to be exceptional at counterstrike. Was dropped from the ROTC program after Q2 grades posted. Immediately dropped school, got an apartment, started working at the local grocery chain then the wholesale club store, made it to assistant manager, left for a bank hq office after his retail management career stagnated. Supervised the call center and now manages some intranet application development. He has complained for the last 12 years that even though he is a superior performer to most of his co-workers, he is discriminated against for pay and position because he doesn't have a college degree. Having known him for probably the last 16 years, I don't deny that he is probably a top performer. Indeed, he has risen very quickly in the ranks everywhere he has been to a lower management position. At the same time, it's also perfectly legal to "discriminate" based on education, and had he completed college (while maintaining the same work ethic), I think he would be easily bringing in 30-45% more income. I'm quite confident at this point that he'll never go get a degree, but he'll always be well behind the curve for the type of work that he does because of it. When it comes to filtering resumes, education is an easy way to throw half of the stack in the circular file, and when it comes to negotiating salary for a promotion, it's an easy way to justify a filling a higher job at the lowest available pay rate.