Debt vs. Longer time to get degree

[Angry Citizen]

though, I think you said it'd take 3 years to get through school, that seems too low

From this point forward (although I should have said 2.5 years and made myself more clear).

You could wait 1.5 years longer and make that same amount of money AND have no debt.

Eh, it's really not necessary in my case. One reason why I don't bank on being out of college debt-free is because the path I would choose to do so - namely, co-op programs - is hard to get into. According to my school, the average salary for co-op programs is 3314/month gross. If I could do that and extend my education an extra semester, I'd be happy to do so. Better than working a job I'll leave the moment I graduate, in my opinion. And if I don't get into it, so be it. Let there be debt.

You have been living like a broke college guy, right? When you get out, continue to live like that until you have paid it off.

*thumbs up* That be the plan, hombre.

 

[Angry Citizen]

Yeah, sure. Welcome to the real world. You're young and you think you are invincible. You'll find out sooner or later that you're not.

So presumptuous. I spent my first week at university in the hospital finding out I was about to die from undiagnosed type one diabetes I'd hazard I'm slightly more aware of my mortality than you think I am. I just don't think I need to go through the hassle of planning for the unplannable. If I'd done that with regard to my diabetes, I wouldn't be in college right now (long story).

 

[lisab]

Diminishing Returns, Robert. I agree it's best to avoid debt, but to become an anti-debt nazi will simply end up hurting you more than it will help you. It's okay to take some debt, just aim to minimize it and think of the future.

I agree. And I went through school on the 9.5-year plan so that I can avoid debt - it worked out OK for me. Even so, I don't advocate the "Debt is evil - no debt, ever!" point of view. Everyone has to weigh the risks. For some, a bit if debt is manageable - like one poster mentioned, if it's a safe bet that you'll make a good income with the degree you're financing, then that should be considered.

In fact this kind of risk analysis will come up over and over again in one's life - there will be lots of times you have to make a decision based on very limited data. Better get used to it.

 

[Vanadium 50]

I think lisab has some very good advice.

First, there are very few absolutes. Would it be worth going a dollar into debt to shave a year off college? What about a million dollars to shave a minute off college? Clearly there is some line in between: on one side it's worth it, and on the other it's not.

Next, I went into debt for college. I would estimate about $25K in today's dollars. I think it was the right decision for me, although not the right decision for everyone. It was paid off about two years after my PhD.

Finally, debt is a financial tool. It can certainly be misused, but that doesn't mean it's always bad.

 

[Hobin]

Where I live, you're pretty much doomed to take a loan if you want to finish your undergrad education. You see, education is partially funded by the government, so you get a hefty fine if you take more than 4 years to get your degree. In other words, there's little point in 'taking an extra few years to avoid any debt.'

If you're majoring in, say, English literature, this isn't so much of a problem. I know plenty of people who have a job and are still able to get good grades and have a social life. In the sciences and engineering, not so much. It's practically impossible for me to work enough not to have any debt AND maintain good grades in uni AND have a social life (and I'm not even that much of a partygoer). I would very much prefer a debt to sacrificing good grades or my social life.

This may of course only be the case where I live, but it's still something to consider should you definitely want to finish your degree in X years.

 

[SophusLies]

I really liked Vanadium's answer. By the way, Vanadium, what kind of work did you do straight out of grad school? Only 2 years to pay off college debt is impressive. I'm guessing industry?

I personally can't stand debt. My mom raised me with heavy debt and I saw what it did to her. It's very stressful. For me, if I didn't get a full ride then I wouldn't have gone to school for the sole reason of not collecting debt. In my opinion, if you get a degree without debt then by all means do it. If you're very confident that you'll be able to find a well paying job and comfortably pay the debt off then that's fine too but in most cases that can be unpredictable.

 

[twofish-quant]

Would the latter option be worth the wait, considering the pros and cons of both?

I think people are a bit too focused on the debt issue and not looking at question which I think is flawed.

I don't see how a few extra years doing physics engineering is going to help you. You could go to a cheap school and do straight physics. If you end up with decent grades and recommendations, then you get into graduate school for your Ph.D. Physics graduate schools don't work via the "tier system" and in any event I don't see how spending extra years in another major is going to improve your graduate school chances.

Conversely, I don't see how taking physics engineering now is going to help you. Also, if you spending a ton of money and do badly then you are hosed.

What makes sense to me is to take a nearby cheap school with straight physics, and then look at your options once you finish that. If you do well, then you can apply straight into a graduate program.

 

[twofish-quant]

FYI. I had roughly the same experience as Vanadium 50. I ended with about $20K undergraduate debt which got paid off very quickly once I got my Ph.d. It helped that the debt was deferred which meant no interest/no payments while I was in graduate school, and with 0% interest and 3-5% inflation it was an excellent deal. 3% inflation deferred for five years means that you are getting a 15% discount.

Also we both went to the same undergraduate university which was really expensive but ***well*** worth it.

The one thing that I got which was worth the high tuition was an e-mail account and access to the internet. That might *sound* silly, i.e. why would anyone pay tens of thousands of dollars a year for internet access, but this was in 1987, and one reason I got a job quickly was that when the internet revolution hit in the 1990's, I was one of the few people that had real experience with the internet.

 

[twofish-quant]

One other thing, before making a decision, make sure you've researched your options. Since you mentioned CUNY, a quick google search shows that CUNY has an Engineering physics program...

http://www.apsc.csi.cuny.edu/csiengdp/startpg/index.html

And SUNY Stony Brook has something like that

http://www.matscieng.sunysb.edu/undergraduate.html

 

[ParticleGrl]

It obviously depends on what you want to do. 3 years of deferred salary can be quite a lot.

Personally, I worked jobs through college and still had to accumulate about 37k in debt by the time I graduated. Half was government loan, but half was private. By the time I finished grad school, interest had accumulated and I had about 50k in loans. I managed to pay it off in about 1.5 years of bartending after I finished my phd.

 

[Vanadium 50]

No, I was a postdoc. But I did work in industry before starting grad school, did some side work during my first year in grad school, and lived frugally. $25K in today's dollars is a lot of money - but it is not an unattainable amount of money.

 

[etudiant]

Avoid the student debt!
It is unlike most debts in that you cannot get rid of it even if you go bankrupt, it is a millstone around your neck you cannot shed. Note the debt is still there even if you drop out or have to quit college for some emergency.
You will just poison your future with this burden.
Stay debt free.
It allows you the option of doing something interesting when you graduate rather than being compelled to take the best paying bad job just to service the debt.

 

[PhizKid]

I think people are a bit too focused on the debt issue and not looking at question which I think is flawed.

I don't see how a few extra years doing physics engineering is going to help you. You could go to a cheap school and do straight physics. If you end up with decent grades and recommendations, then you get into graduate school for your Ph.D. Physics graduate schools don't work via the "tier system" and in any event I don't see how spending extra years in another major is going to improve your graduate school chances.

Conversely, I don't see how taking physics engineering now is going to help you. Also, if you spending a ton of money and do badly then you are hosed.

What makes sense to me is to take a nearby cheap school with straight physics, and then look at your options once you finish that. If you do well, then you can apply straight into a graduate program.

I was under the impression that graduate schools take into account your overall cumulative GPA, which, if you include my failed years at my first two schools, would drop my overall GPA by a lot. I thought by taking more classes, it would average in the higher GPAs thus bringing up the overall GPA so I won't automatically be rejected from top schools even if I have good research experience and letters of recommendations.

I chose Physics Engineering simply because I enjoy the subject of both Physics and its applications for engineering it.

 

[Angry Citizen]

It is unlike most debts in that you cannot get rid of it even if you go bankrupt, it is a millstone around your neck you cannot shed.

You.. could.. pay it...?

 

[twofish-quant]

I was under the impression that graduate schools take into account your overall cumulative GPA, which, if you include my failed years at my first two schools, would drop my overall GPA by a lot. I thought by taking more classes, it would average in the higher GPAs thus bringing up the overall GPA so I won't automatically be rejected from top schools even if I have good research experience and letters of recommendations.

This isn't the case. Admissions committees generally don't work with mechanical measures precisely to keep people from gaming the system. If you have a good/bad application at the end of your physics degree, simply taking extra courses to boost your GPA and for no other purpose isn't going to work because the committees will see through that and will ignore it.

Also physics Ph.D.'s don't work through a tier system. Something to remember is that the number of physics Ph.D.s that get issued by all schools in the United States is roughly the same number of MBA's that Harvard Business School alone issues each year. That means that if you can get in *anywhere* then you are part of a elite. Conversely, it's hard enough to get in *anywhere* that you'll have to work hard to get any admissions from anyone.

I chose Physics Engineering simply because I enjoy the subject of both Physics and its applications for engineering it.

You might want to do some research to see what each school does. It's possible that you'll get whatever it is that you like only they won't call it physics engineering. Also, I've found that being flexible with what you like can save you a ton of money

Bottom line, here is that the choice that you are making doesn't seem to exist. If you plan to go to graduate school, I'm not seeing the benefits of going to a more expensive school, and if you go to a cheap school, that's not going to increase the time to get the degree.

 

[lisab]

You.. could.. pay it...?

Lol, that was my exact thought

 

[sweetpotato]

The thing is, you also have to weigh in your personality/preferred lifestyle. Some people would lose all motivation to graduate college if they spread it out over 5+ years, in which case maybe incurring debt is a better choice for them. Some people, like me, found part-time work during school to be meaningful and positive, some people would find it just distracts them from school. Some people find doing ROTC a worthwhile endeavor and good way to pay for college, some people can't consider themselves doing military service. You have to take your personality into consideration.

 

[SunnyBoyNY]

Debt is unfortunately unavoidable for most people. Unless one wants to live in a rented apartment and decides not to purchase a car then one won't get in debt.

I speculate that the main point is not to get in excessive debt. Paying for a good graduate school is alright (i.e. top ten law schools - 200k) because you know that the debt will be safely paid off in a few years. Paying 150k for history major in a good private undergraduate school could be an example of unreasonable debt.

The debt amounts guys here mentioned are somewhat amusing. At my work, probably all junior engineers (we have a few mechies, a few electricals, and a physicist) start around 60k. Thus, 20k can be paid off in one year with little interest.

Also, some people mentioned working full/part time during studies. While working is generally a rewarding activity, diverting too much time to a low-paid job might prove detrimental to one's future. We have a nice young PT person who is just about to finish up his bachelors in EE. Instead of focusing on the important courses such as Calcs / Electronics he flew through them with somewhat shaky "understanding" of the topic. He'd have done much better if he'd decided to work less and focus more on his school (and yes, get into more debt). The last reverberation of his decision was that he did not get any reasonable scholarship for grad school.

 

[Choppy]

The debt amounts guys here mentioned are somewhat amusing. At my work, probably all junior engineers (we have a few mechies, a few electricals, and a physicist) start around 60k. Thus, 20k can be paid off in one year with little interest.

Do you not have income taxes or any costs of living where you live?
If you're starting out at $60k gross, once you take away income tax, pension and/or retirement savings, health and dental insurance, union dues, professional fees, etc. you'd be lucky to have $30k in your pocket. That's actually a half decent amount of money, but if you then figure on paying off $20k in a single year, that only give you ~ $10k left to live on.

In principle, sure, people can live like students for another year or two, in all practical experience, once money starts coming in their lifestyles get more costly an that plan to pay it all off in one year drags out over five.

Also, some people mentioned working full/part time during studies. While working is generally a rewarding activity, diverting too much time to a low-paid job might prove detrimental to one's future. We have a nice young PT person who is just about to finish up his bachelors in EE. Instead of focusing on the important courses such as Calcs / Electronics he flew through them with somewhat shaky "understanding" of the topic. He'd have done much better if he'd decided to work less and focus more on his school (and yes, get into more debt). The last reverberation of his decision was that he did not get any reasonable scholarship for grad school.

It's all about finding the right balance. In my experience the benefits of a part-time job outweigh the pitfalls - but the time issue is one that everyone needs to figure out for themselves. In most cases taking one six hour shift a week on Saturday mornings is not going to have any significant effect on a student's grades. However, working thirty-hours a week and letting that cut into sleep and /or study time is likely to affect performance.

 

[Robert1986]

Debt is unfortunately unavoidable for most people. Unless one wants to live in a rented apartment and decides not to purchase a car then one won't get in debt.

Not even close to being true. I have a car. My wife has a car. We have no debt. We are currently saving money for a house (like 100% down.) We are not rich people. I drive a 1994 Nissan Sentra, she a 2004 Chevy Aveo. We live in a studio apartment. So, when you say (or at least imply) that one must go into debt to get a car or live in a house, you are dead wrong. What you really mean is that people who want stuff they can't afford must go into debt.

However, I must say that the only sort of debt that I won't get upset about is a mortgage on a primary residence; but I really don't even like this.

I speculate that the main point is not to get in excessive debt.

I agree; and any positive number is excessive, IMO.

Paying for a good graduate school is alright (i.e. top ten law schools - 200k) because you know that the debt will be safely paid off in a few years.

100% wrong. You do now "know" anything. IF you finish and IF you get a job and IF you keep the job and IF it pays enough, then the loan can be paid off in a few years. Otherwise you have what is essentially a mortgage but with no house. As someone pointed out, the student loan debt ain't goin anywhere til you pay it off.

Paying 150k for history major in a good private undergraduate school could be an example of unreasonable debt.

That is VERY unreasonable debt.

The debt amounts guys here mentioned are somewhat amusing. At my work, probably all junior engineers (we have a few mechies, a few electricals, and a physicist) start around 60k. Thus, 20k can be paid off in one year with little interest.

Sure, provided one can get and keep a job that pays $60k.

Also, some people mentioned working full/part time during studies. While working is generally a rewarding activity, diverting too much time to a low-paid job might prove detrimental to one's future. We have a nice young PT person who is just about to finish up his bachelors in EE. Instead of focusing on the important courses such as Calcs / Electronics he flew through them with somewhat shaky "understanding" of the topic. He'd have done much better if he'd decided to work less and focus more on his school (and yes, get into more debt). The last reverberation of his decision was that he did not get any reasonable scholarship for grad school.

Interesting, I have had the EXACT OPPOSITE experience. I just found out this weekend that I was being awarded a fellowship for my graduate studies. I strongly suspect that one of the reasons that I got the award is because I have been working full time over the span of my undergrad education. BTW, I'm just in a MS program, so it is not like I'm in a Ph.D. program where the funding is more-or-less guaranteed (though I plan to go into the Ph.D. program.)

 

[Angry Citizen]

I strongly suspect that one of the reasons that I got the award is because I have been working full time over the span of my undergrad education.

This is pretty presumptuous. Word on the street (or convention floor) is, employers really don't care if you flipped a burger or not. Maybe it's just my experience hunting for an engineering internship, but that's what the recruiters were keen to mention.

 

[Robert1986]

This is pretty presumptuous. Word on the street (or convention floor) is, employers really don't care if you flipped a burger or not. Maybe it's just my experience hunting for an engineering internship, but that's what the recruiters were keen to mention.

No, your post is presumptuous.

First of all, I clearly said that I had a full-time job. How many burger-flippers do you think are full-time? Did you actually read what I wrote? Why on Earth would you presume that I had a burger-flipping job?


And I didn't even say anything about engineering, nor about getting hired by an engineering company, so what they think is, quite frankly, not that relevant in my case. But, for the record, I know of an engineering firm who WON'T hire someone who hasn't had a job during their college career.


So, if you want to go around acting like your really the smart one for going into debt (I assume you have debt, otherwise you wouldn't be so defensive about this topic), and I'm somehow "un-enlightened", or whatever, that's just fine with me. You can have your debt, but, guess what? I'm feeling pretty freakin' good sitting here with NO debt.

 

[Angry Citizen]

First of all, I clearly said that I had a full-time job. How many burger-flippers do you think are full-time? Did you actually read what I wrote? Why on Earth would you presume that I had a burger-flipping job?

Unless you're working in a field remotely applicable to whatever major you're in, then it might as well be burger flipping.

And I didn't even say anything about engineering, nor about getting hired by an engineering company, so what they think is, quite frankly, not that relevant in my case.

But it is for mine. Like I said, "maybe it's just my experience blah blah".

So, if you want to go around acting like your really the smart one for going into debt (I assume you have debt, otherwise you wouldn't be so defensive about this topic), and I'm somehow "un-enlightened", or whatever, that's just fine with me.

Chill out. I guarantee you no employer is going to keep someone who takes criticism as poorly as you do. Given that you apparently have a full-time job, how about you apply the same level of courtesy here that you do in the workplace?

For one, I'm not "acting like I'm really the smart one". I'm saying that I could not get a college education without debt. In fact, I wouldn't be alive right now if I hadn't taken on debt. Woe be to you if you randomly find yourself with a chronic illness - you might have to go into debt.

For two, I'm not getting defensive. The only one getting defensive is you. Case in point your extremely harsh reaction to my post when my harshest word was "presumptuous" - as I believe you said to me multiple times earlier.

For three, don't put un-enlightened in quotes as if I spoke it. You did; I didn't. Misattribution of quotes sure as hell won't win you any friends.

For four, like I said originally, good for you for escaping debt. The math will work out about even between us, I suspect. I'll have a job I like; you'll hopefully have a job you like. I'll be happy paying off some debt; you'll be happy spending years of your life working a job you'll never see again. Tomato, tomahto.

 

[Robert1986]

Unless you're working in a field remotely applicable to whatever major you're in, then it might as well be burger flipping.

Again, my experience tells me that this is not true.

Chill out. I guarantee you no employer is going to keep someone who takes criticism as poorly as you do. Given that you apparently have a full-time job, how about you apply the same level of courtesy here that you do in the workplace?

And what, not defend my positions? Just because I disagree with you doesn't mean that I am treating anyone without courtesy. You said that I was being presumptuous. I said that you were being presumptuous. Where was the lack of courtesy?

For one, I'm not "acting like I'm really the smart one". I'm saying that I could not get a college education without debt. In fact, I wouldn't be alive right now if I hadn't taken on debt. Woe be to you if you randomly find yourself with a chronic illness - you might have to go into debt.

Obviously, if the only thing you have debt for is medical stuff, then we're talking something a little different. Though, that does not totally excuse debt in all cases.

For two, I'm not getting defensive. The only one getting defensive is you. Case in point your extremely harsh reaction to my post when my harshest word was "presumptuous" - as I believe you said to me multiple times earlier.

Was my post really that harsh? It didn't seem harsh to me. My apologies if it did.

But, why is it that you are allowed to critique my posts, but when I critique yours, I am being harsh?

For three, don't put un-enlightened in quotes as if I spoke it. You did; I didn't. Misattribution of quotes sure as hell won't win you any friends.

I agree completely. But, putting words in quotes does not always mean that the phrase is being attributed to a specific person. This was my intent. My apologies to everyone if I was unclear.

For four, like I said originally, good for you for escaping debt. The math will work out about even between us, I suspect. I'll have a job I like; you'll hopefully have a job you like. I'll be happy paying off some debt; you'll be happy spending years of your life working a job you'll never see again. Tomato, tomahto.

No, the math MIGHT work out the same, as long as you get a job and finish school and...

 

[Angry Citizen]

I said that you were being presumptuous.

No, you said I thought I was smarter than you.

No, the math MIGHT work out the same, as long as you get a job and finish school and...

And your job MIGHT have gotten you the fellowship. It might have been a waste of your time, in this sense.

Frankly, if I don't finish school, I'll have far more important things to worry about than some piddly debt. And not getting a job as a fresh-out-of-the-box engineer is pretty hard to do.

 

[elterrible]

Not even close to being true. I have a car. My wife has a car. We have no debt. We are currently saving money for a house (like 100% down.) We are not rich people.

The whole time you are saving to buy a house outright, your money spent on rent is going nowhere versus taking out a loan (while rates are insanely low right now) and making mortgage payments which would be giving you equity in something.

 

[Robert1986]

No, you said I thought I was smarter than you.



And your job MIGHT have gotten you the fellowship. It might have been a waste of your time, in this sense.

Frankly, if I don't finish school, I'll have far more important things to worry about than some piddly debt. And not getting a job as a fresh-out-of-the-box engineer is pretty hard to do.

OK, let me just say this: I have re-read some of my posts and I sound like an A-Hole! I didn't mean for them to come out this way. My "tone of voice" in my mind was quite different than the way it looks on the screen. Does this make sense? Anyway, my sincere apologies if I sound A-holeish. This is a topic about which I am very passionate, and so my posts seem more intense than I really want them to be.

So, again, my apologies. Now, let's just get back to arguing with cranks who think .9999 doesn't equal 1.

 

[Robert1986]

The whole time you are saving to buy a house outright, your money spent on rent is going nowhere versus taking out a loan (while rates are insanely low right now) and making mortgage payments which would be giving you equity in something.

True, true. But, there are some things to consider:

1) When you have a mortgage, you ARE paying rent. You are paying rent on money.

2) Yes, if you are paying on a mortgage, you are building up equity in a house. But, it is partial equity. That is, you have you don't have full equity in your house. We (my wife and I), however, will have full 100% equity in the pile of cash we are saving.

3) Also, consider that we plan to have enough money for a modest home in about 4-5 years. Now, this is quite a while, I agree. However, if you consider that during that time, most of your payment will be going toward interest, and not toward principal, you aren't really building up that much equity.

4) Now, I'm always saying "what if X happens", right? So its only fair that I apply that to my plan, isn't it? So, what if I'm not able to do this, for whatever reason? For example, what if I lost my job and couldn't contribute to the "house fund" for 6 months? Well, it would set me back 6 months. At the worst, it would set me back a year, if I had to dip into 6 months of the "house fund" (though using that much would be unlikely; we already have an emergency fund that will sustain us for several months.) If I had a mortgage, there is a pretty good chance that I would be foreclosed on. Now, how far back will that set me?


Now, I understand there are disadvantages to what I plan to do. And I view this decision as more of a personal one, in the sense that I won't think you are making a mistake if you get a (reasonable) mortgage. For me, however, I am ANTI-DEBT, and so I do not plan to get a mortgage.