# How much debt can I hope to pay off?

Tags:
1. May 1, 2010

### blorksar

Hi,

I need help in making a (big) decision. I've been accepted to a small top-tier Liberal Arts college in the USA (I'm not a domestic student) and intend to major in Physics there. I am very confident of my academic skills, especially in Physics (let's do away with modesty for a while, because I'm making an important decision) and hope to do a Ph.D in a very good university after I graduate. The problem, however, is that I'll be graduating with a debt of around $20,000 to$40,000 (depending on how much my parents can pay).

My other options are strong (academically), but they don't offer me the kind of education I want (read: small college, individual attention, broad curriculum, etc.).

I want to know whether you think it is realistic for me to graduate with such a large debt, get a Ph.D and repay all debts (including the $20k to 40k for college + extra debt to earn a Ph.D, if any). Although I will resort to higher paying jobs if necessary, I would prefer not going into the big bad world of companies, writing formulas for investment bankers on Wall Street who will bring the world economy crashing down so that 18-year-olds don't get enough financial aid to go to college without worrying about such things. Put simply: I'd like to stay in the traditional research/teaching business. Thanks in advance! PS: It's a pity my first post here had to be so negative, I hope the rest of my stay at PF will be more physics oriented - more enjoyable. 2. May 1, 2010 ### Ronnin I don't quite understand why you think it is someone elses job to fund your college education and leave you not to worry about it, and why those "big bad" companies have anything to do with you attaining your goals. I would recommend first getting to know the real world just a tad and realize that no one is going to just give you anything just because of your awesomeness. Even if you plan to stick with a purely academic route you are still going to have to bring someone enough value to justify the salary they are paying you. As far as the pure finance of it lets assume you graduate with your undergrad and now owe 40K in loans. Using the calculator found here http://studentaid.ed.gov/PORTALSWebApp/students/english/OtherFormsOfRepay.jsp [Broken] you would owe about$460 a month for 10 years. Remember, this is subject to any fluxuations in the prevailing interest rates so that may change over the 10 year time period. That is a sizable chunk of change to spend a month so I would consider any option you may have to knock that principal down such as a part time job during college summers. The only person who can answer the question if you will be able to pay the debt off is you but I hope this information helps you understand the size of your educational investment.

Last edited by a moderator: May 4, 2017
3. May 1, 2010

### blorksar

I didn't mean that as seriously as it sounded. All I wanted to say was, I'm more interested in the more pure Physics so I don't want to solve equations for a lot of money simply because I can (and then I took a pot-shot at them because from the little I've read about the crisis, they did push the limits a bit too much)
That is one of my main questions. How much value does a Ph.D bring to an academic institute? Enough to fetch a salary that lets you repay a loan of $40k? Thanks for that link!$460/month is a good amount of money and 10 years is a long time. I don't want to be forced to stay in the US just to repay a loan. I may, potentially, want to come back home. But I guess that's the cost of getting a good education. It's a hard decision to make.
I have included all my earnings from college employment in my estimation of $20k to$40k debt.
Thanks! Your post certainly did help. Now I've got to get back to plowing through numbers with my parents before making the final decision. :)

Thanks again!

Last edited by a moderator: May 4, 2017
4. May 1, 2010

### twofish-quant

That's not a huge number. You need to make sure that you get the best deal so look closely at interest rates.

If you are going into physics, your Ph.D. will be paid by internships, and if you get the right loans, interest will be deferred while you are in graduate school.

There are a lot of idealistic people in finance, it's just that people that are really idealistic don't make a big show about what being idealistic. As long as you can convince yourself that you are doing good, what's the point in convincing other people?

One of the reasons I got into finance was because I realized how important money is, and it happens to be the area that I can make the most social use of my skills. The crash of 2008, could have been a *LOT* worse than it was, and one thing that makes me feel good was that I did my job and in doing my job, I helped stop a Second Great Depression. The dominoes were falling in September, 2008, and by just programming computers, I helped keep one domino from falling.

But don't expect fame or gratitude for saving the world. Hank Paulson and Timothy Geithner saved the world. But if you save the world, no one is going to thank you, you'll just be put in front of committees of angry people. So at the end of the day, it's pointless to do things for gratitude or fame. Just do the right thing, and if people punch you in the nose afterwards, oh well.......

There is the story of Lu Xun who was training to be a doctor when he saw a film about Chinese prisoners getting executed by Japanese soldiers, at which point he became a writer because what's the point in saving one life if millions die. Similarly, if you leave finance to crooks, it's not going to keep the world from collapsing, and if the economy does collapse, then what you did as a teacher may not matter.

One bit of good/bad news is that the world is changing very fast, and so research and teaching when you get your Ph.D. is going to be very, very different from what it is now.

5. May 1, 2010

### twofish-quant

Some people did. Some people didn't. The people that did the right things, you don't read about.

In any case, one thing that you really have to ask yourself is are you getting value for spending 20k-40k. Large public state schools are a lot less expensive, and if you get the same quality of education, then its pointless to spend the extra money.

The other thing is that you need to look at the details of the loan package. The interest rate is extremely important as are deferment and cancellation conditions. There are loans in which the government pays interest while you are in grad school, and some loans are set up so that they will cancel parts of the loan if you end up teaching public school.

You will be able to get a job with a Ph.D. that will let you pay off $40K, and for most in the US people$40K loan isn't that much compared to their home mortgage loan (which is typically $100-$200K). However, even if you can pay off the loan, that does restrict the jobs that you can do. If you want to be a beach bum then having a student loan gets in the way of that.

Ummmm.... It may not be. Just because you are paying $20K-$40K doesn't necessarily mean that the education is good. You really do need to see if you can find cheaper options.

6. May 1, 2010

### twofish-quant

Also, you really need to get a book about financial aid. Something about some universities is that the "list price" of tuition may be nowhere near what people actually end up paying.

7. May 2, 2010

### blorksar

twofish-quant, Thanks a lot! Will really look into these. Like I said, if I can afford it, I don't see anything better than this college. I don't have any other options with a broad curriculum, etc. However, my other options aren't bad. In fact, I've got some really strong options in my home country. My parents and I love (really LOVE) the liberal arts concept and this is the only liberal arts and science option I really have. Your posts were very informative. :)

Also, I'm sorry about my previous bias about physics students taking finance jobs. You've changed the way I look at them. I may still not take that kind of a job, I'll respect those who do far more. Thanks. (Thanks also for holding that one domino up!)

Both of you have certainly given me a far better idea of what to look for and what to keep in mind while finding a loan and making my final decision.

8. May 2, 2010

The good news is that if you have a physics Ph.D. then you shouldn't have much problem getting a job in the US that can pay a $40K debt off. The big problem that I see is that you may end up in trouble if you can't or don't want to stay in the US. Also, you do need to structure the debt for maximum benefit... http://www.petersons.com/finaid/ 9. May 2, 2010 ### blorksar A lot of what is written on the net about funding a US education isn't very relevant to me. As an international, I only get funding directly from the college. I do get a on-campus job, but while class/exams are on there are restrictions on how much I can work and how much I can earn. Beyond that, I'm left to myself to fund the education. Education loans will have to be taken from my home country (I do not qualify to get a US loan, no cosigner). So as far as planning the loan out, there are very few options. I can only chose which bank to take the loan from (which again is already decided as public banks subsidize education loans for students going abroad when compared to private banks). Thanks for all the encouragement! I'm more comfortable taking the loan now, but I've still got to evaluate our financial situation with my parents before I'll know approximately how large the loan will be. 20k to 40k is my personal guesstimate and is quite a large range to be able to evaluate the consequences of taking a loan well (20k is a lot less than 40k and consequences of one would certainly be very different from that of the other). Thanks again! I'll make a far better decision in the next few weeks! 10. May 2, 2010 ### eveo Consider yourself lucky,$20k - $40k debt after a Ph.D education is small. Here in Canada, if you are looking to do a Ph.D + living on campus would amount to: 1 year of campus living$9,000.
$9,000 x 9 =$81,000
1 year of Physics tuition $5,900$5,900 x 9 = $53,100 so in total about$134,000, so that's pretty sweet that you're only paying 40k tops

11. May 2, 2010

### Ryker

Doesn't almost everyone in Canada get some sort of support when doing a Phd in Physics, though?

12. May 2, 2010