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#1 Posted by MrPilkington (1034 posts) -

Here's a question I have wondered and have been stressing out over recently as I am someone that tries to be responsible and keep track of my life and not just think "everything will work out". I'm a year away from graduation now. I graduate college Dec 2017. I have been able to keep student debt fairly low compared to many, since I went to a community college first and paid out of pocket from working and family help the best I can, but I currently have 26K in debt and by the time I graduate it'll be almost 30K (though it'll be lower since starting in January I'll be in a financially better position to start making payments on it during my last year of college). How bad is this? Is this the kind of debt that could cripple me or is it manageable? I've been working hard trying to hunt a job before I graduate and so far no luck, but I do have a year. My degree is in Dramatic Arts and Theatre with a concentration on Directing and Stagecraft which I know people say that degree isn't as favorable in the market today, but mine teaches me technical skills I can use anywhere really and ever since I started I have been working my butt off throughout my college career doing theatre work, gaining credits and building a resume and my friends who have graduated say I have a pretty good starter resume going. I tend to work all the time and this is something that's been in the back of my mind and is now becoming more in the forefront. Should I relax a little?

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#2 Posted by SSully (5627 posts) -

The average student loan debt in the United States is about 40K, so you are below that. With that said, measuring the impact of your debt is relative to how much you make and what your expenses will be.

If you are in the USA, then there are two things that can help you ease your mind a bit. 1. You have a year after graduation until you have to start making payments on your loans. 2. Most loan payment plans are now based on your income at the time. This is good at first, because it helps you get on a payment plan that won't suck you dry. The point of this payment plan though is that you will start making more and more money as you advance in your career. If you are lucky enough to have a decent paying job, it is recommended that you pay more then the payment plan suggests so that you can pay off your loan faster.

I personally wouldn't worry about it for now. You should focus 100% of your energy out of school on getting a job. Once you land a gig, then you can start planning your financials more.

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#3 Edited by nnickers (495 posts) -

26-30k isn't bad at all. My girlfriend just got her second bachelor's in nursing last year (her first was in biology) and that program alone was about 70k.

Edit: when I say "not bad at all," it's obviously a ton of money and terrifying, you just have to hope that having that degree will raise your regular income by enough to compensate. It's not bad at all relative to what many people pay for four-year degrees is what I meant.

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#4 Posted by Justin258 (15587 posts) -

26k in student debt isn't bad, at least not compared to most people. Still, once you get a job, pay off as much of that as quickly as you can.

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#5 Posted by Spoonman671 (5874 posts) -

That's definitely on the low side, but no amount of debt is good. Eliminate it as soon as possible so you can get yourself in debt to somebody else. #ResponsibleFinancing

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#6 Posted by BojackHorseman (690 posts) -

I currently have 250.000 in student debt. But that's in NOK, so it's around 20K dollars. Will have around 700.000 NOK when I'm done.

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#7 Posted by meteora3255 (678 posts) -

If the education you got is valuable and will help you get a decent paying job then 26k isn't bad especially compared to the average borrower. If that money is for something that won't help you then it's certainly not great. That being said there are repayment options and loan forgiveness programs if it's not affordable.

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#8 Posted by impartialgecko (1941 posts) -

My housemate is 350K in debt and counting, in comparison you don't have that much to worry about.

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#9 Edited by WynnDuffy (1289 posts) -

In USD I will be at around 50k next year, but the method of paying it back is quite fair and it doesn't have to be paid back for a long time so it's not that bad.

Still ridiculous though, education isn't worth this much. I could have learnt all of this alone with textbooks. The only reason I went to university is because a bachelor's is basically a requirement for what I'm going into. I guess you could say it's worth it because the BA will get me a good job but I'm not going to be rich by any means.

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#10 Edited by Sweep (10563 posts) -

In the UK the amount you pay back is a percentage of what you earn, and if you earn below a certain threshold then you don't have to pay back anything at all. Though I believe you still get an interest hit during that time.

I used to freak out a little about my student loans because for the first 3 or 4 years I was working I was earning so little that I was barely making a dent in the interest, let alone the loan itself. However it's something that almost everyone with a good job needs to account for, usually for a large chunk of their working life. Don't let it overwhelm you, just accept it as a necessary evil and do what you can.

I do know a couple of people who prioritized paying off their loans asap, working and saving to get it done as quickly as possible. That's probably the smart move, but they wasted their 20's working and saving money instead of just paying it off naturally like the rest of us.

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#11 Posted by SethMode (1887 posts) -

My final year of undergrad on 2005 was 29k by itself so...you're doing alright compared to a lot of people. Just make sure you always make your payments, get auto debit (especially if it lowers your interest rate), and if you have a subsidized loan(s) try to make payments ASAP, even if youre still in deferment/grace. It will all go straight toward your principal balance then.

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#12 Posted by hollitz (2371 posts) -

Naw

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#13 Edited by n00bs7ay3r (317 posts) -

That is actually quite decent from what I understand. If you are in America, your education costs are astronomical. I live in Canada and used a little less than that for my bachelor's degree, and we spend way less on education than what it costs in the US. I looked into dual JD program (a program that would allow me to get my law degree in both the US and Canada) and it was over 2x as much for the American part of the program as the Canadian part. I ended up deciding against the program just because the cost in the US is so prohibitive. You are in a great position. Continue your education and pay off your debt as quickly as you are able.

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#15 Posted by ajamafalous (13812 posts) -

I have more than that.

Depending on whether you got your money through the government or not, many student loans have different repayment options (pay no more than 15% of your monthly wage, pay nothing until you make more yearly than the amount of your total debt, etc.) that make it manageable. You shouldn't let it eat at you.

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#16 Posted by wadtomaton (608 posts) -

I have like 4x that...trade? XD

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#17 Posted by afabs515 (2005 posts) -

I know plenty of people with a lot more student debt than that unfortunately. Obviously student debt isn't good, but relatively, yours is not too bad

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#18 Posted by cmblasko (2906 posts) -

No, that's not a lot for student loan debt. Having anxiety over it is pretty normal, too, but you get used to it eventually.

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#19 Posted by BelowStupid (495 posts) -

That's not bad at all, my friend graduated from NYU with a TV writing degree with 100k debt. I had a little over half yours with an embarrassingly low paying starter job and paid it all off in 3 years. If living at home takes major stress off your finances do it! You'll be better off suffering with mom and dad for a few years while you fuck those loans up and be clear for the rest of your life.

Also the best thing I did was putting everything I got from my tax returns to my loans, that's was basically a free $1500-$2000 payment every year.

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#20 Posted by deactivated-5a0917a2494ce (1350 posts) -

You're fine. A lot of people I know have $200k+ in debt. I had about $26k in debt after I got my masters and it costs about $330/month. Most people with a decent job can afford that.

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#21 Posted by Darknorth (238 posts) -

I took on 30k and have had no problem paying it off, but lab science pays better than most theaters. Just remember that there are income-based repayment options as a last resort. Keep working and you should be fine.

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#22 Posted by deactivated-5a0917a2494ce (1350 posts) -

@belowstupid: please don't say the 1500-2000 is free. That's an extra 2k of the money you worked for that was given to the government when it should have stayed in your pocket. So it's not free, it cost you 2k. But the advice is still sound.

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#23 Edited by dudeglove (13684 posts) -

It's not particularly good that you're in debt, but one thing student debt sorta taught me is that sums of money you once thought of as "huge" become a lot smaller.

Doing a slight aside/airing of grievances, fuck the student loans people in the UK. They are seriously the worst. Their online system is shit. Their phone service is shit. Despite "paying off" everything, I still got contacted a whole year after the fact because "there was an accounting error" (and seemingly a whole bunch of other errors) and they never bothered to tell me for an entire year until I got yet another letter, and I had to pay the interest on a small sum that grew about three times its size because of their obscene fees. After multiple phonecalls and other correspondence, eventually culminating in me saying I would pursue legal action in a small claims court, I have a signed letter from someone vaguely senior in the SLA telling me "your account with us is closed". Sigh.

Anyway, my advice, considering these student debt systems are designed to make sure you never pay your loan off, is (if you're having your loan taken out of your salary anyway, which is usually meant to be less than the monthly interest) make a bulk separate payment of a couple of hundred every couple of months (if you can) to offset the interest on their BS.

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#24 Edited by BelowStupid (495 posts) -

@horseman6: When I said "basically free" I meant it more in the sense that I don't include it in my monthly/yearly budget, but I get your point.

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#25 Edited by Berserk007 (320 posts) -

After interest it will be way more than that duder,my only suggestion would be to do minimum payments until you can throw serious money at it ( like a grand) that way it will make the principal drop dramatically and make the interest calculations diminish drastically every time.

Once you get under 10k balance, it's your debt so transfer it to a 0% APR credit card. You will have to pay transfer fees but it's worth it. When the 0% ends transfer to another card with the same offer. Never cancel your cards, your credit score will go up and you will most likely have more opportunity to disperse the debt and pay it off as fast as possible by repeating this process. I hope any of this helps ya

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#26 Edited by MonkeyKing1969 (7481 posts) -

Its a different world than it was for me 20 years ago. But I think the advice stays the same - just pay it off as quick as you can.

1. Make a budget with everything coming and and going out. Then cut deep as you can - fuck cable - fuck that higher tier of Internet - fuck buying breakfast and lunch out...brown bag it. Yes, live at home and pay rent. Whatever it takes.

2. Pay more than the minimum payment each month, even if it just tucking another $20 above what you have budged. It does adds up over the years.

3. If you have multiple loans, pay off the highest interest loans first. (But look at #4)

4. Talk to your bank, see what you can do to Refinance your debt. Go to a BANK...DO NOT talk to a debt refinances or consolidators. The person at 'your' bank, they can look at your loans and in five minutes give you some advice. They might not give you a loan or refinance you debt...but some advice and seeing what they interest will cost you will sober you up FAST.

5. Take full advantage of tax deductions and credits. Get some REAL tax help if you have to. It will cost you a hundred to go to H&R Block, but they might save you THOUSANDS.

6. All the money you get should be going towards the debt. Christmas/Hanukka money, birthday cash, or that inheritance from Uncle Bob. Use any/all windfall to pay off debt.

7. Don't spend money on stupid stuff even if you get a good paying job. Pay off the debt now, don't buy a 60" 4K TV or a new car.

8. If you have student debt...fuck that idea of a big wedding. Male or female, straight or gay it don't matter - get that idea out of your skull.

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#27 Posted by Zevvion (5965 posts) -

It's actually a rather small debt. Also, student loans have very lenient payoff plans. You can take like 10 years to pay them off, which if you get a job 6-12 months after graduating, is something you don't even notice apart from having to set up a monthly pay off. Especially because it will be your first actual well paying job.

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#28 Posted by JasonMasters (292 posts) -

$26k isn't the worst by a long shot. I've been out of the college since 2009 and I still have around $40k in debt.

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#29 Edited by FunkyS (162 posts) -

@sweep said:

In the UK the amount you pay back is a percentage of what you earn, and if you earn below a certain threshold then you don't have to pay back anything at all. Though I believe you still get an interest hit during that time.

As someone who currently earns under the threshold I can attest that this is true. Also just as an aside, I'm pretty sure that after a certain amount of time (35 years or something?) your student loan debt is written off entirely. Just went a looked it up, I quote:

If you started your course on or after 1 September 2006 and have a Plan 1 loan, any balance of your loan is usually written off after 25 years. The exception is Scotland, where the period before the loan is written off is 35 years.

I'm currently about £12,000 (approx. $14,690) in debt and unlikely to pay it off. It's annoying, but doesn't really factor into my day to day life. I feel sorry for people who went to uni after me though. My entire debt is around 3 grand more than some people I know accrued in a single year, a typical course is 3 years or so.

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#30 Posted by CByrne (509 posts) -

Nah that's fine. Some cars cost more than that. My debt is about 6x that and I'm still here. Currently spend 1600 a month on loan payments. It's the price to go to a fancy private engineering school.

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#31 Posted by deactivated-5879a8792e775 (227 posts) -

26K in debt is a lot of money. Don't let anyone fool you. Just because people have more debt or it is below the average, does not make it okay or any better. This is a serious problem in this day and age.

It's not "fine" either. It's the unfortunate cost of living in this society but just because someone who had an Audi and is paying $50k, doesn't mean that $26k is "good."

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#32 Posted by clayman (20 posts) -

I would say it's something you should be aware of, and plan you finances in such a way that allows you to pay it off as quickly as possible (interest fucking sucks), but I would also not let it be something that keeps you up at night. If you do find yourself in a position to be paying more than the minimum, I would advise you to double check that the money you pay extra is actually going to the principal balance. Most places will let you do that, but some will default to applying it to future payments. So you don't owe money next month, but the actual amount has not gone down.

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#33 Edited by Casepb (598 posts) -

I finished college in 2008, I have about 2K of student loans left. Feels good.

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#34 Posted by Turambar (8251 posts) -

@mrpilkington: 1. Relax a bit. Pretty much everyone graduating from college is in the same boat you are.

2. Getting started on a job hunt early is good.

3. Don't get complacent just because they payment schedule for student loans can be lenient. Be aggressive in how you budget so you can get it paid off quickly.

4. Don't get hung up on finding "the right first job". Have some sort of steady income stream so you can start chipping away at the debt.

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#35 Edited by GIynny (34 posts) -

@mrpilkington:

Duder,

Forget about what this piece of paper means. (College degree) In the real world it has little value. So everything you've ever learnt about education. Clear your mind completely. Stop whatever you're doing. What you need to do is this.

  • Build a track record by any means necessary.
    People don't care about your education, they care about what skills you've got and how you can benefit their business in the workplace. What can you offer them? What have you done before that proves you're capable. By building a track record.... I'll explain how to later, you are proving you actually have done something useful. Rather than just bullshit on paper.

  • Find someone, somewhere that's willing to take you on. And they will.
    I want you to reach out to every single person / employer / company that you think would be a dream to work for. In your perfect world, who would be on this list? Those people that come to mind, hit them up and explain what you can bring to the table. And sell them your story and how you're going to change the world for the better. You can find these guys on LinkedIn, or google. Just call them, email them, or go and make a personal visit to their premises. I want you to make a list of the top 200 people on different online platforms, and individually reach out to them.

  • Sometimes you'll need to work for free.
    I don't know how much time you have to spend in the day. But this is the most important. When reaching out to these guys, say to them that you don't care about the money, and that you want to learn from the very best. Eventually, if you prove you're good enough they'll want to keep you no matter what. The greats are always looking for the best staff in the world. In fact that's one of the hardest things to find as a business owner. So they will give you money. Or forward you to a friend who will give you a paying job. But the crucial thing here is that even though you might be working for free. Never tell anyone how much you profited from this. Even if you didn't earn a bean. No one needs to know. And in fact this question doesn't make a blind bit of difference anyway. No one will probably care how much you have earned in the past.

  • Stop thinking about the potential future, and act now.
    There's no need to wait until you've completed your course, to find an industry specific role. You can literally go out today or tomorrow, make the calls and be working in a place you want to be. So do it now. I know money is an issue, if you're a student. But there are 7 days in a week. And 16 hours in a day. You can make this work. Don't worry about the debt. You can pay that off when you're in the position too. Later on down the line. This debt is a tool, that is allowing you to get to where you want to be. And unless you act now, and quickly and do the right things. Then it's completely pointless ever taking it on in this first place. If you don't act now, you will never do this ever. You will never talk to the people you've dreamed of talking to. You will never work in a place that you've always wanted to. You'll always say. I'll do that tomorrow.

  • Find ways you can bring more revenue to the table.
    Whenever you reach out to these guys. Or are working somewhere. Try to find some way that you can add value. Aka. How can you produce more income for the company you're currently at. Try to think of things that they wouldn't have even thought of. A basic example would be. You're working in a drama theatre. You say. I'll bring you more productions / customers. So for every new "show" that your drama theatre showcases. You get a percentage of the commission of the ticket prices. Or the fees the theatre charges the production company or whatever. REVENUE is king. If you can find ways to add revenue and value to any business. They'll love you.
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#36 Posted by AndyC80 (57 posts) -

@mrpilkington: hi I'm probably old for this site but here's my thoughts. It's not a ton of debt and a 20 yr payout won't be that much month over month. Consolidate where you can into a fixed interest rate and pay on time and you will be fine.

Good luck

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#37 Posted by spitz1000 (213 posts) -

i think your own mentality also comes into play here, if being in debt really bother you (like me) i would try to figure out how long it would take you to pay off the debt and just keep that in mind so you might feel better about it.

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#38 Edited by Par1val (91 posts) -

no. I have a littls more than that. Luckily I found a full time job in company with potential for growth. It doesn't pay much, but I make the payments on time. Just focus on finding a full time job in your grace period (if you have one).

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#39 Posted by Feathered (244 posts) -

It's bad if you end up with a job that doesn't pay so well, especially if it's a job that has nothing to do with your major, because then you have the feeling of "oh God, what was the point of even getting this degree" combined with the dread of having tens of thousands of dollars on your head. What's the average entry-level salary of a college grad these days, something like 35-40k? If you can make your payments and pay your bills, then you should be fine. But it'll probably suck for a while.

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#40 Posted by KevinTheJames (15 posts) -

I started with just shy of $30k when I finished my Bachelor's. I'm down to $13k about two years later.

I get the feeling that anything shy of $50k for student loan debt isn't terrible. I mean, the cost of education in general is an entirely different story, but still.

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#41 Posted by poveren (317 posts) -

I was about -27k by graduation. Ended up consolidating all debt under a single roof, which reduced my interest rate significantly. Paid off aggressively over a couple of years, lived with my dad at the time though.

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#42 Posted by YoThatLimp (2480 posts) -

My housemate is 350K in debt and counting, in comparison you don't have that much to worry about.

I mean, it depends on what they plan on earning after graduation, doctors make more then baristas and all that.

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#43 Posted by deactivated-5b031d0e868a5 (935 posts) -

Here in Scotland we don't have it that bad especially compared to most places and from everything I've gathered from the US system you seem to be in a better place than most.

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#44 Posted by Gruebacca (813 posts) -

Am I some kind of weirdo here for not having debt? Middle-class, entry-level retail job, lives with parents who chip in some of the money, and commutes to state uni 6 miles away. Unless I decide to go to graduate school somewhere else I don't expect to take on any sort of debt.

btw, $26k is a lot of money, but it could be much worse. If they let you pay it over a long period of time, it's totally manageable. The way I see it, if college costs you more than a luxury car, there's something wrong there.

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#45 Posted by impartialgecko (1941 posts) -

@impartialgecko said:

My housemate is 350K in debt and counting, in comparison you don't have that much to worry about.

I mean, it depends on what they plan on earning after graduation, doctors make more then baristas and all that.

He's a vet. Which is average at best.

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#46 Posted by Asurastrike (2306 posts) -

Student loans are incredibly low interest, and the repayment plans are very flexible allowing you to pick from either 10 or 20 year plans where payments either start small and get bigger every 2 years, or remain a constant rate over the duration of the repayment period.

I owe $34,000 in student loans and only pay $252 a month on the 10 year plan, which is less than what I pay for my car note.

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#47 Posted by clagnaught (2111 posts) -

I haven't been in debt before (still in my 20s so I'm bound to get there some day) so I can't comment on that besides saying it is on the low side.

Your first priority should be to find a job. As someone with an English degree who also ended up graduating in December, I can say that the week leading up to Christmas isn't the hottest time to find a steady, full time job and start a career. Now the spring on the other hand is typically better. If you don't have your first out of college job when you graduate it's not the end of the world, but you have to be persistent.

If your school has career services or an equivalent department to help you go over your resume, use it. If you have any opportunities for mock interviews, use it. Degrees both matter and don't matter. Finding a job is about selling yourself, showing what you can do for your employer, and how you can add value. A lot of college grads give terrible job interviews when they start out (I certainly remember mine awful phone screenings and I've heard plenty of awkward encounters from people who have gone college recruiting.) The screening process can be brutal. It's best to prepare yourself to get that face-to-face interview where you can really sell yourself. I know this is pretty off topic, but some of your situation reminded me of mine.

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#48 Edited by spitz1000 (213 posts) -

@gruebacca said:

Am I some kind of weirdo here for not having debt? Middle-class, entry-level retail job, lives with parents who chip in some of the money, and commutes to state uni 6 miles away. Unless I decide to go to graduate school somewhere else I don't expect to take on any sort of debt.

i think i had about 5k debt when i graduated? then again i had a part time job for most of my college years... probably hurt my grades cause i didn't really have a lot of time to study, but nobody cares about your grades anymore as long as you get the piece of paper at the end.

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#49 Posted by krummi (121 posts) -

Am I some kind of weirdo here for not having debt? Middle-class, entry-level retail job, lives with parents who chip in some of the money, and commutes to state uni 6 miles away. Unless I decide to go to graduate school somewhere else I don't expect to take on any sort of debt.

btw, $26k is a lot of money, but it could be much worse. If they let you pay it over a long period of time, it's totally manageable. The way I see it, if college costs you more than a luxury car, there's something wrong there.

I had at most only 10 000FIM of student loan and paid it away as fast as possible. Living debt free feels pretty good.

Of course here in Finland things are quite different than in US. There is no concept of personal credit rating (yet) like in US so there is no point to juggle loans in order to have a good credit rating.

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#50 Posted by ichthy (1353 posts) -

Am I some kind of weirdo here for not having debt? Middle-class, entry-level retail job, lives with parents who chip in some of the money, and commutes to state uni 6 miles away. Unless I decide to go to graduate school somewhere else I don't expect to take on any sort of debt.

btw, $26k is a lot of money, but it could be much worse. If they let you pay it over a long period of time, it's totally manageable. The way I see it, if college costs you more than a luxury car, there's something wrong there.

Nah, I didn't have any debt coming out of university either. Between scholarships, parents, part-time working, living at home, and being in Canada, I had everything paid up. Even grad school was paid for by stipends and TAing. Tuition has almost tripled at my school since I was attending there 10 years ago though. Also US university tuition seems crazy in comparison.