Help figuring out how much is too much debt?

Question

I plan on getting my b.s. in medical technology. Supposedly I'll be able to make about $40,000 to $50,000 a year. I don't know if I really will or not but hopefully. Anyway, supposing that I really did make that much, how do I figure out how much debt is too much?? Right now I only owe about $2000 but I'm going to lose my scholarship before I finish b/c it's only a 4 year scholarship and I'm going to finish in 5 years. So I'm guessing I will end up with around $6,000 in debt. at least. I might want to borrow more than that for personal reasons. How do I figure out how much debt is too much debt?? Is there some kind of calculator for this?

Answer 1

You are in a great position! Most students have $25,000 in debt after they finish school. There is no set amount, but you should be able to make repayments without suffering once you have a job.

Feel free to consult a banker or financial planner for a free consultation with any more questions.

You also may be able to apply for other aid: scholarships, grants, federal loans or private loans. Be sure to research your options and talk to someone at your college.

Answer 2

good rules are these.

1. Never borrow your first two years of your undergrad.  This is when most folks drop out and all they have to show for it is loans they cant afford to pay back.

2. Never do private loans.  Period.  If you can't attend on grants, scholarships and federal student loans,  (with better interest rates, no cosigners, no credit check, deferred payments, sometimes the interest is paid for you while you are in school) then you need to find a better school.  

3. Never borrow more (over the course of your college career) more than you would expect to earn your first year out of college.  Example: borrowing 120,000 to earn your become a doctor is great because you will earn that when you graduate.  Borrowing 120,000 to be a kindergarten teacher is not good unless you expect to make that after you graduate.  This is to assure you will be able to afford the payments.

5. Quick guesses when figuring payments is around 10%.  A total loan balance of 120,000 would earn payments of around 1,200.  a month.  Total loan debt of 24,000 would earn payments of around 240 a month.

6.  NEVER EVER EVER EVER consolidate your loans.  This is a scam created by bank folks to get more of your money!!  Always choose the same lender.  Rates are always the same.  Federal student loan interest is lower than most of the refinancing options, not to mention if you do manage to get a lower rate, you STILL pay more because rather than paying interest for 10 years you stretch it out to 25 years or more.  Also federal student loans have benefits you loose when you refinance, like mandatory deferment options, discharge options.  Also most people don't realize that even if you have more than one loan, you still only have to make one payment!  I graduated with around 9 loans and for my entire payment period I always only sent ONE payment and my money was automatically distributed to all my loans.  EASY!

Answer 3

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Answer 4

There are some loan repayment calculators that you can use online that can help you determine how much your monthly payment is.  It is difficult to tell you what is too much to pay as your circumstances are unique to you.  

It does sound like you will not come out of school too deep in debt though compared to what others end up borrowing.  Finaid.org has a some calculators on their site that may be helpful.  If you have more questions about repayment I suggest you speak with your school's financial aid office.  They can answer these sort of questions regarding how much you will pay based on loan debt incurred.

http://www.finaid.org/calculators/

Good luck!

Answer 5

Don't know your state, some are more expensive to live than others, but

Look to the future and consider all things i.e., cost of living, car and other expense PLUS the repayment plan for you educational loans.

You should come up with a ball park figure.