Is $35,000 a lot of debt for school loans for 4 years of college?

Question

... I plan on getting a B.S. in computer science and hope to work in that field... so will $35,000 be a lot of debt overall?

I appreciate any information you can give me. Thanks.

Answer 1

One way to answer a question like this is to look at the long-term financial implications of student loan borrowing. This is a financial decision, so you should consider the cost/benefit of borrowing versus not borrowing.

The standard repayment period for a student loan is 15 years (180 payments). If you borrowed  $35,000, split evenly over 4 years, at 6.5% interest, your monthly payment would be $297 a month. By the time you paid off the loan in full, you would have paid $53,469.

If you borrowed that same $35,000 at 8.5% interest, your monthly payment would be $335 a month. The total payoff for this loan would be $60,444

I selected these two particular interest rates for illustration purposes because the current rate for the Stafford loan is 6.5% and the current rate for the PLUS loan is 8.5%

Knowing that, let's take a look at the average salary of a computer science engineer:

According to the US Department of Labor, the median salary of computer and information scientists for 2007 was approximately $95,000, which translates to a little less than $8000 a month. (Keep in mind that median means that half make more and half make less).

No matter how much you make, there is no question that a monthly obligation of $300-335 a month payable for 15 years - is a significant and long-term obligation, but consider the alternative. If you don't finance your college education with the necessary loans, what chance to you have of earning a $100,000 annual salary?

Keep in mind one more thing - payments on your student loans don't become due until some time after you have completed your degree program (it's a matter of months, with the particular number depending  on the type of loan).

Remember, however that interest accrues on the unpaid balance, from the day the loan(s) are first disbursed. While you're in college (and not making payments), the unpaid interest will continue to increase the balance owed. Eventually, when you do begin making your scheduled monthly payments, you'll wind up paying interest on all of the accrued interest that you weren't paying all along.

If you're in a position to pay the monthly interest on your loans while you're still in school (which you're allowed to do), you'll save yourself a bunch of money in the long run. Something to think about.

Anyway - I hope it helped to look at some actual numbers. When it comes to considering student loans, you should always think about them as a form of investment in your future. If borrowing a reasonable amount today creates the opportunities for a better future, the money is well borrowed and well spent.

By the way, according to the most recent available figures that I was able to turn up (from the National Center for Education Statistics), the average undergraduate student graduated with $19,237 in debt in 2003-04. The same survey indicated that 65.7% of all undergraduates graduate with at least some educational debt. One quarter of all students had borrowed more than $25,000, and one in ten had borrowed more than $35,000.

Good luck to you!

Answer 2

Hi,

Unfortunately, this is not too much to expect to owe after you finish college.  I am going back to school for my masters and I will owe 32,000 for two more years of school.

Good luck

Answer 3

There are two sources for student loans -- the federal government and private lenders. In order to obtain most federal student loans, you will first need to file the Free Application for Federal Student Aid (FAFSA). A college student loan is a sum of money available to full time students, with a minimum level of interest required during the period in which they are registered as full time students. These types of loans rarely cover the entirecost of education, and most applicants refer to other<!--financial aid options in order to meet their needs.In most instances the FAFSA is required for all federal financial aid including federal student loans. Deferment options are available while you are still attending school at least half-time.  There are four main federal loan programs.

http://best-loans.awardspace.com/student...

Federal loan consolidation is for students who are in repayment status or parents who wish to extend the repayment period on their current PLUS and obtain a fixed interest rate for the life of the loan-->you can combine all of your eligible federal student loans into one loan with a Federal Consolidation Loan. Consolidating also locks the interest rate you pay on your loan.

Answer 4

Unfortunately----$35,000 isn't too bad, after four years.  Be prepared, though, it is not unusual for it to take 4 1/2 - 5 years to get that Degree.  It will be worth it, though.  You will have something that can never be taken away from you AND you won't be slinging hamburgers, or washing cars the rest of your life.  Computer science is a good field to get into--earn money with your brains, not your bod.  Do apply for all grants, aids, scholarships and anything else you can find.  Good Luck to you.  You already are a smart kid!