$40,000 to $50,000 a year sounds like a lot when you are bumming gas money from friends and parents and living off Raman Noodles. But that same salary after taxes, rent, utilities, gas, food and entertainment leaves them thinking that they had it good while they were in college. US News and World Report recently published a study that 70% of college graduates are leaving college with close to $30,000 in student Loans. Forbes recently reported that average annual salary for all majors is close to $40,000 per year. Put those averages together and what you get is pressure for the average college grad. And if you add Master or Doctor to the name you have a potentially lethal concoction.
What’s the math you say?
- If you borrow $30,000 repayment is $350 a month*
- If you borrow $50,000 repayment is $555 a month*
- If you borrow $75,000 repayment is $832 a month*
- If you borrow $100,000 repayment is $1110 a month*
*According to Bank Rate Calculator with 6% interest repaid over 10 years.
And heaven forbid that you marry into another student loan. When a $30,000 loan marries a $50,000 loan they have a $905 monthly payment. And if one of them wants to be a stay-home parent when the kids come. Look-out simple life-style!
Are we saying you shouldn’t get a student loan? No, the college degree is still a very strategic tool to land a great job. But let’s not mortgage our future at the school debt counter. The main point is to develop a strategic career plan and do the math!