Are private loans worth it?

[ekgoodwi]

Hi all, I have a question about private student loans in relation to the typical salary/job outlook for a new grad ADN. I am attending Roxbury Community College's RN program starting next week. I did not qualify for grants based on income (ha!) and Roxbury does not accept ANY federal loans. This leaves me with the only option of taking out private loans at a variable APR upwards of 9.95%. I have done the math and I will be responsible for repaying about $27,000 at the end of the two year program. Based on your experience, would paying off this loan at 200-300$ a month be feasible for a new grad? I am not sure how much they get paid, and I know that most Boston hospitals aren't hiring ADNs. I am trying to decide whether to wait another year and apply to a different school, or to just bite the bullet and take out the loans. I am almost 30 and eager to finish school, so time is a factor for me. Thanks for your thoughts!

[AZMOMO2]

First... how can a Community College not accept federal student loans? According to their website : They do!

The Financial Aid Office at Roxbury Community College assists students and their families in meeting the costs of a college education. Roxbury Community College participates in a wide variety of federal, state, and private financial aid programs. Students should be aware that all institutions, including Roxbury Community College, are subject to adjustments in funding allocations from both the Commonwealth of Massachusetts and the United States Department of Education. ( So look into this further file a FAFSA ) go federal before going private!

Second... as someone who worked in Student Loans, and heard the sob stories of those taking both types of loans and heading into default... just remember that private loans have no recourse if you can't find a job and pay when the payment is due, very few have options like federal loans do for alternate payback and variable interest rates can HIKE if you are late 1 day with your payment.

Good luck!

[curiosity123]

i agree with azmom02 - try to get federal loans.

prior to the economic down turn, many would comment that total college loan debt should not exceed your expected first year salary - but with the rate of unemployment right now, you can not be sure you will get any job right away!

you can plug in different loan values at this website.

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

assuming a 10 year loan at a fixed rate of 6.8% it is estimated that you will need an annual salary of at least $37,286.40 to be able to afford to repay this loan. the monthly payments would be 310 $ a month. however, with a variable rate the payments will likely be higher.

[color=#336699]

student loan calculator

loan balance:

$27,000.00

adjusted loan balance:

$27,000.00

loan interest rate:

6.80%

loan fees:

0.00%

loan term:

10 years

minimum payment:

$50.00

monthly loan payment:

$310.72

number of payments:

120

cumulative payments:

$37,285.87

total interest paid:

$10,285.87

note: the monthly loan payment was calculated at 119 payments of $310.72 plus a final payment of $310.19. it is estimated that you will need an annual salary of at least $37,286.40 to be able to afford to repay this loan. this estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. this corresponds to a debt-to-income ratio of 0.7. .

much more info availalble at the website

[ekgoodwi]

Thanks for the detailed information everyone. Unfortunately Roxbury does not deal with any Federal loans. They take grants but there was a scandal at some point involving theft of Federal loan money by the school, and the Feds blocked them from handling any money. At least that's what I glean from searching the net. Their RN school is accredited though, and it's where I got in, so I'd like to find a way to stay there. I just don't know if I can make this work though. Thanks, again.

[kfarinato]

Personally I would go somewhere else. I took out a combo of Federal and Private loans and from my experience with Private loans I wish I hadn't. Sallie Mae is the only company that lends in MA and they charge 10% interest for excellent credit. My total loan debt is around $30,000 (not including credit card debt that was racked up during school) and I sometimes regret not going to a public school, however I can say I graduated with Honors from one of the top nursing programs in the state.

[EEO22]

Kfarinato,

I am faced with a similar situation, I have been accepted to public institution that is 1/2 the cost of the private institution. I would ideally like to go to the private institution b/c it is one of the top nursing programs in the state. If you had to do it over again, would you go private or public? I am wondering if you found a job right after you graduated? From your experience does it really make a difference in placement if you go to a private vs. public institution?

[kfarinato]

I am grateful for my education, I am preparing to take the boards on the 12th and as I review I realize how well prepped we are. I do not have a job yet, but in the past (when the economy was better) alumni from my school were hired very rapidly. They have really good relationships with numerous hospitals in the Greater Boston area.

The only reason that I wish I had gone to a public school is Financial! It was super expensive to commute to school everyday (45 min each way), took a toll on my car, and I think I am permantly exhausted.

[EEO22]

Thanks for the reply. Great Job on finishing school and GOOD LUCK on the exam! :)

[NeNe25]

ekgoodwi- check out Wachovia for private loans.