Debts are the Whips and Shackles That Will Enslave You

[KeepItRealRN]

1. The truth out there is that for the most part with rare exceptions, Hospitals don't care where you went to school. Taking out tens of thousands of dollars in student loan debt to get a "designer" degree will not make you more competetive. It will however limit your opportunities because you have to generate a siginificant cash flow in order to pay off your debt.

2. When you do finally land your first job it most likely won't be the one you want. We all have to start somewhere to get our "foot in the door". When you have big debt you don't have the luxury of being able to be "between jobs". You will need to keep your crappy job no matter how much it sucks unless you have another one lined up and ready to go. Being without a paycheck even for a couple of weeks is not an option.

3. Big debt puts you in a position where you must "put up" with conditions you might not otherwise be willing to put up with because you can not afford to lose your job.

4. Money has been described as the "root of all evil", but the fact is that in our society (money=freedom). If you don't have it, or worse yet if you owe it to someone, then you are being controled.

Having said all of this, your outlook on life in general will be much improved when you go to your job because you "choose to" rather than "have to". I'm not saying that I am independently wealthy by any means. I have to work to live like everyone else but I do it on my terms.

Think about this, a lot of us before school worked jobs that didn't pay nearly as much as nursing and we got by OK. We did however had to work full time and then some to make ends meet. If you stay out of debt, you can make the same amount of money working a minimal amount of hours. This affords you to have a large quantity of something that is simply priceless and that is "time".

There are 3 types of poverty in this life and they are

1. Poverty of cash

2. Poverty of time

3. Poverty of the soul.

Solving "poverty of cash" by living in "poverty of time" is not a good trade off. We are all given a limited amount of time here on earth. When we work we are basically selling our time. I don't know about you but my time is priceless to me and I will only sell it to the highest bidder on my terms. However this is only possible if you plan it that way and stay out of debt.

[TheCommuter, BSN, RN]

there's a for-profit school in southern california called west coast university. if you want to earn a bsn degree and the chance to take nclex, the tuition is approximately $132,000 to attend their school of nursing.

let's crunch some numbers. . .

a student who borrows $132,000 to attend this school and finances the tuition over 10 years at an interest rate of 6.8% (stafford govt. loan) will be stuck with a staggering payment of $1519.06 per month.

in reality, the payment will likely be higher since low-interest government loans wouldn't cover the entire balance, and the student would likely need to turn to private loans with higher interest rates. the payment could also be lower if the student was able to transfer a handful of prerequisite courses. still, it is not good to start one's life and career with this much debt.

[joanna73, BSN, RN]

Yes, thank you Fiona. Also factor in that I'm single and have a mortgage. Hopefully, my goal is to retire with x amount by the time I'm 58. Maybe work casual. If I owe 100 grand and have 20 years to pay that off, AND the large chunk you need to retire...well, probably not going to happen owing 100 k. Trust me, I've done the math. And it IS the interest that kills. That's the problem. Thankfully, I only owe 22k.

[KeepItRealRN, BSN, RN]

I am starting to doubt the mathematical ability of people on this board.

If debt was so evil then no one would go to medical school...they come out 250k in debt and guess what, they earn enough to pay it off.

Those with 250k in debt can pay it but they are slaves for many many years in order to do so.

So here are my numbers. The average new grad in the US makes about 25/hr which is 52k/yr which is $2000/2wks.

After federal taxes, social security, medicare, that paycheck is reduced to $1460/2 weeks.

If you live in a state with state income tax, reduce that amount by roughly another $100/2 weeks

If you plan on having health insurance deduct another $100/2 weeks

If you plan on retiring then contribute at least 10% of your gross to your 401k/403b

you can see that after doing all of this your take home pay is reduced to the neighborhood of $2000/month

If you pay 100k for a BSN, the payment for that loan at 5% over 30 years would be $536/year.

That leaves the poor new grad with about $1500/month to live on. The student loan takes about 25% of the persons take home pay.

To top all of that off, my figures represent working 40 hours a week. I don't know about you but working 40 hours a week sucks, plain and simple. 2-3 of the grads workdays are going to debt payment. If that debt wasn't there that is 2-3 days less he/she would have to work.

Not to mention if one has any ambition of going to graduate school, that debt could really make things difficult.

By all means go to school, but don't sell yourself into slavery. Expensive schools are for those who can afford it or who have parents who can afford it.

[SunSurfRN]

Sunsurf RN, that's a rather condescending remark. My math is just fine, thank you. Keeping in mind all of my other expenses, and as well as the interest that would accrue on 100 grand, it WOULD take many many years to completely pay that amount, starting from age 38.

I am very good at budgeting. I also do not plan to work full time to age 65. So my previous remark still stands.

1.2 mill, to pay 100k.....just convince me as to why I should not see why this is not a hard debt to pay off.

[SunSurfRN]

Those with 250k in debt can pay it but they are slaves for many many years in order to do so.

So here are my numbers. The average new grad in the US makes about 25/hr which is 52k/yr which is $2000/2wks.

After federal taxes, social security, medicare, that paycheck is reduced to $1460/2 weeks.

If you live in a state with state income tax, reduce that amount by roughly another $100/2 weeks

If you plan on having health insurance deduct another $100/2 weeks

If you plan on retiring then contribute at least 10% of your gross to your 401k/403b

you can see that after doing all of this your take home pay is reduced to the neighborhood of $2000/month

If you pay 100k for a BSN, the payment for that loan at 5% over 30 years would be $536/year.

That leaves the poor new grad with about $1500/month to live on. The student loan takes about 25% of the persons take home pay.

To top all of that off, my figures represent working 40 hours a week. I don't know about you but working 40 hours a week sucks, plain and simple. 2-3 of the grads workdays are going to debt payment. If that debt wasn't there that is 2-3 days less he/she would have to work.

Not to mention if one has any ambition of going to graduate school, that debt could really make things difficult.

By all means go to school, but don't sell yourself into slavery. Expensive schools are for those who can afford it or who have parents who can afford it.

Yes, but you can contribute to a 401 and reduce taxabale liability...you can write off the interest on the student loans, and lets not forget you can work more shifts or PRN like I do. I work a full time job plus PRN and only wrk four days a week.

I just see alot of negativity....not sure why no one sees the positives.

[joanna73, BSN, RN]

Well, as I mentioned SunsurfRN, various factors come into play. If you're single, and carrying the load, a loan payment of say 800 to 1000 a month on top of all of the other expenses can be very staggering. Every 2 weeks, my deductions are between 1100 to 1200 dollars. Yes, it is that high. On top of tax, we pay union dues, dental, medical. Rent/ mortgage is 1000 or more where I live.

So, you'd be very poor shelling out a huge student loan payment on top. Now, I'm not complaining. I don't owe 100 k, and I make about 80 k a year. My comment was an observation, because many people are facing huge debt. Also, not everyone wants to work till age 65, and these days, few people have steady full time nursing jobs, especially new grads. With interest, that 100 grand in Canada would amount to about 140,000. Not fun to pay for 20 years or more.

[joanna73, BSN, RN]

And yes, you could work more....but who needs that? Life is a balance. I refuse to be a slave for the government.

[KeepItRealRN, BSN, RN]

Yes, but you can contribute to a 401 and reduce taxabale liability...you can write off the interest on the student loans, and lets not forget you can work more shifts or PRN like I do. I work a full time job plus PRN and only wrk four days a week.

I just see alot of negativity....not sure why no one sees the positives.

Working full time and then some is not my idea of a quality of life I want to have. Why on earth would someone want to put himself/herself in a postition to have to work that much? 4-12's a week is hard unless you're young which I'm guessing you are. Years down the road working that much takes its toll on you and not only that you start seeing your time on earth as finite and don't want to spend it all working to pay off debt.

When I went to school, I borrowed money but it was a reasonable amount that could easily be paid back. I made it a priority to get that monkey off my back ASAP and had it all paid off within 4 years of graduation. I also paid off my car that year and have been debt free ever since.

I worked .9 for many many years and a couple of years ago was able to drop to .75. That is 5-12's a pay period or 10 shifts a month. I'm telling you dropping that one day a pay period improved my mental health and quality of life in a way I can't describe. Right now work is a vehicle that allows me to have a life. There is a big difference between working to live and living to work. I enjoy my family, and have plenty of time to do hobbies and things I enjoy. If I want to make some extra cash, the shifts are there for the taking.

[joanna73, BSN, RN]

Craig RN triple kudos to you! I am a second career nurse, and I have learned the value of having a LIFE. Yes, I like nursing, but it does not define me. Work less, not more is my motto. I've learned the hard way. So my expenses fall in line with this. When I was asked if I wanted full time at work recently, I said no. Loans or not, I will not kill myself to pay them. And 4 12s every week sucks big time.

[TheCommuter, BSN, RN]

the following weblinks and post were pulled from another current thread, but i have decided to post them on this discussion since we are discussing debt as another form of a ball and chain.

http://money.cnn.com/galleries/2011/news/economy/1106/gallery.student_debt/index.html

http://finance.yahoo.com/college-education/article/113010/degree-not-worth-debt-cnnmoney

facing college costs that are rising far faster than incomes, many americans are relying on massive amounts of debt.

we talked to seven people overloaded with student loans. here is erik's story. (click through the rest of the gallery for other profiles.)

[cogath]

Okay, thanks for the reminder of the depressing reality of my situation. Now, what do you do with 70k in debt?

[Not_A_Hat_Person, RN]

You got that right. And they are creating a college bubble in much the same way they created a housing bubble. The truth is when it all comes out people are going to start defaulting on their student loans left and right. But wait, you can't have your student loans wiped out by a bankruptcy anymore. So you will owe that money until the day you die. Every time you get a job and a pay check, Uncle Sam will be there to take a chunk of it. Don't have enough left to live on? Not our problem.

The government is responsible for making student loan debt non-dischargeable (which was a huge overreaction to the actions of 6 med students), but colleges are creating the debt bubble. Some schools have raised their tuition solely to attract students who are looking at similarly expensive schools.

In some fields (even nursing), the name of your college matters. I attended nursing school in Boston, where the name of your nursing school definitely matters. State schools can be just as expensive as private schools. UVM charges $14,000 a year for in-state tuition and fees. Meanwhile, Concordia University in Montreal charges $17,000 a year for everything, including international student fees.

As far as getting out of debt, I'm a big fan of Michelle Singletary and (less so) Suze Orman. Dave Ramsey is too religious for my tastes. If I want to know what Jesus said about something, I'll read the Bible, not a book about financial planning.