Need advice from current students and alumni about loans

jt43 · Mar 13, 2012

Several thoughts. First, as you are probably aware, there is a federal maximum on student loans. At Penn and JH, are you considered an undergrad for the ABSN portion of the program or are you considered a grad student from day 1? Some universities consider you a grad student from day 1, which makes you eligible for graduate student loans. The trade off is that your loans will typically be at a lower interest rate, but your tuition will be higher. I know at that Penn used to have their own loan program where they lent directly to students above and beyond the federal loan program. Their interest rate was comperable to that of the federal student loans. Not sure if that program is still in place. Talk to your financial aid advisor, I'm sure they can give you the latest info. As far as if it's "worth" it, only you can decide that. It's a lot of money. When you graduate, your degree is the same as any other NP across the country. You *may* have a better network in place to help you find a job, but that will depend on how much you network in school, and one can also network in a state school for a lot less money. Also, you might want to consider your ability to work directly as a NP upon graduation. Most NP jobs I see posted require 3-5 years direct patient contact. You won't have that and may find yourself working as a RN at a new-grad RN salary for the first 5 years while trying to repay both your old student debt as well as the private loans you take to complete the program. Best of luck to you! Sorry about the lack of formatting in my response, but typing on my phone.

Trauma Columnist · Mar 13, 2012

I did student loans (approx $42k) for my MSN in 2005 and nope, don't regret it all. I still owe about $18k but it is very doable getting paid it off early as my education provided me with a better job and more career mobility.

I vote that student loans are not like other loans: education is never wasted. If you do a car loan, you have a car for a few years, but education is for a lifetime.

Patti_RN · Mar 13, 2012

I'm a newly admitted student to Georgetown's Nurse Practitioner program where the total cost of just tuition is $72,000. Expensive? Yep. How am I doing it? I'm paying cash.

You say you don't want advice about how to avoid loans, but your current loans are part of your source of difficulty now-- so why incur MORE debt? This reminds me of all those Type II diabetes patients who recognize that they got into their current predicament by eating donuts, but now want to know how they can keep eating donuts but not end up with an amputation.

Find a way to pay off your current debts, save money, then reapply to the programs you want to attend. You might get a second job, move to a cheaper apartment, disconnect your internet service and use the library's--anything to trim your expenses and pay off your debt. Don't go to school until you're financially able to do so.

Apparently, you got similar advice from others, but dismissed it, and are here asking for some magic solution. Even if you got zero interest loans, you'll be paying for a long time in addition to the ones you already have. And, once you're strapped with loans you'll be looking for more loans because your paycheck won't be enough to pay on your debts and buy a car, house or even refrigerator without getting yet another loan or running up your credit cards (another even bigger mistake).

MeganJBear · Mar 15, 2012

I am taking out private loans to attend a well ranked school and don't regret it at all. The previous poster was a bit dramatic, you can have school debt and still buy a house!

For me, I was totally unhappy in my previous career and had always wanted to do nursing. You only get one life to live- so is being happy and following my passions worth 50K in loans? Absolutely. In addition, the increase in my salary x 30 years of working will more than make up for the interest I am paying.

Shop around for a good rate and have a plan. I have some money in savings to cover any emergencies that arise, and I have a realistic plan of what my finances will be like when I graduate and how much I will be able to put towards the debt. I am married so being able to count on my husbands salary does help, but my point is the same... Good luck!

Patti_RN · Mar 15, 2012

Megan, my advice was not overly dramatic. You're a very new student just entering an undergrad program at a state school, so your perspective is very different. Your tuition is about $12K per year--a bargain compared to UPenn, Georgetown, Vanderbilt, and some other private schools where grad tuition is more per year than yours is for the entire four years. The student already has undergraduate student loans, she wants to do an accelerated BSN that moves seamlessly into an MSN program. By the time she's done with this, she could owe $200,000--probably more--maybe much more.

As for my own situation, I avoid debt like the plague. I buy only what I can afford to purchase with money I already have. Not incurring debt means I postpone some purchases; it's the immediate gratification that kills people's finances. Sadly, tuition in our country isn't free (I believe it should be, but that's another discussion). So, the elation of, "I just got accepted to XYZ private school" is suddenly replaced with the sadness of, "I can't afford to attend XYZ" But, just like buying a car, there is always a way to do it--sign your name on the dotted line and promise you'll pay it back. Fine, until you graduate and have to pay $800 each month for 30 years for your college debt (if you owe $250K and pay it off-- not including interest--over 30 years!) Add taxes, car payments, utilities, household expenses to that debt service and your paycheck is dwindling.

Not only do you not have your wages available to you for current spending, your ability to save and invest is dramatically reduced. Again, my own anecdotal experience: Without debt I have been able to invest a significant amount every month (this is money others use to pay debt). At this point, the revenue on my investments far exceeds my income as a nurse--in fact, it far exceeds the income of the doctors and surgeons I work with. I wouldn't be in this position if I ever incurred debt.

If I couldn't afford to go to a top school, I would find a state school that I could afford... even if I had to wait a few years to attend. Why? Because, as a nurse or NP, where you go to school has little impact on your earning potential. In fact, most nurses have no idea if their colleagues attended a two year diploma school, a two year Associate program, or if they have a BSN or MSN. Sometimes the attraction of a particular university is the same as our attraction to a shiny new car or fancy piece of jewelry. Yes, some universities are much better than others, but if you go to an accredited school you can get a very good education and pay substantially less than you'd pay at the top private schools.

My advice goes beyond the realm of nursing. Virtually any personal financial planner or advisor would give similar advice. The one time I believe a person might consider debt is in the form of student loans. But, I'd certainly keep those loans to a minimum by saving money before attending, by choosing a more affordable school, by working even a few hours a week to off-set some expenses, and by cutting expenses in any way possible (cheaper apartment, finding roommates, getting a cheaper cellphone, not buying Starbucks, finding used textbooks, etc.) Yes, the prestige of a degree from a respected private school is enticing, but going to a less expensive state school then getting your PhD or DNP from that private school may be a more financially prudent option.

MeganJBear · Mar 15, 2012

The original poster specifically stated $44 in private loans. Very different than 200+. As for me, I AM in an undergrad program, but its my 2nd degree and my tuition is 17k per year for 3 years. I was able to pay off my first degree and I will be able to pay off my second degree. I created a budget- I know my expenses each month and I have a good idea of what my income will be when I am working again. I know exactly how long it will take me to pay off this debt and as I mentioned before I do have a solid emergency fund in place. Student loan debt is not always a bad thing- you just need to be smart about it and have a plan. Personally, I would not borrow 250K just to get an MSN, so we do agree there!

Patti_RN · Mar 16, 2012

She already has student loans ($40K? $100K?) the program costs for her accelerated BSN would be another $45K. The MSN/NP portion could be $60K (guessing on that figure--might be less but could be more). The total, so far--without living expenses, books, travel expenses, etc.--is already between $140K and $200K. Add all those other expenses on top and you're looking at beyond $200,000.

As I mentioned before, where you obtain your degree has little effect on your earning potential. Hospitals typically have pay scales for new hires and with experience a nurse's income rises. The same is true for working as a Nurse Practitioner--compensation is based on the revenue the NP generates--no one gets paid more because they incurred more student debt or because they went to a prestigous school. It's a fairly even playing field.

What really matters here is that students know what their choices ultimately cost, whether they really need to or want to take on tremendous debt and how that debt will impact their financial future and personal future and choices. When you consider how many nurses quit the field after 6 months or a year, the debt becomes even more of a concern. I would guess every new nursing school student sees nursing as his/ her destiny or their life-long ambition. What happens between the time they apply to nursing school and the moment they quit after less than a year? It would be bad enough to be so unhappy with a career that you want to quit, but if you have significant student loan debt (or any other kind of debt) you can't just walk away... you end up miserable and unhappy at work (and this carries over to your personal life).

It can be pretty intoxicating to be admitted to a presigious school, but when you're working for the next 20+ years to repay that tuition, you might wish you had made different choices. Unless, of course, you can actually pay for the tuition without becoming a prisoner to your debt.

DanaNP · Mar 16, 2012

Patti, I wish I had read your advice before entering my BSN and MSN programs. Yes, I was 'thrilled' at being accepted at a well-known, highly respected university, that I couldn't afford. Not one to turn down a chance to attend such a place, I took out student loans--and friends, family, and co-workers encouraged me to do so. They said such things as "you'll never regret education' and 'money well spent' AFter finishing my BSN I joined the workforce and realized that my $125,000 BSN gave me the exact identical paycheck as the 2 year diploma nurses hired with me! Fast forward five years when I decided to be a Nurse Practitioner: same deal. I got accepted to one of the best programs in the country and felt that I 'had to do it'. Another $60,000 in tuition (plus living expenses. At this point I wasn't living with my parents and had to pay for my own room/board, so that was an additional expense.

No one has ever even asked me where I went to school. It doesn't matter to my patients. And employers might like the names of my schools, but don't hire me becasue of them, they hired me because I have good clinical skills. I'm paid the same and get the same respect as the grads of less expensive universities. My total student loan bills are way over $200,000 and I'm not the only one in my MSN class who has this much debt. I pay my bills every month, but htere isn't much left over. Yep, these programs are great, but with some effort I could have learned as much at another college.

Humulus · Mar 18, 2012

Patti, how in the hell do you pay cash for your program? $72,000!!!! There's no way you can earn that much while going to school. Are you a mafia nurse or something?

mindlor · Mar 18, 2012

Lets step back. Why are you going into nursing? Only for job security/money? or did I read that incorrectly.?

If I did read correctly you may wish to re-evaluate.....

Patti_RN · Mar 18, 2012

It's not rocket science. My income derives mostly from investments that I was able to make over the years because I opted not to live beyond my means. Very little (proportionately) of my income comes from working as a nurse.

There was a great book written some years ago, The Millionaire Next Door. In a nutshell, if you avoid debt, live beneath your means, invest what you can, and resist the urge to impulse spend, you'll accumulate significant wealth over time. Is it easy or absolutely painless? No. But those who follow these principles will have net assests of far greater than all those who spend money on fancy cars, a daily Starbucks coffee, designer handbags and electronic gizmos. And, if you invest wisely, you'll be shocked at how much that money multiples. (Case in point. Had you bought Bank of America stock two months ago, you'd have doubled your money today. The next challenge is to avoid taking your BofA investment out of the market and buying another fancy car!