Need advice on taking out loans for living expenses!

chasencleo · Aug 12, 2010

I feel your pain! I was in the same situation and opted to move back home with my parents. I rented my condo which pays for itself. I too have a car/insurance and credit card payments to worry about, but moving back w/my parents was the best decision I made. Good Luck.

DayDreamin ER CRNP · Aug 12, 2010

I am 'older' than most students (almost 40) and I have a daughter that is 10. My dh and I separated/divorced 4 years ago and I bought this little house in the same 'hood we were living in. I was a REALTOR at the time and making a decent income. My mother co-signed the mortgage with me. As the real estate market started to decline I knew I had to go back to school and follow my dream.

With my mom's help, I was able to go back full time. My mortgage is about $1k also and she is paying that for me while I'm in school. Yeah, it kinda sucks to be relying on my mom at my age but she knows this is necessary to have a consistent pay check and insurance for me and my child.

I also qualified for grants and financial aid. So far, I've gotten about $12k in loans and grants each year so after tuition I'm able to live off of the leftover money. I've definitely had to cut back on a lot of things I was just used to doing - nails, hair every 4 weeks, pedicures, etc.

Not sure of your exact situation but setting a budget and sticking with it has been a huge eye opener for me. My dd and I have actually gotten closer during this whole process. Because we are watching our budget, I'm clipping coupons, skimming the sale ads, meal planning, etc. Yeah, we still have to eat out every now and then just because we are so busy sometimes but we actually get a kick out of the whole coupon and money saving game.

There is no way I could do this w/o my mom's help and the grants and loans. I have always hated being in debt but I had to make an exception for myself.

Oh! I did take a PRN job just this past spring at the hospital as a tech. Luckily, my ex is really good about keeping our daughter and taking her to school and picking her up, etc and we live on the same street. I don't make a ton of money but it helps pay a few bills. I'm in class about 20-24 hours per week and I do have to study a little in there somewhere. I am not able to study as much because of the job but I'm still making As and Bs. I'm pretty happy with that. It really is all about sacrifice. This PRN schedule is pretty perfect for me and my family for now and I can pretty much work when I need to or can. This next month I'm only working 2 shifts but school takes a priority. There really is no possible way I could work more hours and still have time for my daughter and to study.

I guess you just have to prioritize and keep yourself organized. If I had to do it all over again, I would still take those grants and loans. I guess the biggest benefit for me is just not worrying about how I'm going to pay the utilities or buy groceries each week. That alone reduces my stress level significantly and I can focus on my school work.

good luck!!

meredith

Maseca · Aug 12, 2010

I absolutely plan on taking out fairly substantial loans to replace my lost income while I'm in school.

When I start school full-time, our income will drop by 1/2, since my husband and I both earn about the same amount. We too have a mortgage (try $3200, of course we live in Los Angeles, so housing is more expensive than most of the country), plus a teenage daughter. Thankfully our house is our only debt, so that helps considerably.

My husband and I have gone over how we feel about taking on school loans, and decided that as long as the debt load once I graduate doesn't exceed 1.5-2x my first year post-grad income, we're comfortable with that amount. I'm going for a MSN/NP degree, so I'm expecting to have about $150k of school loans by the time I'm done. We're comfortable with that because after graduation, we can maintain our current standard of living, put the entire difference between my current salary and my future NP salary toward loan repayment, and have that amount paid off in about 5 years. Plus, I plan on using the National Health Service Corps loan repayment program to further reduce the debt load which means we'll actually have the loans repaid within 2-3 years.

I guess what I'm saying is that you should sit down with a spreadsheet and work out a budget, research how much loan repayment will be each month, and how much your starting salary in your area will be. Use that to project a budget for post-graduation and determine how much debt you feel you can reasonably handle.

Also, you might want to talk to a financial aid person at your school. I've heard that its possible to get your FAFSA amended to show that you're quitting work to go to school full time, and that might help you qualify for grant money. You should also qualify for grant money in your second year of the program, since you won't have reported income. Really you just need to figure out a plan for one year, and that sounds do-able to me!

llg, PhD, RN · Aug 12, 2010

but how do people who plan to JUST go to school (maybe have a part time job) afford their living expenses?? Working FT at my current job is not an option.

I did it this way:

1. I planned ahead of time to go back to school (twice). During those times, I lived well below my income level and saved money each month. By the time I started school, my savings were sufficient to cover most of my living expenses for the first year of school. As my income dropped dramatically that first year back in school, that made me eligible for additional financial aid during my 2nd year of school and thereafter. That larger amount of financial aid paid for some, but not all of my 2nd year expenses and beyond.

2. I got a part time job to cover some of my living expenses.

3. I worked hard and won some scholarship money.

4. I took out small student loans to cover the remainder. But because I had saved ahead of time and worked part time, the loans did not have to be enormous.

Many financial experts recommend that you limit your student loans to no more than your first year's salary after graduation. Most people struggle to pay off loans higher than that. And even at that level, understand that you will have to make sacrifices to pay off that debt.

realgoldfearsnofire · Aug 12, 2010

Eek. It makes me cringe reading these posts. I would feel incredibly uncomfortable taking loans out for living expenses, and I wouldn't do it. Why would you pay interest on food and utilities and everything else? Not only that, but why would you pay interest on things you're consuming now several years later? What if you get sick or hurt and can't work like you expect? What if you (God forbid) hate nursing school, or fail, or can't find a job? Admittedly, I am not super comfortable with risk, so I sometimes let fear or worry override what would be a comfortable and reasonable amount of risk for other people, but...living expenses?

Here is what I do - I am single with a young child. I live with my parents and pay them a couple hundred dollars a month for rent. I also pay every bill of the household (utilities, phone, cable, etc). My parents pay their mortgage. We all buy food and cover our own expenses personally. I have a car payment and insurance, as well as day care expenses to the tune of $500 a month. I have a good job and I pocket as much as possible into a savings account, and I pay for each semester of school out of pocket. I work full-time and go to school part-time and the nursing program I am entering is part-time, nights and weekends.

So basically what I have tried to do is keep my living expenses low by living with my parents and paying them a fairly minimal amount of rent, and by working hard at my job to make decent money. I don't shop unless it's for things I need - I am kind of spartan in that regard and don't mind going without. I have a cheapo cell phone and plan, no frills. I want an MP3 player but won't spend the money on one :). I pay extra on my car payment so I'll be free of a payment soon and have an extra few hundred bucks to save.

A friend of mine put himself through school and paid off a house by filling every room of his 5-bedroom house with roommates - so he never had to pay a dime of money he earned at his job toward his housing expenses or utilities. He had a pretty decent surplus every month from just his renters. I don't know that I could have done what he did, but hey, whatever works!

I'm not knocking on people who do take out loans for living expenses - I realize some people need to and there are cases where it's like, well, I really need to do this or else I won't be able to go to school and improve my life. I would just encourage you to avoid loans for living expenses and do whatever it takes to keep them minimal, because you just never know what life holds years from now. Better to sacrifice today, if at all possible.

Scoots · Aug 13, 2010

I am returning to college full-time after almost 2 years of unemployment, so I have learned to live "dirt cheap" due to all of that. But I had some of the same questions in applying for student loans. I only qualify for loans, not grants, because I have a previous degree like you.

What I was told at my financial aid office is that they calculate the amount of the quarterly student loan based on the tuition, the books/fees, and living expenses. I had a maximum amount offered to me based on my previous year's income of being on UI money. After I pay tuition and books at the college bookstore, I get the remainder of the loan monies mid-term in the form of a check sent to my house. It's not a lot, but my partner works and we squeak by. I am not sure if I will be able to handle full-time school and working, but if so I will likely pick up a part time job if possible.

Things will be tight, but I figure I'll be too busy to care! I'm not sure how all this is going to work out myself. If you had a way to share expenses with family or a room mate that might help you to some degree. Good luck!

PacoUSA, BSN, RN · Aug 13, 2010

I have the same concerns as you, considering I already have loans out for prior education and am leaving full-time work to pursue an accelerated BSN. Loans seem to be the only option when one has a prior bachelor's degree. I would have to assume that working closely with the financial aid office of your intended school will help them get you as much money as you need to cover all your expenses. That is what I plan to do.

Saysfaa · Aug 16, 2010

"how do people who plan to just go to school (maybe have a part time job) afford their living expenses??" save up before starting school combined with paring down lifestyle and finding the ins and outs of keeping costs down. for example, clepping classes saves tuition, fees, books, suppplies, time/travel expenses. also, carpooling and/or moving near campus. also, brown bagging lunches. some take a second or third job until nursing school starts, even if it is short term work. the less time one takes getting ready, the more intense the process is.... as in, the more bare bones one's lifestyle gets, the more one works before school starts, and so on.

"is it uncommon for someone to take out some substantial loans for living expenses?" nope, it is fairly common... but that doesn't make it a good idea. not having debt gives people a lot of flexibility in what choices they can make. just one example: it can make the difference between keeping or getting a job i like or that would allow me to get to where i want to go and a job that doesn't do either but that pays enough to cover the debt.

it is (usually? probably? almost always?) less expensive to sell the car you can't afford and pay off the balance that to continue the payments on it. check out daveramsey.com