Worried about paying off student loan debt

wirehead · Nov 16, 2013

...ah so there is some hope! That sounds almost literal to what I will owe.

If you can call having taken 6-1/2 years to pay off federal loans and still having 40K in private loans left hopeful, you are a very optimistic person.

OCNRN63, RN · Nov 17, 2013

A hundred thousand dollars is a a lot of student debt and nursing positions are hard to come by these days.Student loan repayment calculator
Enter your Number of Monthly Payments, Simple Interest Rate, and Principal Amount of Loan.
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[TD]Number of Monthly Payments[/TD]
[TD=align: right]120[/TD]
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[TD]Sample Interest Rate[/TD]
[TD=align: right]6.8[/TD]
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[TD]Principal Amount of Loan[/TD]
[TD=align: right]$100000[/TD]
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[TD]Your Monthly Payment Will Be[/TD]
[TD=align: right]$1150.80[/TD]
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[TR]
[TD]Your Total Interest Cost Will Be[/TD]
[TD=align: right]$38096.39[/TD]
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[TR]
[TD=colspan: 2, align: center]Minimum annual salary to handle these payments: $ 172620.00
Wow..........[/TD]
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[TD=colspan: 2, align: center][/TD]
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That's a mortgage. Suze Ormon would have a cow if she saw this.

OCNRN63, RN · Nov 17, 2013

I think what we have here is the next financial crisis.
default of student loans.

I wouldn't be surprised. What the heck...we bail everyone else out.

manusko · Nov 17, 2013

...ah so there is some hope! That sounds almost literal to what I will owe.

Not sure if it matters what degree you are earning but loan repayments went from 20 year plans to 10 year plans.

OCNRN63, RN · Nov 17, 2013

For federal loans yes- but you have to qualify for it. I don't know, I may be wrong for saying this but I would much rather pay less/month and increase the time of loan than kill myself for a shorter period of time. Sure I'll be paying an insane amount of interest at the end, but I won't be thinking about it when I'm able to live a normal life and not struggle to the point of insanity!

Paying all that interest is giving the company who gave you the loan all that extra money. Imagine what you could do with that money if it were in your pocket instead. Temporary pain= long term gain.

Editorial Team / Admin · Nov 17, 2013

That's a mortgage. Suze Ormon would have a cow if she saw this.

Heck, my mortgage is less than that loan payment. I understand inflation and all of that, but good grief! I graduated from my BSN program in 2005 having paid $45,000 total- for 5 years at a private college (changed majors in sophomore year). I took advantage of as many scholarships as I could apply for- my total debt after graduation was less than half the cost. My MSN program totals about $25,000- only $16,000 in loans, and a big chunk of that will be paid off by tuition reimbursement payments over the next year. I still can't believe people are paying more than what I'm paying for two degrees for an undergraduate degree.

As for the OP's question, it all depends on how you budget and what you're willing to sacrifice. I wanted to pay as much of my graduate degree out of pocket as I could. This means I drive a 10 year old car that is paid off, haven't taken a vacation in three years, and save every penny I can. Those pennies will be going to pay off my student loan- at 6.8%, it's the highest interest rate loan I have (even higher than my mortgage!). If I can afford it, I fully intend to pay more than the minimum payment so that I can pay it off sooner and pay less interest.

brandy1017, ASN, RN · Nov 17, 2013

I have 65K which I will start paying on next year. Fact is, I will do what I can each month but I am not going to let mortgage/utilities/fuel/food suffer to pay the loan back. Yes, I know I owe it. Yes, I intend to pay it but with jobs as low paying as they are where I live and as scare as they are - $1500 is an absolute no go - in fact 1/2 of that would be for me - I too went to a private school. I will do what I can but am not going to stress over it - I stress enough about meeting day to day expenses that rise continuously while my salary stays the same.

Unfortunately it is naive to say that you are not going to let your living expenses suffer just to pay the student loan! The student loan must be paid and they don't care what you make or how much it costs you to live! That is not their problem, they only care that the money is rolling in and actually if you aren't able to make the payments that is perfectly fine with them because they will be happy to wait for you to default because then the money train really starts rolling. If you default they get to add 25% in fees and then capitalize it and the interest and now you owe 2-3 times what you borrowed and they will get it one way or another until you die! Whether garnishing wages, confiscating your tax returns, even your social security! There is a lot of concern that so many are defaulting on their student loans and the number is grossly under reported because they base their statistics on two and now three years out of school. Many people default after being out of school many years due to low wages, underemployment, and layoffs! Some of this is due to ignorance on the part of the students, but aided along by the lenders who make more money when you default. Also you can defer or forbear your loans but that is time limited and depending on the loan interest is accruing and being capitalized during this time. When the time limits run out you are out of luck and will default if you cannot make the payments! Income base repayment only applies to govt loans, private loans or parent plus loans and you're out of luck! Income base repayment allows for negative amortization so the loan keeps growing and unless you are able to get loan forgiveness which is difficult to get and hard to qualify you will be on the hook paying loans for 20-25 years and then the amount written off is taxable! You cannot walk away from the debt unless you are prepared to move to another country! Some people have done just that! Others have committed suicide over the massive student loan debt they were trapped in! This is the worst type of debt out there as there is no bankruptcy option and since this is the case there is absolutely no incentive for the lenders to work with you if you cannot make the payment. They get a lot more profit over letting you default and that is fine with them because they know the govt will pay them off and then they own the collection agency that will slowly but surely keep taking the money from you however they can. They get to double dip! On top of that if you default you can actually end up with your license to practice being revoked or withheld and that applies to any job that requires a license, not just nursing!

rumwynnieRN · Nov 17, 2013

Hrm. I owe ~$60,000+ in federal+private student loan debt. Long story, went to two nursing schools, one far from home (didn't do great), moved back home, and got my BSN, passed boards the month after graduation. I realize my situation isn't representative of everyone, but after some calculations, discussions with my husband, and figuring out what can be cut out and what can't, I figured I could pay this off in around 3-5 years. I also found out prior to graduation that one of my federal loans qualified for "forgiveness" since nursing is considered something I can't remember at the moment. I was told by the people at Nelnet and the Department of Education that if I consolidate my federal loans (totaled at ~$29k), the "forgiveness" applies to all of my federal loans, and if I worked at a public hospital (like the VA, the county hospitals), then the entire debt is forgiven -- as in you don't pay it back. You'd have to work at that hospital for a few years though. Here's the link for that: Public Service Loan Forgiveness | Federal Student Aid

Even if none of your federal loans qualify for forgiveness, the VA is one of some federal institutions who will pay back your loan (and you can get an interest decrease as well) provided you work for them for however long they calculate (I would've worked ~10 years for them if I had landed a job with them). That's assuming you get a job at the VA. There's a cap of $60,000 if you go this route, but that's $60,000 you don't have to pay back. Here's a PDF from one of the VAs: http://www.nynj.va.gov/docs/slrpsummary.pdf

My original plan after nursing school was to stay at home (plans changed, and I moved after nursing school to be with my spouse), work the hours I work now (3 12's plus one extra so I get 16 hours of overtime), and I would've had my loans paid off in 1 to 2 years. I had the same anxiety you have now about paying off my debt. When the prospect of a job is really far away (or seems impossible as it is with so many new grads), a number with 5 to 6 digits is really scary.

I have no idea if any of this will help you, and please don't think I was trying to endorse the VA as the best place to work (I'm sure there are many nurses on here who will say no/yes/sometimes/something), but I had looked into my options a semester before school was definitely going to be over (my husband is in the military so rent/water is taken care of; I pay electricity and the rest of my bills, and we take turns for who pays for groceries. We also don't have children so I can put a lot more money into my payments). I have no idea how some of my coworkers were able to get away with deferring their loan payments, but some of them have managed to put it back, and sometimes I think had I done that (combined with the ability to seriously save), I could've just paid everything in one payment.

joanna73, BSN, RN · Nov 17, 2013

I think what we have here is the next financial crisis.
default of student loans.

Agreed, and this is happening all over the world. I'm interested in migration, so I've been studying nursing trends for the last 10 years. Since 2007, nursing has been on a downward spiral for various reasons. First it was the recession, now new models of care are being introduced which reduces the number of positions even further. Unless you're willing to work rural, which most people aren't, jobs are scarce.

I would seriously caution anyone against nursing right now, and if you are taking loans make sure you can comfortably pay them off. New grads and experienced nurses from 2 and 3 years ago are still struggling to obtain employment. Just be aware that whatever the economic climate is, the government still expects their money, and you need to live too.

Furthermore, many States will hound you until the loan is paid. Defaulting is just not an option anymore because too many people figure they can avoid the payments. Rule of thumb is usually one year's salary, with respect to the loan amount that can comfortably be paid off.

rubato, ASN, RN · Nov 17, 2013

For federal loans yes- but you have to qualify for it. I don't know, I may be wrong for saying this but I would much rather pay less/month and increase the time of loan than kill myself for a shorter period of time. Sure I'll be paying an insane amount of interest at the end, but I won't be thinking about it when I'm able to live a normal life and not struggle to the point of insanity!

I think this is the biggest mistake you could make. Work extra shifts, have no life and pay those suckers off fast. You will be out of pocket less money and it will all be over sooner. Paying extra interest and dragging it out is not a good idea financially.

manusko · Nov 17, 2013

Hrm. I owe ~$60000+ in federal+private student loan debt. Long story, went to two nursing schools, one far from home (didn't do great), moved back home, and got my BSN, passed boards the month after graduation. I realize my situation isn't representative of everyone, but after some calculations, discussions with my husband, and figuring out what can be cut out and what can't, I figured I could pay this off in around 3-5 years. I also found out prior to graduation that one of my federal loans qualified for "forgiveness" since nursing is considered something I can't remember at the moment. I was told by the people at Nelnet and the Department of Education that if I consolidate my federal loans (totaled at ~$29k), the "forgiveness" applies to all of my federal loans, and if I worked at a public hospital (like the VA, the county hospitals), then the entire debt is forgiven -- as in you don't pay it back. You'd have to work at that hospital for a few years though. Here's the link for that: Public Service Loan Forgiveness | Federal Student Aid
Even if none of your federal loans qualify for forgiveness, the VA is one of some federal institutions who will pay back your loan (and you can get an interest decrease as well) provided you work for them for however long they calculate (I would've worked ~10 years for them if I had landed a job with them). That's assuming you get a job at the VA. There's a cap of $60,000 if you go this route, but that's $60,000 you don't have to pay back. Here's a PDF from one of the VAs: http://www.nynj.va.gov/docs/slrpsummary.pdf
My original plan after nursing school was to stay at home (plans changed, and I moved after nursing school to be with my spouse), work the hours I work now (3 12's plus one extra so I get 16 hours of overtime), and I would've had my loans paid off in 1 to 2 years. I had the same anxiety you have now about paying off my debt. When the prospect of a job is really far away (or seems impossible as it is with so many new grads), a number with 5 to 6 digits is really scary.
I have no idea if any of this will help you, and please don't think I was trying to endorse the VA as the best place to work (I'm sure there are many nurses on here who will say no/yes/sometimes/something), but I had looked into my options a semester before school was definitely going to be over (my husband is in the military so rent/water is taken care of; I pay electricity and the rest of my bills, and we take turns for who pays for groceries. We also don't have children so I can put a lot more money into my payments). I have no idea how some of my coworkers were able to get away with deferring their loan payments, but some of them have managed to put it back, and sometimes I think had I done that (combined with the ability to seriously save), I could've just paid everything in one payment.

You also have to make 120 payments before you can qualify. So it's not a few years, it's 10 years.

itsmejuli · Nov 17, 2013

What's the break even point with your $100k loan.....when is that debt going to pay you off in the long run?

How long will it take you to find a nursing job? What will the entry level pay be? Will you have to move to find a job?

IMHO, you'd have been better off going to a public college part-time to complete your degree and graduate with little to no debt.

Those student loans will haunt you and bite you in the butt, especially if you run into medical issues and start accumulating out of pocket expenses.