Topic: Breaking down loans.
In the book Debt-Free U, the author, Zac Bissonnette breaks down going to college without having to take a loan. He has some great ideas like taking all the pre-requisite classes at a community college and applying for work-study. However, there are some difficult (for me) options -- Like working 30 hours a week.
Confession: I was never the top student in my class and I need to spend hours reading, taking notes, making outlines, occasionally making note cards, reading again, getting high-lighter happy... Well, you get the drift. Although, I would like to work 30 hours a week and attend TCM school (which involves learning a whole new and esoteric way of thinking about the human body) FT seems not unrealistic just difficult.
However, I want to take the least amount of loan as possible. I have talked to many grad students who have taken the maximum amount of loans as possible without considering the idea of living below their means. This scares the crap out of me particularly since the salary straight out of school is pretty low. I want to make sure I balance my life (scroll to the bottom of this post) but I also know I will have to cut down on many luxuries (So long, cappuccinos and mani/pedis!)Gradloans.com does a fantastic job breaking down loans and definitely worth looking.
Currently, I am looking into the following loans:
- Stafford Loans (Subsidized and Unsubsidized)
- Work-Study
- GradPlus Loan
Subsidized Stafford Loan is the one I'm very interested in:
PROS
- Awarded based on financial need
- Interest is charged AFTER school
- Fixed rate - as of 2011-- 6.8%
CONS
- Out of the maximum $20,500/year -- No more than $8,500 can be taken out as Subsidized
I will also probably take out the Unsubsidized Stafford:
PROS
- Not awarded based on financial need (ANYONE is eligible)
- More cash than Subsidized
- Fixed rate - As of 2011 -- 6.8%
CONS
- Interest begins right when you receive the loan until it is fully repaid
I will definitely be applying for Work-Study:
PROS
- Money
- Opportunity to become familiar with the school and its system
- Opportunity to meet the professors, staff and students
- Opportunity to understand the various systems whether it's working at the herb clinic, admission office or library
CONS
- Hours
- Hours are flexible
- Pay
- The pay varies depending on each school
I've met a few students who have chosen to also take out the GradPlus Loan which personally, I think is a mistake. The way I'm viewing the GradPlus Loan is as EMERGENCY CASH. It is a credit-based loan and only takes a couple of days to get the money -- Therefore, if there is any emergency (dentist, hospital, etc.) then the loan can be applied and received immediately. There are some benefits:
- Fixed interest rate - as of 2011 -- 7.9%
- Deferred payment option while in school
- Interest is tax deductible for most grad students
I also have a semi-hefty savings account which I plan on depleting my throughout the 3-4 years of grad school. In addition to just the tuition, books, etc. I also have to consider the following:
- Moving expense
- Am considering renting a small U-haul rather than buying everything new -- Though, I have to make an IKEA stop to weigh out the price option
- Rent and Utilities
- Took 1 major trip to Portland scoping out the different hoods
- Checking Craigslist religiously to get an idea of rent & apartment complexes
- Food
- I tend to cook most of the time but I also want to explore
- Fun Stuff While in School
- This is MAJOR considering grad school is going to be intense. I think it's crucial to have some money set aside to go to a museum, watch a movie, just chill out.
- VACAY!
- Mr. Zac Bissonnette would probably be against this last spending option but I def plan on taking a vacation holiday at least once a year -- Preferably somewhere with blinding sun. As TCM students, it's all about balance and we need to remember to incorporate that into our own lives.
CALCULATORS Helpful financial calculators here to get an estimate on how much loan you'll need, how much to save, how much to spend, etc.
