Author Topic: Back to University or Pay off student loans first?  (Read 2169 times)

evan1082

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Back to University or Pay off student loans first?
« on: May 09, 2016, 06:39:10 PM »
Hi Everyone

I am currently 21 years old and live in Alberta, Canada. I just graduated in 2015 and hold a diploma in Power Engineering (Also known as a stationary or steam engineer) a long with 25k in student loans. I had originally wanted to go to university to get an engineering degree after high school, but got sucked into the idea that I could make massive amounts of money working in the oil and gas industry with only 2 years of technical training. The job prospects were huge for power engineers and everyone was and is still trying to jump in on the opportunity. Now the market is flooded with power engineers a long with a limited number of jobs in Alberta's hurting economy.

After about 6 months of searching, I finally found a some what relevant job with my limited experience and college education: a terminal operator position making about 60k/year.

My way of thinking has changed a lot in the past few years. I am starting to figure out what I value in life and am regretting the decision to take the path that I did. I dont want to be stuck in this limited career for the rest of my working life, so I applied to the university of alberta and got accepted for this coming fall. My government student loans are interest free while attending school so they wouldn't be accumulating if I left them there. I already have about $5000 saved up and expect to have around $9000 before September. I might be able to work on weekends at my current job and during the coming summer(s), so I could possibly have a source of income while I am in school.

Is it possible to live on such a small amount of money if I don't take out any more loans while in school? Or Should I continue working at my current job until I have payed off my student loans and saved up a good stash before I go to university?

Dee18

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Re: Back to University or Pay off student loans first?
« Reply #1 on: May 10, 2016, 06:04:50 AM »
You don't mention what you plan to study. Do you have a plan? $  60,000 sounds like a good starting salary and at the rate you are saving you could pay off your loans quickly.  Why not work at least a year and pay them off?

nereo

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Re: Back to University or Pay off student loans first?
« Reply #2 on: May 10, 2016, 06:23:02 AM »
Your student loans will go into deferment and you will be charged 0% interest, so your decision about graduate school should be independent of your loans.  If anything, inflation will slowly eat away at them while you are in school.

The real question you are asking is whether you should go to graduate school and whether you can live on ~$9k while you are there. 
Regarding whether to go to grad-school - will the opportunities be significantly better for you after you graduate?  You currently have a $60k/year job ... how much better of a job will oyu likely get?  Don't forget to factor in the cost of a few years of your life (and earnings).
REgarding whether you can live off $9k in savings... I'd be very skeptical.  IT certainly can be done, but it depends a LOT on what your housing situation is.  If your housing is <$400/month you might be able to swing it.  Regardless, I'd keep working parttime/weekeneds if at all possible; staying in the workforce (even if in a very limmited capacity) has huge advantages when getting a job afterward.

evan1082

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Re: Back to University or Pay off student loans first?
« Reply #3 on: May 10, 2016, 03:49:29 PM »
Thanks for input !

It's not so much the starting salary that I'm having issues with, it's more the specialized nature of the job and what it will eventually lead into. I'm very limited in that I'll basically be working shift work for the majority of my career and stuck in rural alberta; Something that I'm not to keen on.

My plan is to get my mechanical engineering degree. This would require me to basically start over in an undergrad program for another 5 years ( 1 year internship + 4 years schooling). Getting my Mechanical engineering degree will open up a whole new range of opportunities beyond what I'd be able to do with my current diploma. The only thing that is holding me back is my student loans and my limited savings. I could wait a year, but I'm not sure the university will let me defer my acceptance for the following year. Or if I'll be able to apply again for the same program if I decline the offer for this fall.

Like I was saying in my original post, I might be able to work weekends at my current job while in school and bring in maybe 1000 $ a month which would help significantly. But I havent brought it up to my company yet so I'm not sure what they will say.

 

Wow, a phone plan for fifteen bucks!