I’m in College! I need your help!

[GabeMattick]

Hey guys!
I’m a new college student in my second semester. I currently attend a small Catholic liberal arts college. I need some help with the finances. Here they are:
Tuition per semester is about $20k. 40k a year or so. I currently have an on campus job and work about 10 hours a week earning just above minimum wage. I am located kinda in the middle of nowhere and do not have a car. I also will work a job full time this summer that will pay about $13/hr. I am extremely afraid of debt. I am hoping to get advice from you in regards to how I can prepare to pay off this debt. Do I need to start making more money? Focus on my school more for a high paying job? Invest? I don’t know what to do! After college, with a lot of help from my parents, I will most likely have $60k in loans. If you have any tips please let me know! Thanks guys!

[TexasRunner]

Will this degree actually get you a job later, and how much can you expect that job to pay?
Is this degree in something you will actually enjoy?

Answer those two before getting to the brunt of your questions, because those two define (basically everything) about whether this debt is a good decision.

[Raenia]

What degree are you planning on getting, and what kind of job do you expect to get after graduating?  The general rule of thumb I've heard is not to take on more debt than your annual salary out of school.

Debt is not inherently bad or good, it depends on how you use it.  If you strategically use debt to get yourself higher earning potential, then it can be worth the cost.  It's great that you have an on-campus job, and living without a car will help you keep expenses down.  Take the least amount of loans you need to, not using the loan to pay for entertainment, travel, etc (it sounds obvious, but many people do!)  Working during the school year is great, but don't overload yourself - make sure you have enough energy and focus to do well in your classes.  If you're not succeeding at school, then what was the point of taking loans to attend in the first place, right?

[mm1970]

Will this degree actually get you a job later, and how much can you expect that job to pay?
Is this degree in something you will actually enjoy?

Answer those two before getting to the brunt of your questions, because those two define (basically everything) about whether this debt is a good decision.

Yes this.  A quick "cheater" way to figure this out:
1. For your chosen major, what do most people end up doing?
2. For your chosen major at your university, what is the average starting salary? (Ask the school, or Google).
3. For your chosen major at your university, what percentage of graduates find immediate employment?  (Ask the school, or Google).
4.  Take the $ in #3 and multiply it by the % employed in #4.

The result is #4 is the amount you can *reasonably* expect to make out of college in your first job.
You should not borrow more than 1x that amount.  (In higher paying jobs, you might be able to eke out 1.5x or 2x).

Because you won't be able to pay it off.


A longer, more educational, and harder way to figure it out.  Makes you do the math yourself.
1.  Go to this website:
https://www.bankrate.com/calculators/college-planning/loan-calculator.aspx

Fill in your numbers - amount you expect to borrow, the interest rate, and length of loan.
It will tell you your monthly payment.

Your loan payments should not be more than 10-20% of your gross income.
For a $60,000 debt, a monthly payment would be $630, or thereabouts, depending on interest rates.
That would be equivalent to $50,000 a year income.

[Tass]

I saved $10,000 per year in school by becoming a Resident Assistant. You only mentioned tuition - are you also living on campus and paying room and board? If yes, find out what the RA requirements are. Do this now, because the hiring window may already be closing. It's good experience, and you can do it in addition to part-time campus work.

(Alternatively, if you can live at home, that can save at least as much - though I personally think learning to live away from your parents is a valuable part of the college experience.)

Other than that, make sure you are applying for every scholarship that is available to you. Even the little ones. I got $500 every year by writing an essay for the hospital where my mom worked. I got a little more auditioning for a small music scholarship. I got a memorial scholarship because my essay reminded the parents of their daughter who passed away.

If you are any kind of underrepresented student - first gen college student, person of color, raised in a very rural area, woman in STEM, unique disability - search around and see if you can find scholarships specific to you. Do the same thing for scholarships specific to your field. Look on your school's website to see if they have a page of scholarships. Consider it one of your part-time jobs to apply for every scholarship you are eligible for - and apply seriously. Get your resume reviewed by your school's career office, and have someone you trust (or a school writing center) read your essays.

All that said... you are in school for a reason. I think it's great training to balance school and work, but if your schoolwork is suffering, prioritize it. The worst outcome is that you drop out of school with debt because you spent all your time working for minimum wage. Find a balance.

[kelvin]

I wholeheartedly agree with the 'what job will this get you'  advice above. Some other things to consider:

1. Summer jobs. You'll want something physical labour, preferably a camp job, something that people do for a living straight out of school. I'm in Canada, a lot of my friends worked the oil rigs, or planted trees up north. It's a big mindset shift for a liberal arts major, but it's worth it to graduate debt free.

2. If you're not doing number 1, it's because you're taking extra classes during the summer to graduate sooner, or you've landed a student job in your chosen career path. Preferably both.

3. Look into trades/college diplomas as a stopgap. The goal is to find something cheap to acquire that will pay the bills. A red seal welder's cert costs 2 months and $15k in my area, with a starting salary of $50k / yrs and OT that easily pushes it to $80k / yr right out of the gate. It isn't glamorous work, but it's a quick and cheap way to financial seperation from your parents. You can always go back to school later.

Personally, I dropped out of my bachelor's program due to health issues, went back for a college diploma, and ended up with the same job the bachelor's would have gotten me. I work in IT.

Ignore any advice from your parents. It's 30 years out of date, and heavily biased towards their hopes and dreams for you. Reality is very different, and they won't like it.

[Engineer93]

Transfer to a cheaper college. There are only a handful of schools worth 40k a year for undergrad

[SwordGuy]

Transfer to a cheaper college. There are only a handful of schools worth 40k a year for undergrad

Damn skippy!

And even fewer students worth paying that much to be in those few schools, either.   If you aren't one of the <1% of students, you probably have zero business paying that much for an education.

[pbkmaine]

Why are you at this school and not a state school, or better yet, a community college for two years and then a state school?

[draco44]

A few suggestions:
1. While it's important to be mindful of your expenses while in college, and the fact that you are posting on this board and have a job are huge signs of that, don't stress out so much about money or work so many hours that you get low grades or don't graduate. The people who get burned the worst by student loans, as much as they suck for everyone, are the students who invest time and tuition money but never get a degree to show for it.

2. I second Tass on the advice to apply for scholarships. People mostly think of them as something you get when entering college, but that is a throne of lies. Alumni organizations usually have a ton of small to large scholarships for current students, as do honors college programs and certain majors. Outside organizations have money too: churches, veterans organizations if you have parents who've served, professional development organizations for various demographic groups, Rotary clubs, etc.

3. Your mileage may vary, but never before or since have I seen such an abundance of free food as I did in my college years. Hunting for free food can be a great money-saving and social hobby in college, and a great way to learn about other cultures. At my school there was an Asian cultural center that had monthly cooking demos, and a Jewish and Latino community centers that offered free cooking classes, lectures upon lectures accompanied by free pizza, an International student hall that did near weekly programing featuring different countries (and their snacks), and lots of special one-off events (club recruitment days! LGBT solidarity day! Chinese New Year! Pre-finals student appreciation day!) during which free food was on offer. At a smaller school like yours there may be less on offer, but I bet there's still some freebies to be found. And every moment you are having fun for free is a moment you aren't spending money to have fun.

[Slow2FIRE]

As others have said -> get yourself to a more affordable school.  Even full tuition, books, fees, room, food, and healthcare at most Public state universities has a combined cost of less than $25,000 per year BEFORE financial aid.

The only way I would consider $40K/year tuition ever worth it is if you had a realistic (greater than 80% chance) of getting a job fresh out of college that pays six figures or has a well known, guaranteed path to six figure salary within 2-3 years of starting the job.  So, do an inordinate number of graduates from this school get hired by Google, Boston Consulting group, PriceWaterhouse Cooper, or similar "elite" work places along with you have a realistic chance of landing one of these elite jobs?

Private universities that aren't named Harvard, Oxford, Yale, etc have very low ROI...

[soccerluvof4]

We have 2 currently in college and didnt know there was a Catholic Liberal Arts schools that existed for 40k so I am assuming that as you stated thats tuition only which means your paying closer to 60k a year. Even if you are getting scholarship money to reduce to that amount thats insane for a 4 year school.  Was this more your choice or your parents to help you? As everyone has said go to a 4 year school that one will offer you the opportunity to a career that is going to allow you to not go in debt more than what you would make your first year out of college and I am not the biggest fan of that either.  And do you plan on going to graduate school? becoz if so then it just adds to both more debt and more of a reason to go as inexpensive as possible your first four years.

[OtherJen]

Why are you at this school and not a state school, or better yet, a community college for two years and then a state school?

See “Catholic” liberal arts college. I had several friends in high school whose extremely conservative Catholic parents would only allow them to attend a very specific conservative Catholic liberal arts college. The OP may very well lose any support he’s currently getting from parents if he transfers.

OP, I agree with other posters that you need to do everything possible to ensure that your future career is worth the loans. One of my friends who attended probably the same school earned bachelor’s and master’s degrees in finance and has done pretty well for herself. She was one of several kids so loans were a given, and then she lived with roommates for a few years after graduating to save money.

[CheapScholar]

If you really love the college you’re at then work full time over the summer, work part time during the year, and do as suggested above and apply to be an RA your last two years.

I attended catholic universities and now work at one.  Yes, the costs are often higher but we also usually offer things like smaller class sizes, safer campuses, better food, etc.  I don’t know your parents’ reasoning to send you to this school but I wouldn’t be surprised if part of it is spiritual formation and possibly greater chances of meeting a potential spouse that is also catholic and comes from a good family.  Many people on this board might not see “value” in that, but I personally see a lot of value in it.

All that said, if YOU love the school then work hard and finish your next three years.  If you don’t love the school then find the right public university for you in your home state and tell your parents why you need to make the change.  Be an adult and tell them in an articulate and thoughtful way, and make clear that you respect their faith and appreciate all they’ve done for you.  Don’t have this conversation over the phone or in text messages.  Hopefully they will still contribute financially but it’s their right not to.

[Tass]

I went to a school that cost over $50k a year, and while I wouldn't make the same decision again, being told to transfer while I was in the middle of it would have been overwhelming. If that's something you're willing to consider, OP, that's great, but if you aren't going to do that, don't throw the baby out with the bathwater and do consider the other strategies discussed here. My partner attended that school at that price, landed a 6-figure job, and paid off his debt in 3 years. Your school's price is bad news, but it's not life-ending news.

And do you plan on going to graduate school? becoz if so then it just adds to both more debt and more of a reason to go as inexpensive as possible your first four years.

Depends on your grad program. STEM research programs waive tuition and pay stipends. Small stipends, which I suppose is more of a reason to minimize debt, but still.

If you really love the college you’re at then work full time over the summer, work part time during the year, and do as suggested above and apply to be an RA your last two years.

I was an RA for 3 years. Some schools let you do it as a sophomore.

[secondcor521]

Lots of good suggestions so far.  I'd also check into financial aid.  Most US universities have a financial aid office.  Walk in there, tell them your situation, and ask them what kind of aid is available.

The best sources of college funding for my three kids so far - other than what I saved for them - have been scholarships and financial aid from the schools themselves.

[FINate]

Lots of good advice w.r.t. estimating what you can expect to make with your degree. Agree with others that tuition seems high.

A thought experiment: Tuition is $40k/year, guessing living expenses are another $20k. Over 4 years that's $240k spent with ~$60k financed with debt. If you and your parents invested $180k instead of paying for college then at 10% compounding growth you'd have over $600k in just under 13 years, which by MMM standards is FI. And this assumes you don't save/invest anything else along the way. Not saying you should do this, just putting it into perspective.

Now, I loved college and have even set aside substantial savings for my kids. But I am increasingly questioning the high cost for anything other than a degree with a reasonable expectation of landing a high paying career. If the goal of college is to get a credential, then the credential better have a good ROI. Otherwise, Community College and the public library are more cost effective ways of obtaining an education. I'll most likely encourage my kids to live at home while attending CC then state university for undergrad, reserving most of the savings for grad school.

[the_fixer]

1. Look at a state college in your state of residence it will cut your cost significantly. My wife considered going to a private Christian college that her parents were willing to pay half of the cost it was still more that attending one of the top state colleges in our area. She does not regret it and is actually glad she did it as it made her a more rounded person as she had the chance to spend time with people of different Faith's, backgrounds and cultures.

2. Make sure your degree is going to provide you with an acceptable ROI. For example my wife wanted to be a chemist but looking at the career path and what she would make decided to become a chemical engineer instead and is super happy with that decision.

3. Think outside of the box when it comes to jobs, you can likely make 2 to 3x as much money baby sitting, tutoring, cleaning a few houses or picking dog poop from someones yard than what you are planning on doing currently.





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[Villanelle]

In addition to the other suggestions and considerations, spend some time looking for scholarships.  Lots and lots of time.  And apply for anything even remotely relevant.  Even at $100 and $250 a time, they can add up, and there are lots of scholarships out there that go unclaimed. 


Beyond that, I agree with what others have said about considering a cheaper school and making sure your degree is in something that will actually give you a return on your investment. 

[ltt]

I will be as upfront with you as I can.

We have a son in a private college in what would be considered the middle of nowhere.  He's in his junior year.

Here are my suggestions:

1.  Do not take on that much debt!  When our son wanted to go to the private college we are sending him to, we gave him our blessing, and then I told my husband--sheesh, I wonder how we are going to pay for it.  We have managed, and we have two in college, but I won't say it's necessarily been easy.

2.  See what scholarships you can get through the school.  That is the only way our son is going to private college.  It has basically taken the $40k year tuition, room, and board down to $20k.  What is your status on scholarships? 

3.  Understand that it's going to be difficult to get an RA position being you are in your first, going into your second year of college.  I do believe it pays for room and board, though? 

4.  Our son has had some difficulty in finding a decent internship that pays, and he has a STEM major.  That, and I don't believe he's looking that hard.  During his senior year of high school, he/we looked at two colleges--one of those colleges had a 94% placement rate for the major he is in, which I thought was great!  That is not the college he is attending.

This is how we have managed keeping college debt low:

1.  He had to chip in summer earnings during his senior year of high school.  Some summers he made next to nothing.  We really didn't have him chip in then because he needed some money to live.

2.  He has a nice scholarship from an organization, in addition to university scholarship, which has helped tremendously and is renewable while in college.

3.  We didn't have much saved when he graduated high school.  About $24,000 total.  We split that money over 4 years, so we used/are using around $6,000 per year toward education.  However, that money has grown in a mutual fund, but we have been spending it down. 

4.  Every two weeks when my husband gets paid, I put aside $250 (so basically $500 per month) toward his education. 

5.  Portions of tax refunds go toward education.

6.  Part of husband's bonus go toward education.

7.  He will have a little over $6,000 or so in student loan debt when he graduates--we did have him take out one loan his freshman year, that was the $5,500 federal student loan, as we didn't know exactly how everything was going to flow.  Once we had a system in place as to how we would pay for it, then starting his sophomore year, we said no more debt.

8.  Your parents are going to have to help you more in order to keep your debt level down.  That's just how it is.  If they are not able or cannot, then I suggest going to a state school.  You will get just as good of an education. 

9.  Our son does work part-time, but doesn't make much.  He uses that money for living expenses.