Study Abroad: A car I've been approved for but can't afford?

[chacunsatasse]

Hello everyone,

I would love and appreciate any insight you would be willing to impart regarding a dilemma I am currently facing. (Skip to bottom for summarized questions if you'd like)

I've recently been offered the fantastic opportunity to study abroad, and earn a dual graduate in the process. Unfortunately, this will add in the neighborhood of around $22k to my already existing $23k in student loans I have accumulated. I should note, that I do not plan to have a steady job after graduation, but instead, plan to travel the world, stopping in Latin America for around a year to perfect my Spanish. I can make such a lifestyle work with the monthly payments on a 23k loan (around $250 a month) but a 45k+ loan would make a lifestyle nearly impossible, barring falling into some money, or writing a book, neither of which I plan on doing soon.

So in sum, post graduation, I am looking at 2 years of trying to eek by on my loan's minimum payment so I can achieve some personal travel and language learning dreams of mine. After 2 years I'm probably looking at an entry level legal job ($45k) or so, which with my frugal disposition will allow me to knock out what's left of that $23k loan at that point in 2-3 years. (FYI: I plan on keeping a standard repayment plan which for those of you unfamiliar, is a 10 year plan- oh, and let's assume I don't want to refinance it under one of the income based repayment options. Unless you can convince me otherwise, that seems like a good way to be paying for letting my interest balloon my loan while I'd be traveling and making the minimum payments, and as a result paying the damn loan for 20+ years...).

Returning to the opportunity...

When I was first offered the study abroad opportunity, the adventuresome side of me said "Oh fuck yeah. Why not? You only live once eh?" (I should note I've already lived in this country for 2 years + before coming to grad school, I speak the language and am familiar with the city where the school is located)... However after crunching some numbers, I am realizing that this may be a big mistake given my immediate goals after graduation.

Last night, I started thinking of the opportunity as a new car I've been approved for, but cannot actually afford. Do you find that to be an apt analogy? I've been a mustachian long before I knew what mustachianism was... meaning I've been frugal, done things fo myself, haven't followed what everyone says I ought to be doing (3 years living abroad (Africa (far easier) and Western Europe (far more difficult)) on between $900 and $1200 a month, while everyone else I knew was working entry level jobs and starting families, was character building, to say the least, and has taught me to live as such)...

To illustrate what I am getting at here: I would let out a thunderous and contemptuous laugh if someone tried to sell me a $22k automobile."But you're approved," they'd say! "Needn't but sign on the dotted line, sire" They'd say...

But then, I don't get turned on for things like that, so that's not really challenging to say no to; as I presume it wouldn't be for most of you on this forum, either...

However, the traveling/ soak up the experiences while we can/ we-are-but-a-blip-of-consciousness-sandwiched-between-eternal-and-infinite-darkness side of me that has long appreciated life experience is much more easily tempted... "But all I have to do is take out the loan! Most people in my cohort are already graduating with 50x the debt I'll have! 45k isn't that much... etc., etc...." 

I guess what I am getting at is:

Is this study abroad opportunity the millennial version of a fancy new car (insert whatever ultimately meaningless material acquisition that people pursue because they think it will make them happy here) ?

Is this just another thing I think in which I think I will find some personal fulfillment, which is actually a Trojan horse for debt, that will perversely rob me of meaning in the long run? Am I over thinking this? What are your thoughts on:

a) what I should do
b) the modern repackaging of 'experiences' to substitute for the more conventional markers of "making it" of generations past, that were largely materially based?

Thanks for your mustachian gusto and brain power on this. Keep doing what you're doing, y'all. Best.
CST

[Watchmaker]

What would you gain from the study abroad program? Opportunities for higher paying or more rewarding jobs? Or just an extended vacation in country X? If it's more like the latter, than I'd say it sounds like a bad idea. You're just getting started in life, best not start a habit of going into debt because you don't want to delay gratification.

I think a focus on experiences over possessions is good, but experiences aren't just things you pick out of a brochure and go into debt for. What about finishing school and getting a job in country X (or country Z since you've already lived in country X) so someone is paying you to live there?

[chacunsatasse]

Hey Watchmaker!

You're spot on. It would largely be an excuse to live in country X for a year, with the added benefit of the professional qualification (a masters degree in country X), contacts, and professional and life experience that would come with doing a graduate degree there. (again, I've lived in country X for 2 years previously, and was being paid to do so).

I will say though, that typically the consideration for "higher paying or more rewarding jobs" has traditionally been of secondary importance in my analysis. Have you ever done something you don't want to do just because it will look good on your resume? It's not fun, and not a very good habit to start, either. Thank you for your thoughts :)

Best.

edited for clarity and grammar

[Watchmaker]

You're spot on. It would largely be an excuse to live in country X for a year, with the added benefit of the professional qualification (a masters degree in country X), contacts, and professional and life experience that would come with doing a graduate degree there. (again, I've lived in country X for 2 years previously, and was being paid to do so).

I will say though, that typically the consideration for "higher paying or more rewarding jobs" has traditionally been of secondary importance in my analysis. Have you ever done something you don't want to do just because it will look good on your resume? It's not fun, and not a very good habit to start, either. Thank you for your thoughts :)

I did not suggest you should do something you don't want to do just because it would lead to a better job. I suggested you shouldn't take on debt to obtain a degree if it wouldn't have economic value to you.

[chacunsatasse]

Right, I was referring more to your question, "what would you gain...opportunities for higher paying or more rewarding jobs?"... I was just trying to say that this is not normally my primary consideration when making these decisions. (admittedly, this isn't always practical, which is why I turned to this forum for advice :)) I didn't mean to come across as being contrarian. Thanks for your advice!

[Metalcat]

Right, I was referring more to your question, "what would you gain...opportunities for higher paying or more rewarding jobs?"... I was just trying to say that this is not normally my primary consideration when making these decisions. (admittedly, this isn't always practical, which is why I turned to this forum for advice :)) I didn't mean to come across as being contrarian. Thanks for your advice!

What then is your primary consideration in choosing what kind of education to invest in???

Personally, I wouldn't want to spend anything extra to go to school abroad. I lived in Montreal for 4 years for school and never had any time or money to be able to enjoy it.

Is the priority school or is it living abroad?
If the priority is school, then what's the goal of your education? Does this school abroad offer a better opportunity to meet that goal?

[Watchmaker]

Right, I was referring more to your question, "what would you gain...opportunities for higher paying or more rewarding jobs?"... I was just trying to say that this is not normally my primary consideration when making these decisions. (admittedly, this isn't always practical, which is why I turned to this forum for advice :)) I didn't mean to come across as being contrarian. Thanks for your advice!

No worries. You already lived in country X for two years-- while being paid to do so. Why would you now want to pay to live there if you don't actually need the degree you'd be earning?

"But all I have to do is take out the loan! Most people in my cohort are already graduating with 50x the debt I'll have! 45k isn't that much" 

I think you know this is hyperbole. People aren't graduating with $1MM in debt (50x yours), and most of the people graduating with 100k or more debt have gotten a potentially high paying career (doctor, lawyer) out of it. And even if many other people are graduating with more debt then you--their bad decision shouldn't give you an excuse to make your own bad decision.

[chacunsatasse]

Right, I was referring more to your question, "what would you gain...opportunities for higher paying or more rewarding jobs?"... I was just trying to say that this is not normally my primary consideration when making these decisions. (admittedly, this isn't always practical, which is why I turned to this forum for advice :)) I didn't mean to come across as being contrarian. Thanks for your advice!

What then is your primary consideration in choosing what kind of education to invest in???

Personally, I wouldn't want to spend anything extra to go to school abroad. I lived in Montreal for 4 years for school and never had any time or money to be able to enjoy it.

Is the priority school or is it living abroad?
If the priority is school, then what's the goal of your education? Does this school abroad offer a better opportunity to meet that goal?

Normally I consider if I think I'll enjoy it, and if it will be an opportunity to grow as a person, learn more about the world. The idea that it will lead to better employment is of course a consideration, I didn't mean to get us hung up on this aspect. I've always treated it as ancillary to what I find to be more important considerations, that is all.

What you said about living in Montreal, I too have experienced, and you're right... When we imagine living abroad in our mind's eye, we rarely do so imagining that we'll be broke, which makes for a totally different experience! :)

These are good questions you ask. I'm still grappling with them. But I think my priority was to live abroad, and experience life as a student there. I have lived and worked there, but never lived as a student. Part of me, as I said, says you only live once, and you you should take these experiences as they come to you.

[chacunsatasse]

Right, I was referring more to your question, "what would you gain...opportunities for higher paying or more rewarding jobs?"... I was just trying to say that this is not normally my primary consideration when making these decisions. (admittedly, this isn't always practical, which is why I turned to this forum for advice :)) I didn't mean to come across as being contrarian. Thanks for your advice!

No worries. You already lived in country X for two years-- while being paid to do so. Why would you now want to pay to live there if you don't actually need the degree you'd be earning?

"But all I have to do is take out the loan! Most people in my cohort are already graduating with 50x the debt I'll have! 45k isn't that much" 

I think you know this is hyperbole. People aren't graduating with $1MM in debt (50x yours), and most of the people graduating with 100k or more debt have gotten a potentially high paying career (doctor, lawyer) out of it. And even if many other people are graduating with more debt then you--their bad decision shouldn't give you an excuse to make your own bad decision.

Sorry, I don't know how to operate these quotes: To answer "why would I live there if I don't need the degree":

The short answer (this might not be a very good one, but this is what I am thinking) is that it would be a good experience. I would learn a lot, live in a city I've never lived in, get to speak the language again, meet new people, be exposed to ideas... etc. Again, I'm not as concerned with the "necessity" of the degree... It's more about whether the experience might not be worth doing just for the sake of the experience itself.

Of course this is hyperbole, and it was intended as such :) And my program is a professional program, so yes, the people I'm graduating with are graduating with 100k + in loans, and yes, I whole heartedly agree with you that this is not a good reason for making a bad decision of my own... But this kind of gives you some insight into the environment in which I am making this decision. Friends and administrators here have been desensitized to these large sums of debt, so when they see me fretting over $20k, they're like, "what are you worried about?"... Thanks again for your thoughts

[Eurotexan]

I lived abroad twice when I was in my 20s; 1 year in France and 5 in Germany. Best years of my life! I say do it, you are aware of the cost and potential future sacrifices, you will stay frugal but it's a wonderful opportunity that may not come again (especially if you marry, have kids etc). Some adventures are easier for the young!

[Laura33]

The short answer (this might not be a very good one, but this is what I am thinking) is that it would be a good experience. I would learn a lot, live in a city I've never lived in, get to speak the language again, meet new people, be exposed to ideas... etc. Again, I'm not as concerned with the "necessity" of the degree... It's more about whether the experience might not be worth doing just for the sake of the experience itself.

So, basically, you see this as the equivalent of paying someone to allow you to live abroad?  How is that any different than just moving somewhere and putting everything on a CC?  If the only reason to go to school would be as an excuse to live abroad, and you need to go into further debt to do so, then that's not a viable option. 

The reason to pay money to go to school is because doing so will provide you better opportunities down the road -- make you eligible for better jobs that you could not get with your current degree, allow you to compete for higher salaries, etc.  If you are not going to school for any of these reasons, then don't go to school.  Just go live where you want to live without paying someone for the excuse.

Tl;dr:  If you want to go to school for a better job opportunity, and it's worthwhile financially to take on the additional debt to do so, then go to school.  If you want to live abroad, then get a job and live abroad.  But don't conflate the two.

[Metalcat]

Right, I was referring more to your question, "what would you gain...opportunities for higher paying or more rewarding jobs?"... I was just trying to say that this is not normally my primary consideration when making these decisions. (admittedly, this isn't always practical, which is why I turned to this forum for advice :)) I didn't mean to come across as being contrarian. Thanks for your advice!

What then is your primary consideration in choosing what kind of education to invest in???

Personally, I wouldn't want to spend anything extra to go to school abroad. I lived in Montreal for 4 years for school and never had any time or money to be able to enjoy it.

Is the priority school or is it living abroad?
If the priority is school, then what's the goal of your education? Does this school abroad offer a better opportunity to meet that goal?

Normally I consider if I think I'll enjoy it, and if it will be an opportunity to grow as a person, learn more about the world. The idea that it will lead to better employment is of course a consideration, I didn't mean to get us hung up on this aspect. I've always treated it as ancillary to what I find to be more important considerations, that is all.

What you said about living in Montreal, I too have experienced, and you're right... When we imagine living abroad in our mind's eye, we rarely do so imagining that we'll be broke, which makes for a totally different experience! :)

These are good questions you ask. I'm still grappling with them. But I think my priority was to live abroad, and experience life as a student there. I have lived and worked there, but never lived as a student. Part of me, as I said, says you only live once, and you you should take these experiences as they come to you.

K.

It's all nice and good to do a school program because you would enjoy it, but that's not a basis for choosing to go into debt for school.

I love school, I would just stay in university forever and ever if I could, but that's not the way it works. It's a huge investment of money and lost wages to take on a degree. There must be some outcome that you are hoping to gain in the end.

By this, I don't even mean some specific career outcome, but I seriously doubt that you blithely thought "oh, that program looks shiny and fun! Let's choose to throw money at that with complete and total disregard for how it will affect my future"

So if that's not the case, then let's look objectively at what you do hope to get from the program. Then compare that outcome to other programs that may be less expensive.

Then compare the difference in cost to the difference of location and see if the location difference is as valuable as the cost difference.

And yes, if it's a professional program, you probably won't have much time or resources to really enjoy any city, to factor that in as well.

Lastly, if it's a professional program, factor in that if you only live there for school, you lose out on the entire professional network that you build during school. This is a HUGE thing to give up for most careers.

[wellactually]

It sounds like these are the options you're considering (correct me if I'm wrong, your OP was a little stream of consciousness):

A) Finish grad school with 23k in debt and then go spend a couple years traveling with about a year in Latin America before you settle into a legal-type job where you expect to make 45k. Pay standard repayment during these two years and then more aggressively focus on the loans after you're in the legal-type job.

B) Do another year of grad school as a study abroad to get a dual degree with 45k in debt at graduation. You're generally interested in education and it could provide some resume strength and networking in that country, but you still expect to go travel after completion for a couple years and aren't sure you could swing a standard repayment during that time with the higher loan payment.

I guess I don't really see the point of the extra grad school. If you were really really into the program itself or had a specific usage for the second degree, then go for it. But it seems to really put into jeopardy the next couple years of travelling. And it's a country you've lived in before, so not a completely new experience.

I'd definitely rather have less liability and more freedom. Your plan to travel already sounds great and fun if you can swing it. You don't seem interested in climbing the career ladder and the extra grad school doesn't seem to have a huge draw other than that it is easy to live off student loans for a year and have fun in that city. Having less leverage against you will give you more choices after graduation, which it seems like you value.

I'd only go with B if you really want to do the program, not just if it'd be fun. You've got other fun options that won't cost 22k. 

[Watchmaker]

I lived abroad twice when I was in my 20s; 1 year in France and 5 in Germany. Best years of my life! I say do it, you are aware of the cost and potential future sacrifices, you will stay frugal but it's a wonderful opportunity that may not come again (especially if you marry, have kids etc). Some adventures are easier for the young!

Live abroad, sure, if that's the goal. But they've demonstrated the capability of living abroad and making money, why instead pay to live abroad?

[chacunsatasse]

The short answer (this might not be a very good one, but this is what I am thinking) is that it would be a good experience. I would learn a lot, live in a city I've never lived in, get to speak the language again, meet new people, be exposed to ideas... etc. Again, I'm not as concerned with the "necessity" of the degree... It's more about whether the experience might not be worth doing just for the sake of the experience itself.

So, basically, you see this as the equivalent of paying someone to allow you to live abroad?  How is that any different than just moving somewhere and putting everything on a CC?  If the only reason to go to school would be as an excuse to live abroad, and you need to go into further debt to do so, then that's not a viable option. 

The reason to pay money to go to school is because doing so will provide you better opportunities down the road -- make you eligible for better jobs that you could not get with your current degree, allow you to compete for higher salaries, etc.  If you are not going to school for any of these reasons, then don't go to school.  Just go live where you want to live without paying someone for the excuse.

Tl;dr:  If you want to go to school for a better job opportunity, and it's worthwhile financially to take on the additional debt to do so, then go to school.  If you want to live abroad, then get a job and live abroad.  But don't conflate the two.

Hey, thanks for your post. I really like the way you've compared it to moving somewhere and putting everything on a credit card... when it's put into those terms, it does sound quite absurd.

I will say though, I don't wholly agree with your statement about whether or not one should be in school. But that's neither here nor there. Thanks again.

[chacunsatasse]

It sounds like these are the options you're considering (correct me if I'm wrong, your OP was a little stream of consciousness):

A) Finish grad school with 23k in debt and then go spend a couple years traveling with about a year in Latin America before you settle into a legal-type job where you expect to make 45k. Pay standard repayment during these two years and then more aggressively focus on the loans after you're in the legal-type job.

B) Do another year of grad school as a study abroad to get a dual degree with 45k in debt at graduation. You're generally interested in education and it could provide some resume strength and networking in that country, but you still expect to go travel after completion for a couple years and aren't sure you could swing a standard repayment during that time with the higher loan payment.

I guess I don't really see the point of the extra grad school. If you were really really into the program itself or had a specific usage for the second degree, then go for it. But it seems to really put into jeopardy the next couple years of travelling. And it's a country you've lived in before, so not a completely new experience.

I'd definitely rather have less liability and more freedom. Your plan to travel already sounds great and fun if you can swing it. You don't seem interested in climbing the career ladder and the extra grad school doesn't seem to have a huge draw other than that it is easy to live off student loans for a year and have fun in that city. Having less leverage against you will give you more choices after graduation, which it seems like you value.

I'd only go with B if you really want to do the program, not just if it'd be fun. You've got other fun options that won't cost 22k.

Hey, wow you've managed to sum this up much more succinctly than I was able to! I think you've nailed it. The extra debt does increase the risk that I won't take off and travel after graduation... I appreciate your time. Great analysis.

[chacunsatasse]

I lived abroad twice when I was in my 20s; 1 year in France and 5 in Germany. Best years of my life! I say do it, you are aware of the cost and potential future sacrifices, you will stay frugal but it's a wonderful opportunity that may not come again (especially if you marry, have kids etc). Some adventures are easier for the young!

Wow, 5 in Germany! That's a nice long stay :) Yes, part of me knows this is probably the last time I'd be able to live there, at least like this, and that's the part that says it's worth it to do it now, while the opportunity is present... I've been told it can be easier to make these memories when we're younger... once we're a little older, trying to create the memory you missed out on by bouncing off to another country for a year might be a lot more expensive (not necessarily talking $ here). Thanks for your post.