Financial strategies for going back to school

[kathryn1029]

Hi all,

I am 26 and am currently living in NYC making $62,500. I will quit my job in December to go back to school (nursing)- not sure what city yet but definitely lower COL than NYC. Eventually will get a masters and become an NP.

Are there any financial steps I need to take now that I'm missing? Here is my situation:

$3,000 emergency fund
$2,500 in various Schwab index funds
$4,000 in low interest savings (earmarked for down payment in a couple of years)
$19,000 in 401k (I currently contribute only 8%)
No current debt, although I'll be taking out student loans to total about $80,000 (including both RN and NP program).

My SO will come with me, we'll be getting married in the next few years. He brings about the same amount of assets as I, and he'll be looking for a new job in the new city. My hope is that we can both retire at 48ish.

Anything I need to do now to get the most out of my income before I stop having one? I am saving as much as possible right now, contributing $100 per month to the index funds, and $800-$1000 per month to my downpayment/short term savings account.

[Fletch]

I'm in a similar position, so mostly I'm just commenting to see what other people say. I have a few thoughts/questions that I would have a plan for:
Have you been accepted to a program yet? How far away will you move for this? Are you moving all your stuff, or selling and buying used when you get there? Will it be a more car-dominant city than NYC (I seem to recall most nurses have a year of going back and forth from hospital residency stuff to classes, at my school the hospital was across town)?

Why December, don't most programs start in September?

[MrCash]

How long will your RN and NP program take to complete?  Will your SO be supporting you during this time? 

I feel like you don't have an adequate safety margin.  What happens if your SO can't find a job (or it takes a while) when you move to the new city?  And what if something happens and your SO isn't there to support you?

From what I can tell you are saving about $13,000 a year.  With a take home of $47,000 (assuming an income tax rate around 25%) that means you are living on about $34,000 a year.  Since you are planning to go back to school in about 8 months, that means you will have saved up about $16,000 ($3000 + $4000 + $1,100 x8 = $15,800).  This amount of savings will only sustain you for about half a year at your current living expenses.

And of course these numbers depend highly on where you end up.  Increasing your savings rate would help your safety margin immensely.  It would also be good to know what your SO has saved up and the total of his living expenses.

No current debt, although I'll be taking out student loans to total about $80,000 (including both RN and NP program).

Ouch.  Is there any way you can get through this program without these student loans?  I'm afraid that this will come back to bite you later.  You should apply to every scholarship possible and consider working part-time if possible while you are in school.

[Blazin]

Just wanted to say there are some programs that let you complete both the RN portion and NP portion concurrently if you already have a degree. They are generally called Direct Entry programs and can shave time off of completing the degree and also allow you to work as an RN before graduating with your degree.

[clarkfan1979]

Try to go to school in a traditional college town. I say this because it's "cool" to be frugal in a college town and you will be more likely to succeed in taking out less debt. If you go to school in a major city with most of your peers working, it will be difficult to find like minded friends. College towns are all about finding the best deals on everything because most people have limited funds.

[MrCash]

Try to go to school in a traditional college town. I say this because it's "cool" to be frugal in a college town and you will be more likely to succeed in taking out less debt. If you go to school in a major city with most of your peers working, it will be difficult to find like minded friends. College towns are all about finding the best deals on everything because most people have limited funds.

Also, small college towns are more likely to have all the necessities within walking or biking distance.

[windawake]

I went back to grad school at 23. After undergrad I worked for a year and 9 months. Even on $31k gross salary, I was able to save about $11k or $12k during that time. I went back for a two year degree in public health. At the school I chose (University of MN, very highly ranked MPH program), you could work in an assistantship and a percentage of your tuition would be covered (in my case 75%) and you'd be salaried (equivalent to $17.80/hour for 20 hours/week). These positions were obviously in high demand, but with a combination of tenacity and good luck I was able to find an assistantship for each semester. I ended up $5,500 in debt to my parents at the end of it all. I'm pretty proud of how it worked out. It would've been even more awesome to make it all the way through with no debt but I wasn't able to get tuition benefits for my last 6 credits.

I'm now making $53k/year and happy with it. I wouldn't be nearly as happy if I was in debt. I think of my time in graduate school as somewhat frivolous. Working only part-time, doing interesting school work, and making and spending time with lots of friends. It was worthwhile because my income increased so drastically, but would not have been worth it if I'd come out with the $60k in debt I could have had if I hadn't found those assistantships.

My advice is to try all avenues possible for someone else to pay for your schooling, at least in part. Otherwise I'd advise to save as much as possible for school and living expenses, even at the expense of other goals like a down payment, and cut back where you can.

[kathryn1029]

Thank you, everyone! I know my financial situation seems a bit shaky with the decision to go back to school. To answer a few questions:

I did apply for the joint RN/NP programs, and didn't get in to the few I targeted. However, I feel like this could be a plus financially because once I start work as an RN (between the programs) it's possible that my employer would pay for the NP program, although I'm not at all counting on that, of course.

I haven't been accepted to a program yet and therefore don't know which city we might end up in. However, I am targeting programs in cities similar to what many of you describe-- smaller, college towns, low cost of living. I would attempt to not get a car and would take public transport. For when I needed to get to clinicals in random places, my SO would take public transport.

We will probably move our stuff, because SO has a car, so we'll drive to new city. Many of the programs start in January, I'm targeting those first so I don't have to wait until next September (I missed the deadlines for this upcoming September already).

Yes, my SO will support me. He is obviously wonderful for doing this.

With regards to how many months current savings would get us through... our cost of living will be drastically lower. We currently live separately in the highest COL city ever, and would be living together in a lower COL city on a tiny, tiny budget. If he doesn't get a job? Well, honestly, I'm an optimistic person, but we're also lukcy that one or both of our parents would probably help support us. If something happens to him, god forbid, I guess I would have to drop out of the program.

I know student debt sucks. However, my salary will be significantly higher and I will pay that debt aggressively, out of the way in 4 years. Obviously I will apply for every/all scholarships and grants, and would work in public sector if that would forgive some of my debt (though it seems that policy is in the midst of changing)

Anyways, your responses have really motivated me to start saving even more money right now. I already don't go out to eat and try to be frugal with groceries ($160 a month for every breakfast, lunch, dinner), don't buy clothing of course. Living in NYC is just expensive! But I am going to try even harder to save more money!

[MrCash]

Thank you, everyone! I know my financial situation seems a bit shaky with the decision to go back to school. To answer a few questions:

I did apply for the joint RN/NP programs, and didn't get in to the few I targeted. However, I feel like this could be a plus financially because once I start work as an RN (between the programs) it's possible that my employer would pay for the NP program, although I'm not at all counting on that, of course.

I haven't been accepted to a program yet and therefore don't know which city we might end up in. However, I am targeting programs in cities similar to what many of you describe-- smaller, college towns, low cost of living. I would attempt to not get a car and would take public transport. For when I needed to get to clinicals in random places, my SO would take public transport.

We will probably move our stuff, because SO has a car, so we'll drive to new city. Many of the programs start in January, I'm targeting those first so I don't have to wait until next September (I missed the deadlines for this upcoming September already).

Yes, my SO will support me. He is obviously wonderful for doing this.

With regards to how many months current savings would get us through... our cost of living will be drastically lower. We currently live separately in the highest COL city ever, and would be living together in a lower COL city on a tiny, tiny budget. If he doesn't get a job? Well, honestly, I'm an optimistic person, but we're also lukcy that one or both of our parents would probably help support us. If something happens to him, god forbid, I guess I would have to drop out of the program.

I know student debt sucks. However, my salary will be significantly higher and I will pay that debt aggressively, out of the way in 4 years. Obviously I will apply for every/all scholarships and grants, and would work in public sector if that would forgive some of my debt (though it seems that policy is in the midst of changing)

Anyways, your responses have really motivated me to start saving even more money right now. I already don't go out to eat and try to be frugal with groceries ($160 a month for every breakfast, lunch, dinner), don't buy clothing of course. Living in NYC is just expensive! But I am going to try even harder to save more money!

It looks like you have most everything figured out!  And your current high salary will be very helpful when saving for the move! 

[phred]

Have you contacted the Dept. of Health & Human Services for an NP educational grant?  How about the American Nurse Practitoner Foundation for a training grant?