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    Should I get student loan?

    I just got accepted to Masters and it will be for 22 months (5 semester). 1 semester is around $2500. Itís not that expensive since its mostly online class.

    $2500 every 4-5 months is actually a lot. It will be really tough for me to pay all in cash. I know I could, but I also have CC debt to knock off. Should I get a student loan or pay it in cash?

    My wife just graduated from college and now looking for a job. My take home is $3800/month. After rent, bills, budget, IRA, etc we got around $1050 left.

    Debts
    CC $9,913. at 0% until Aug 2015. Planning to pay off this before the zero percent promo
    Auto Loan $8,539 at 5.5% Planning to pay off within 3 years

    Checking $5518
    Savings (Emergency Fund) $5,000

    Thanks in advance for advice.

    #2
    Originally posted by Leo View Post
    I just got accepted to Masters and it will be for 22 months (5 semester). 1 semester is around $2500. Itís not that expensive since its mostly online class.

    $2500 every 4-5 months is actually a lot. It will be really tough for me to pay all in cash. I know I could, but I also have CC debt to knock off. Should I get a student loan or pay it in cash?

    My wife just graduated from college and now looking for a job. My take home is $3800/month. After rent, bills, budget, IRA, etc we got around $1050 left.

    Debts
    CC $9,913. at 0% until Aug 2015. Planning to pay off this before the zero percent promo
    Auto Loan $8,539 at 5.5% Planning to pay off within 3 years

    Checking $5518
    Savings (Emergency Fund) $5,000

    Thanks in advance for advice.
    Is your CC/Auto Loan payment included in your budget? IE - do you really have less than 1050 left after you pay those two items?

    Comment


      #3
      Pay cash if you can. If you have to, delay school until you can save up more money.
      Brian

      Comment


        #4
        Originally posted by herdjohnson View Post
        Is your CC/Auto Loan payment included in your budget? IE - do you really have less than 1050 left after you pay those two items?
        Right now, I only pay minimum for CC since its 0%. Auto loan is included in bills/budget. So yes, $1050 left per month. The only two things not included is Entertainment and Shopping, but recently, we don't really spend that much in Entertainment and Shopping and if we do, we try to limit it to $350/month.

        Comment


          #5
          Originally posted by Leo View Post
          Thanks in advance for advice.

          Welcome to the forums!

          A. What kind of master's is the degree you will be pursuing? MBA?

          B. What do you plan to do with it?

          C. Will it mean an increase in your income at your current job or will you be switching to a different industry?
          ~ Eagle

          Comment


            #6
            Originally posted by Eagle View Post
            Welcome to the forums!

            A. What kind of master's is the degree you will be pursuing? MBA?

            B. What do you plan to do with it?

            C. Will it mean an increase in your income at your current job or will you be switching to a different industry?
            Hello. Thank you.

            A. I have a Bachelor of Science in Computer Science. It will be Master of Science in Software Engineering.

            B. My goal is to have a nice paying job. I think Masters will help a little bit. I figured 5 years experience (right now i have about 3) plus a Master in my industry can get me to 6 digits salary.

            C. Yes increasing income. Related to my answer B.

            Comment


              #7
              I'm hopeful DW will soon be employed. Is she responsible for SLs for her new degree? I'd really try to cash flow your Master's program since it seems possible. Is it all course work or will it include an agreed project? As an on-line program can it be stretched out if the combination of employment and course work becomes too stressful? With savings rates so low, interest rates seem so high in comparison. What rate are you being offered?

              Comment


                #8
                everything is looking good regarding debt and you have good time to repay it but you should spend your money according to a budget plan. Sometimes, we think that we have much time to pay the debt but we cannot because we did not consider the risks and budget plan.

                Comment


                  #9
                  Originally posted by Leo View Post
                  I just got accepted to Masters and it will be for 22 months (5 semester). 1 semester is around $2500. Itís not that expensive since its mostly online class.

                  $2500 every 4-5 months is actually a lot. It will be really tough for me to pay all in cash. I know I could, but I also have CC debt to knock off. Should I get a student loan or pay it in cash?

                  My wife just graduated from college and now looking for a job. My take home is $3800/month. After rent, bills, budget, IRA, etc we got around $1050 left.

                  Debts
                  CC $9,913. at 0% until Aug 2015. Planning to pay off this before the zero percent promo
                  Auto Loan $8,539 at 5.5% Planning to pay off within 3 years

                  Checking $5518
                  Savings (Emergency Fund) $5,000

                  Thanks in advance for advice.
                  What is your masters in? Hopefully not lesbian gender studies.

                  If it's something that can get you a job, I'd say go for it, just avoid private student loans at all costs.

                  Comment


                    #10
                    Originally posted by artwest
                    No!

                    If you hope to build wealth, going into debt is not a wise move. Your income is your greatest wealth building tool and if you are using that to pay off debt, you are losing ground. Pay cash if at all possible and use your income to invest. You will be amazed at how quickly you can amass wealth using compound interest.
                    Going into debt to buy things you want is not a wise move. However, small businesses in this country would not exist without debt. It's called "opportunity costs". Lending is the lifeblood of small businesses and opportunity for the "little guy". If he can genuinely and honestly get a better job with this new education, and he's looked at it from objectively viewpoint, then I don't think debt is necessary the end-all be-all bad thing you have portrayed it to be.

                    Of course, if he can avoid debt he should but to my viewpoint, time is more valuable than money. You can make as much money as you want but you'll never get back the time you have spent doing something you hate.

                    Just make sure you think this through, thoroughly.

                    Comment


                      #11
                      Originally posted by snafu View Post
                      I'm hopeful DW will soon be employed. Is she responsible for SLs for her new degree? I'd really try to cash flow your Master's program since it seems possible. Is it all course work or will it include an agreed project? As an on-line program can it be stretched out if the combination of employment and course work becomes too stressful? With savings rates so low, interest rates seem so high in comparison. What rate are you being offered?
                      My wife doesn't have any debts at all. I don't mind if she gets a low paying job in her first job. I've been there. It's all course work in first 4 semester and the 5th semester I believe is a Project. I am confident that I can work full time and do my masters at the same time. For the savings, I don't really have good offers right now.

                      Originally posted by Weird Tolkienish Figure View Post
                      What is your masters in? Hopefully not lesbian gender studies.

                      If it's something that can get you a job, I'd say go for it, just avoid private student loans at all costs.
                      Software Engineering. Please see my post #6 for more info.

                      -----

                      Thanks guys for the other replies.

                      Comment


                        #12
                        Originally posted by Leo View Post
                        My wife doesn't have any debts at all. I don't mind if she gets a low paying job in her first job. I've been there. It's all course work in first 4 semester and the 5th semester I believe is a Project. I am confident that I can work full time and do my masters at the same time. For the savings, I don't really have good offers right now.



                        Software Engineering. Please see my post #6 for more info.

                        -----

                        Thanks guys for the other replies.
                        I'd say go for it, just stay away from private loans. You will never get rid of those things if something goes wrong. At least with federal loans you can go on IBR where it takes a percentage of your income.

                        Comment


                          #13
                          Originally posted by Leo View Post
                          Hello. Thank you.

                          A. I have a Bachelor of Science in Computer Science. It will be Master of Science in Software Engineering.

                          B. My goal is to have a nice paying job. I think Masters will help a little bit. I figured 5 years experience (right now i have about 3) plus a Master in my industry can get me to 6 digits salary.

                          C. Yes increasing income. Related to my answer B.
                          Sounds like a solid plan Leo. How long would it take you to pay off the student loans (SL) with a 6 digit salary in your field?
                          ~ Eagle

                          Comment


                            #14
                            Originally posted by artwest
                            No!

                            If you hope to build wealth, going into debt is not a wise move. Your income is your greatest wealth building tool and if you are using that to pay off debt, you are losing ground. Pay cash if at all possible and use your income to invest. You will be amazed at how quickly you can amass wealth using compound interest.
                            Artwest, as someone who got an MBA and more than doubled his income largely due to further education I disagree with your recommendation to not take out SL's. As to the not going into debt, income being the greatest wealth building tool, paying cash, and use income to invest... All that sounds like Dave Ramsey's advice.

                            Sure people should try to pay cash if at all possible. I agree with you there.

                            Leo, if it means taking out SL's and you can pay it back within a few years go for the masters. Try to get as much education out of the way as possible before you have kids. If you guys plan on having kids that is.
                            Last edited by Eagle; 06-19-2014, 09:53 AM.
                            ~ Eagle

                            Comment


                              #15
                              Originally posted by Weird Tolkienish Figure View Post
                              Going into debt to buy things you want is not a wise move. However, small businesses in this country would not exist without debt. It's called "opportunity costs". Lending is the lifeblood of small businesses and opportunity for the "little guy". If he can genuinely and honestly get a better job with this new education, and he's looked at it from objectively viewpoint, then I don't think debt is necessary the end-all be-all bad thing you have portrayed it to be.

                              Of course, if he can avoid debt he should but to my viewpoint, time is more valuable than money. You can make as much money as you want but you'll never get back the time you have spent doing something you hate.

                              Just make sure you think this through, thoroughly.
                              I agre with you Weird Tolkienish Figure... Looks like Leo has thought this through. I agree with your assessment of the "opportunity cost" of debt. It's not like Leo is going to buy some toy for $15,000... It's education that will likely be very beneficial in his industry of choice.
                              ~ Eagle

                              Comment

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