College/Money issues

[JumpinMacFlash]

Just recently I've accepted the fact that I am going to be going into debt. I've made it through three years of college debt free, but that won't be the case. I was almost completely broke after this last school year and will make a little over $4000 this summer. I got approved for a Stafford loan to cover all of my tuition, but I'm not sure if I want to do that. I have no car because I was in an accident in January where the one I was driving was totaled. If I want a decent car, I'm going to have to take out a loan too. I'm a little leery of taking out loans for each one at the same time, but I need both.

 

I'm admittedly naive about loans and such and I've never spent much on a car. Brewerfan.net is usually where I resolve most of my confusion, so I guess I was wondering if anyone had any advice about either.

[PeaveyFury]

Student loans are probably worth every penny, as the education/degree you get will likely make up for the cost. Considering that most loans are also incredibly low interest, it's probably an easy decision, especially considering that you're going to have little in terms of student loan debt overall thanks to your first three years. Definitely look into the subsidized Stafford if you have the option, as then the interest/payments are deferred until you're out of school, IIRC.

[unsanitary999]

I go to college right now -- I've been forced to take loans from day one. I figure that by the end of my undergraduate degree, I'll be about $15 grand - $25 grand in debt.

 

I figure it'll pay for itself someday.

[jaybird2001wi]

Just consider yourself fortunate that you went through your first three years debt free. I have accumulated in upwards of $23,000 in debt thus far and I haven't even gotten my degree yet (I have one more semester left). I had some grants my sophomore year but they took all of them away because my older brother (who happened to have a scholarship at Carthage and paid his own way) moved out of my parents house. Bless the parental contribution where people believe parents contribute EVERY time.

[ajgodson]

If you can, take as much of the subsidized Stafford Loans as possible. The interest is deferred until 6 mo. after you graduate and even then can be deferred w/o interest if you do grad school or americorps, etc. The rates are far better than you'll get on any commercial loan.

 

I would recommend getting a used car you can afford. A lot of your classmates will run out and buy new cars right after college as some sort of "made it" badge. You'll be much better off financially if you resist the temptation and buy a solid used car.

 

Don't fret too much about being it debt. I hate it, just like everyone else, but it's a fact of life. Someday you'll have a mortgage and be in debt anyway. As long as you manage your debt wisely (i.e. not credit cards) it can be useful and necessary to taking the next steps.

[bork]

Beside having low interest rates, the interest paid on school loans is also tax deductible. So you're better off taking out a school loan and paying as much cash as possible for a car. Interest on a car loan is just money out the window.

 

The rule of thumb I've heard is that the total of your school loans should be less than your expected salary in your first year after graduation.

[jaybird2001wi]

I had or have a lot of money issues when I was full time college student, I was so careless with money I became the victim of thousands of dollars worth of payday advance loans and I am still paying for it despite my mistakes being 2 years old. Because I did a lot of payday advances, I had to take a few semesters off of college and file for a forebearance on all my college loans. Totalling two of my cars (once for falling asleep at the wheel since I worked too dang much one summer, 80 hours a week) didn't make matters any better.

My grandpa once said, "If you can't afford something, you don't need it." My gramps is right about that.

All of these factors have lowered my credit score to the point where I can't be eligible for a used car loan anymore (my credit rating was actually in the 600's when I was 19) and now I would be shocked if it is near 400 today (I am 24).