Becoming Debt Free in 2009

January 29, 2009

Student Loan Info Needed

Filed under: Dave Ramsey,Debt,Personal Finance,School Loans — ambercouric @ 10:26 am
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I know very little about student loans.  I know that there are those that think they are great and those that think they are the devil.

A friend was asking me some questions and I thought I would just stick the info out for all of you to answer.  If you know of other bloggers who know a lot about student loans, I would appreciate if you either let me know their site or ask them to stop by here and answer.

Here is the situation:

My friend’s son wants to go to a school that is private and in another state.  The total to attend is $47,000.   The EFC calculator gave them a figure of $8,000 for them to pay.  They have no idea what kind of financial aid will be offered but she says they have NO money to pay.  So for a hypothetical situation say he has to borrow $30,000 per year.  That would be $120,000 over four years.  How are the terms set up -over how many years?  What types of loans should she look for?  How much would the monthly payments be if they borrow this huge amount?

Again, I know nothing about student loans but will be doing some research.  Please share your student loan experiences with me.  I would like to be able to have an intelligent conversation with my friend about student loans and what to expect.  She does have the option of paying by taking out a  second mortgage but I think this is a bad idea.

I must also say that before reading several PF I would have said ABSOLUTELY NO LOANS – but with insight from Dog Ate My Finances and Shtinkykat my opinion has lighten up a bit.

I welcome comments from parents, students, or anyone with any opinion on this

January 6, 2009

Is it a good time to go back to school?

Filed under: Journey to Debt Freedom,School Loans — ambercouric @ 11:33 am
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Is it a good time to go back to school?  My husband and I have been thinking about this lately.  He wants a master’s degree and has wanted to go back to school for  a while.  It was just never a priority. 

Right now is not the greatest time to be looking for a job but I was thinking that staying put in a current job that is secure and getting the master’s would work out perfectly.  Hopefully in 2-3 years the economy should be bouncing back and more jobs should be available. 

Our plans have always been to move to Hilton Head Island and we plan to do that in 2012.   DH can transfer with his job but with a master’s degree he would have a few more options available.

We would plan to pay cash for the tuition which means we would be on BEANS AND RICE for at least three years.  Becoming debt free this year would make this a bit easier financially. 

So what do you think?  Is this a good time to go back to school?

October 29, 2008

What Dave Ramsey Taught Me About Student Loans

Filed under: School Loans — ambercouric @ 10:53 am
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Up until a few years ago, I had no idea about Sallie Mae. I remember listening to Dave Ramsey on the internet once in a while and would hear the discussion about student loans. I’ll say up front that both DH and I went to college on full scholarship. Graduated with no debt. That was a little more than 20 years ago. So the truth is I knew some people received loans but had no idea of the impact on their lives. We were blessed with a free education.

Once I started listening to Dave, I was shocked to hear the totals of student loans. Many people had student loans that were more than $50,000 and even some over $100,000. Did I already say I was shocked? This seemed like such a huge amount that I just couldn’t believe it. Now let me say that my reaction wasn’t to do with the fact that people had loans it was just that I had never heard such large amounts in student loans. I thought school loan payments were like $50 – $100 a month. On Dave’s show I was hearing $600 or more.

The reason I never heard of it was because I lived in a vaccum. Well, not really but I was out of college and of course 40 year olds with children aren’t usually hanging out on a college campus. Then my friends’ children began going off to college. At that point I would hear about how much they had to pay and that they were either refinancing their houses or taking out school loans.

We had a small college fund but no where near enough to pay for 4 years of school. Four years would be at least $100,000. At this point my son was two years away from college – a year away from applying. Panic struck. I had heard the horror stories. I began searching on the web and found even more things that would put me in a frenzy. I didn’t tell my son that we couldn’t pay for his entire education. I didn’t want him to worry. I knew I could cover the first year no problem. There was only one school my son wanted to attend. He had decided that was the only school he would apply to. We encouraged (read MADE) him to visit other schools. Not so much because of finances but we felt he needed to see several college campuses.

While he was in the process of visiting schools, I began to research and find the out what types loans and scholarships were available. At some point in the middle of all of this I read and article about SAT scores. At most schools, SAT score is one of the most important factors when receiving scholarships. The reason being SAT is a uniformed test so no matter how your school grades, the SAT gives a better indicator of where you stand against others.

My son had taken the SAT and his score was a guarantee that he would be accepted to any of the schools we visited. But were they good enough to be part of the elite? The “elite” at each college is different. Unless you are looking at Ivy League which we were not. Since we were still in the process of visiting schools, I suggested he take the SAT one more time -“Just for the fun of it.” Actually, I signed him up and told him to be there. Teenagers sometimes have to be told “because I’m the parent”. A couple of weeks later he visited the school that he thought would be his second choice. When he got there he loved it. He left there that day and made up his mind. The school was smaller. He would have more contact with his professors. It was a perfect match.

Between the time of the second SAT and receiving the scores he sent all of his applications off. He was accepted to all of the schools. But the school that eventually became his first choice offered him a full scholarship. The scholarship money also includes his books, parking decal, and all the extra fees. If he hadn’t taken the SAT a second time – the school would have offered him some money but nowhere near the package he received.

How does this apply to Dave Ramsey? He scared me to death about student loans. He caused me to do the research necessary to make sure that my son wasn’t one of his callers in 20 years saying he just paid off his student loan.

For anyone who has junior high to high school children, I encourage you to begin planning for the SAT. I have some great resources I’ll be glad to share. For anyone with student loans, I encourage you to find a high school student that you can encourage to look for alternatives. I heard over and over that scholarships weren’t available. My son is proof that they are available if you search.

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