Teaching internationally to pay off my masters degree?
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josiewhelan
- Posts: 3
- Joined: Sat Mar 02, 2019 9:20 pm
Teaching internationally to pay off my masters degree?
Hello, I have a BS in Environmental Studies and an elementary certificate. I taught at an international school (using that term loosely...) in Albania for one year and have taught 2nd grade in the US for the past two. I am looking to go back to school to dive deeper into science education and have been accepted to a dual masters program for Natural Resources and Education at the University of Michigan. I am really excited about diving into academics again, but will need to take out some loans to pay for it. I assume that with my experience and adding a relevant degree on top of that I would be more marketable to international schools. Do you think so? I can live frugally and would be teaching abroad after my degree with the intent of paying off the debt faster. Does anyone have experience with this? I'm just trying to look at all my options and right now this seems like a good one for me! I appreciate all input!
Response
No.
1) The rule is outside of a few global Ivys a masters is a masters is a masters.
2) Any valid masters will get you a coin increase on the salary scale.
3) The Masters you describe isnt really relevant, maybe to teaching ESS, but not for a primary IT or any of the traditional sciences (biology, chemistry, physics).
4) Another rule is no amount of training equals any amount of experience, if youre trading teacher life and experience for student experience, that is a very poor trade off.
5) Another rule is, a Masters should always do more than provide you an entry into a classroom, it should let you pursue an opportunity you wouldnt have had before. This Masters isnt going to allow you to do anything you havent already done.
6) It sounds pricey and expensive, U. Michigan isnt cheap.
You could save a lot of coin looking at a Uni such as UPe (University of the People), total cost for their MAT in IB education is USD$2600, or U. Portsmouth their M.Res is £4625 or you could do their Ed.Ld Masters for £7000. All the programs are available part time (you could do the UPe program on its accelerated track or the M.Res full time in one year), online/distance learning and would allow you to continue teaching and building teaching experience on your resume, and are cheap enough you can probably pay for them without loans.
No one in IE (unless you find a recruiter or leadership that is a U.Mich alumni) is going care you went to U.Mich, ownership and leadership cant sell that to parents, if you want the degree to provide you actual utility in recruiting and coin you need to go to a Global Ivy such as Harvard, Yale, OxBridge, etc.. Those are degrees that will open side doors for you. Since U.Mich isnt worth anything more than any other Masters your paying a grossly inflated cost (U.Michs dual masters degrees are 3 year full time programs, their tuition is around USD$45K/yr, out of state, for the program), even if your getting the resident rate its still USD$30K/yr after tuition, books, and fees, thats USD$90K for the program which is 35x times the lowest cost alternative, to get the same salary increase, and take you out of the classroom for at least 3 years (unless your going to recruit in your final year of studies, its more like 4 years). It also means your not gaining step increase on an ISs salary scale, most ISs have a cap of at most 5 years, and you have only 3 years, thus your losing 2 years of transferable salary step at a minimum.
So, No. Just No..
I got into IE so I could dodge my student loans, I had at the time 4 degrees to pay for and my student loans were unpayable in anything involving edu. Once you leave for IE, assuming you dont go to work for DODEA (which I did), you can leave your student loans behind, so the amount of the loans really dont matter if youre not going to pay them off.
1) The rule is outside of a few global Ivys a masters is a masters is a masters.
2) Any valid masters will get you a coin increase on the salary scale.
3) The Masters you describe isnt really relevant, maybe to teaching ESS, but not for a primary IT or any of the traditional sciences (biology, chemistry, physics).
4) Another rule is no amount of training equals any amount of experience, if youre trading teacher life and experience for student experience, that is a very poor trade off.
5) Another rule is, a Masters should always do more than provide you an entry into a classroom, it should let you pursue an opportunity you wouldnt have had before. This Masters isnt going to allow you to do anything you havent already done.
6) It sounds pricey and expensive, U. Michigan isnt cheap.
You could save a lot of coin looking at a Uni such as UPe (University of the People), total cost for their MAT in IB education is USD$2600, or U. Portsmouth their M.Res is £4625 or you could do their Ed.Ld Masters for £7000. All the programs are available part time (you could do the UPe program on its accelerated track or the M.Res full time in one year), online/distance learning and would allow you to continue teaching and building teaching experience on your resume, and are cheap enough you can probably pay for them without loans.
No one in IE (unless you find a recruiter or leadership that is a U.Mich alumni) is going care you went to U.Mich, ownership and leadership cant sell that to parents, if you want the degree to provide you actual utility in recruiting and coin you need to go to a Global Ivy such as Harvard, Yale, OxBridge, etc.. Those are degrees that will open side doors for you. Since U.Mich isnt worth anything more than any other Masters your paying a grossly inflated cost (U.Michs dual masters degrees are 3 year full time programs, their tuition is around USD$45K/yr, out of state, for the program), even if your getting the resident rate its still USD$30K/yr after tuition, books, and fees, thats USD$90K for the program which is 35x times the lowest cost alternative, to get the same salary increase, and take you out of the classroom for at least 3 years (unless your going to recruit in your final year of studies, its more like 4 years). It also means your not gaining step increase on an ISs salary scale, most ISs have a cap of at most 5 years, and you have only 3 years, thus your losing 2 years of transferable salary step at a minimum.
So, No. Just No..
I got into IE so I could dodge my student loans, I had at the time 4 degrees to pay for and my student loans were unpayable in anything involving edu. Once you leave for IE, assuming you dont go to work for DODEA (which I did), you can leave your student loans behind, so the amount of the loans really dont matter if youre not going to pay them off.
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josiewhelan
- Posts: 3
- Joined: Sat Mar 02, 2019 9:20 pm
Re: Teaching internationally to pay off my masters degree?
Thanks for your response! Yes, UofM ain't cheap! However, I do live in-state and actually am likely to get a teaching assistantship so my degree(s) would only cost around $35k and take me 2 1/2 years (though I understand that that is still much more than other masters programs). I'm definitely still considering all of my options and looking at the return on investment side of the debt/degree. I guess I was hoping that because UofM is frequently ranked as one of the top 30 universities in the world that it might hold a bit more clout, but I totally understand that in many foreign countries Harvard, Stanford, etc. will be the only ones that are really recognized.
I have a question about your mentioning of your student loans because I didn't quite understand it. When you say "leave your student loans behind" do you mean just walking away from them and not paying them? Since I'm planning on returning to the US after not too long of a stint abroad I'm not sure that that's an option that would work for me.
I have a question about your mentioning of your student loans because I didn't quite understand it. When you say "leave your student loans behind" do you mean just walking away from them and not paying them? Since I'm planning on returning to the US after not too long of a stint abroad I'm not sure that that's an option that would work for me.
Reply
@josiewhelan
Gosh thats still 15x times what the least expensive alternative is and assumes you do get an assistantship, if you dont your looking at USD$90K for the program, I hope that assistantship isnt just a hope, and is a lot more firm than just hoping it happens.
No, U. Mich has no prestige value attached to it in IE, its just a uni and the degree is just a Masters.
Yes, I mean you dont pay them, you just walk away from the loans. There are zero consequences in doing so and zero enforcement mechanisms outside of the US. They dont block passports for student loans, wage garnishments are ineffective outside the US, and you wont pay any US taxes or have a refund for them to offset in IE. The worst they can do is trash your US credeit but you will leave your US credit at the airport when you leave the US, it will mean nothing overseas as an expat.
Why are you going through all of this work just for a short stint in IE?
USD$35K is a huge amount of coin for whats going to amount to as a visit in IE, and Michigan isnt saturated in DTs (at least not in sciences) and I cant see how a Masters stipend in a Michigan DS would ever pay the USD$35K price tag from U. Mich (its only about USD$1000-USD$2000 a year). The USD$35K isnt a high enough debt load to get any advantage from public forgiveness, even after interest and service on the debt, your looking at about USD$40K, divided over 10 years is USD$4K/yr, or about USD$334/mth which is easily within the 10% (even 15%) of the typical DTs salary. You wont get anything forgiven. Youre basically paying the cost of a nice car (you can get a Tesla for that coin) to have a couple pieces of paper that hang on your wall which you will spend your whole career in IE to break even, or at a significant loss if you do it in DE.
Unless IE is your financial aid plan, USD$35K (plus whatever your housing and living costs are for those three years) for full-time study figure on a poor grad student budget you could do an apartment/flat, utilities, and market/groceries for USD$1000/mth or USD$12K/yr, thats USD$36K for the program call it $USD$40K, and your looking at USD$75K for the full three years. Then you head to the ME or China, and crush it, spend two years in the ME living in a compound and you do nothing but live like a monk and you could recoup the USD$75K in 2 years saving almost all of your salary, 4 years in China doing the same thing. Then with everything paid off, you head back to the US debt free (assuming you dont have other consumer debt). Thats what 5 years minimum for a Masters that isnt worth more than any other Masters.
Okay, so you get 2 degrees from U.Mich, go too UPe part time to get the MAT IB Masters, you still get an edu Masters and IB PD requirement, and it only costs you $2600, you could then enroll concurrently or consecutive at Uni. Portsmouth in their M.Res program and you dont have to do education, you could do any faculty including the School of Earth and Environmental Sciences and that costs you £4625 (about USD$6100), add the two together and your looking at USD$8700 for two degrees, which you can afford as you can continue working in IE and then after a two year contract you will have more experience on your resume, two Masters in what you want, that cost you less than USD$9K about about a quarter of the tuition alone, and you had a fraction of the living expenses because your OSH package paid for the bulk of your living expenses, and youll finish that two years with coin in your pocket, because saving USD$9K isnt hard to do in the ME or a lot of parts in Asia.
So what exactly is UofM doing for you other than giving you warm fuzzy feelings with their admittance letter and maybe an assistantship, all for the privilege of spending a whole lot of coin on a piece of paper while taking you out of the classroom?
AND FYI assistantships suck, they are slave labor for slave wages, you will be the lowest of the low in regards to faculty. Your desk will be shared with the department coffee pot and the coffee pot will be more important than you, all too work twice as hard for a fraction of the comp, none of which (even in the case of a teaching assistantship) will count for salary in IE or DE, all for some experience lecturing, and marking which you already have as a DT/IT. Assuming you get that assistantship, its worth about USD$55K, over three years its thats USD$18K/yr, thats what your working for, a salary of USD$18K, your working for ESOL coin.
Gosh thats still 15x times what the least expensive alternative is and assumes you do get an assistantship, if you dont your looking at USD$90K for the program, I hope that assistantship isnt just a hope, and is a lot more firm than just hoping it happens.
No, U. Mich has no prestige value attached to it in IE, its just a uni and the degree is just a Masters.
Yes, I mean you dont pay them, you just walk away from the loans. There are zero consequences in doing so and zero enforcement mechanisms outside of the US. They dont block passports for student loans, wage garnishments are ineffective outside the US, and you wont pay any US taxes or have a refund for them to offset in IE. The worst they can do is trash your US credeit but you will leave your US credit at the airport when you leave the US, it will mean nothing overseas as an expat.
Why are you going through all of this work just for a short stint in IE?
USD$35K is a huge amount of coin for whats going to amount to as a visit in IE, and Michigan isnt saturated in DTs (at least not in sciences) and I cant see how a Masters stipend in a Michigan DS would ever pay the USD$35K price tag from U. Mich (its only about USD$1000-USD$2000 a year). The USD$35K isnt a high enough debt load to get any advantage from public forgiveness, even after interest and service on the debt, your looking at about USD$40K, divided over 10 years is USD$4K/yr, or about USD$334/mth which is easily within the 10% (even 15%) of the typical DTs salary. You wont get anything forgiven. Youre basically paying the cost of a nice car (you can get a Tesla for that coin) to have a couple pieces of paper that hang on your wall which you will spend your whole career in IE to break even, or at a significant loss if you do it in DE.
Unless IE is your financial aid plan, USD$35K (plus whatever your housing and living costs are for those three years) for full-time study figure on a poor grad student budget you could do an apartment/flat, utilities, and market/groceries for USD$1000/mth or USD$12K/yr, thats USD$36K for the program call it $USD$40K, and your looking at USD$75K for the full three years. Then you head to the ME or China, and crush it, spend two years in the ME living in a compound and you do nothing but live like a monk and you could recoup the USD$75K in 2 years saving almost all of your salary, 4 years in China doing the same thing. Then with everything paid off, you head back to the US debt free (assuming you dont have other consumer debt). Thats what 5 years minimum for a Masters that isnt worth more than any other Masters.
Okay, so you get 2 degrees from U.Mich, go too UPe part time to get the MAT IB Masters, you still get an edu Masters and IB PD requirement, and it only costs you $2600, you could then enroll concurrently or consecutive at Uni. Portsmouth in their M.Res program and you dont have to do education, you could do any faculty including the School of Earth and Environmental Sciences and that costs you £4625 (about USD$6100), add the two together and your looking at USD$8700 for two degrees, which you can afford as you can continue working in IE and then after a two year contract you will have more experience on your resume, two Masters in what you want, that cost you less than USD$9K about about a quarter of the tuition alone, and you had a fraction of the living expenses because your OSH package paid for the bulk of your living expenses, and youll finish that two years with coin in your pocket, because saving USD$9K isnt hard to do in the ME or a lot of parts in Asia.
So what exactly is UofM doing for you other than giving you warm fuzzy feelings with their admittance letter and maybe an assistantship, all for the privilege of spending a whole lot of coin on a piece of paper while taking you out of the classroom?
AND FYI assistantships suck, they are slave labor for slave wages, you will be the lowest of the low in regards to faculty. Your desk will be shared with the department coffee pot and the coffee pot will be more important than you, all too work twice as hard for a fraction of the comp, none of which (even in the case of a teaching assistantship) will count for salary in IE or DE, all for some experience lecturing, and marking which you already have as a DT/IT. Assuming you get that assistantship, its worth about USD$55K, over three years its thats USD$18K/yr, thats what your working for, a salary of USD$18K, your working for ESOL coin.
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interteach
- Posts: 212
- Joined: Wed Nov 29, 2006 2:25 pm
Re: Teaching internationally to pay off my masters degree?
To update, there is no longer a statute of limitations on the federal part of your student loans - they will follow you for as long as the US government wants to.
There's also a morality issue at play here, but that doesn't seem to be an issue for those who try to skip out on them.
There's also a morality issue at play here, but that doesn't seem to be an issue for those who try to skip out on them.
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josiewhelan
- Posts: 3
- Joined: Sat Mar 02, 2019 9:20 pm
Re: Teaching internationally to pay off my masters degree?
@psyguy
I acknowledged that this program is way more expensive than other options and that that's a huge factor to consider. I can double count credits for this degree so it would take me two years of full time classes and then one semester with one course. I've been talking with financial aid, and the cost is $49k tuition + books with no help (and I am already expecting a couple of grants). I have enough to cover living expenses (living humbly).
And yes, perhaps I wasn't more clear. I am pretty sure I can save more in IE than I can in the US teaching positions that I am in now (even saving 43% of my current salary is only $12000). So in essence, I was mainly fact -checking if I could save enough to pay off the potential debt in a few years. You confirmed that I can. I still don't know where I'm going to school, but this has definitely given me something to think about and I appreciate your input as someone who has tons of experience in the international community. I plan on having most of my career in the US in Science Education and Curriculum (thus my prospective degree choice) and most of the jobs I'm seeing in that field require a hard science masters, but like to see education masters as well. I guess I'd rather live like a monk in a foreign country while paying off debts than feeling stuck in one place in the US. Just a different perspective I suppose.
Not sure I could morally skip out on my loans even if it were still an option.
Thanks for your input! It was the first that I'd heard of University of the People. Truly interesting concept! Most schools in the US don't recognize it though so I'm not sure that it's much of an option for those who want to use a masters to move up the pay scale if they return to teaching in the US, but awesome that it exists and that it's helping people around the world obtain an affordable degree.
I acknowledged that this program is way more expensive than other options and that that's a huge factor to consider. I can double count credits for this degree so it would take me two years of full time classes and then one semester with one course. I've been talking with financial aid, and the cost is $49k tuition + books with no help (and I am already expecting a couple of grants). I have enough to cover living expenses (living humbly).
And yes, perhaps I wasn't more clear. I am pretty sure I can save more in IE than I can in the US teaching positions that I am in now (even saving 43% of my current salary is only $12000). So in essence, I was mainly fact -checking if I could save enough to pay off the potential debt in a few years. You confirmed that I can. I still don't know where I'm going to school, but this has definitely given me something to think about and I appreciate your input as someone who has tons of experience in the international community. I plan on having most of my career in the US in Science Education and Curriculum (thus my prospective degree choice) and most of the jobs I'm seeing in that field require a hard science masters, but like to see education masters as well. I guess I'd rather live like a monk in a foreign country while paying off debts than feeling stuck in one place in the US. Just a different perspective I suppose.
Not sure I could morally skip out on my loans even if it were still an option.
Thanks for your input! It was the first that I'd heard of University of the People. Truly interesting concept! Most schools in the US don't recognize it though so I'm not sure that it's much of an option for those who want to use a masters to move up the pay scale if they return to teaching in the US, but awesome that it exists and that it's helping people around the world obtain an affordable degree.
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wrldtrvlr123
- Posts: 1173
- Joined: Sat Feb 06, 2010 10:59 am
- Location: Japan
Re: Teaching internationally to pay off my masters degree?
josiewhelan wrote:
> Hello, I have a BS in Environmental Studies and an elementary certificate. I taught
> at an international school (using that term loosely...) in Albania for one year
> and have taught 2nd grade in the US for the past two. I am looking to go back to
> school to dive deeper into science education and have been accepted to a dual masters
> program for Natural Resources and Education at the University of Michigan. I am
> really excited about diving into academics again, but will need to take out some
> loans to pay for it. I assume that with my experience and adding a relevant degree
> on top of that I would be more marketable to international schools. Do you think
> so? I can live frugally and would be teaching abroad after my degree with the intent
> of paying off the debt faster. Does anyone have experience with this? I'm just trying
> to look at all my options and right now this seems like a good one for me! I appreciate
> all input!
====================
I would agree that walking away from student loans is not a great plan for most people (especially if having good credit in the US is important to you). Also, you never know when the policies on defaulted loans may change, for the worse (e.g. collections, garnishing, trouble with licensing, etc.).
In addition, with Public Service Loan Forgiveness, Income Based/Driven repayment options, etc. it's probably not really necessary for most people if you make reasonable life choices.
I agree that living frugally overseas can be easier in many cases, financially and/or perceptually. Our first gigs overseas were in Egypt and we were able to save one whole persons salary which was wayyyyyyy more than we saved in FL. Housing allowance, lower cost of living, not needing a car, the feeling like just living there was an adventure that didn't require spending a lot on other things, all made it easier to save money.
> Hello, I have a BS in Environmental Studies and an elementary certificate. I taught
> at an international school (using that term loosely...) in Albania for one year
> and have taught 2nd grade in the US for the past two. I am looking to go back to
> school to dive deeper into science education and have been accepted to a dual masters
> program for Natural Resources and Education at the University of Michigan. I am
> really excited about diving into academics again, but will need to take out some
> loans to pay for it. I assume that with my experience and adding a relevant degree
> on top of that I would be more marketable to international schools. Do you think
> so? I can live frugally and would be teaching abroad after my degree with the intent
> of paying off the debt faster. Does anyone have experience with this? I'm just trying
> to look at all my options and right now this seems like a good one for me! I appreciate
> all input!
====================
I would agree that walking away from student loans is not a great plan for most people (especially if having good credit in the US is important to you). Also, you never know when the policies on defaulted loans may change, for the worse (e.g. collections, garnishing, trouble with licensing, etc.).
In addition, with Public Service Loan Forgiveness, Income Based/Driven repayment options, etc. it's probably not really necessary for most people if you make reasonable life choices.
I agree that living frugally overseas can be easier in many cases, financially and/or perceptually. Our first gigs overseas were in Egypt and we were able to save one whole persons salary which was wayyyyyyy more than we saved in FL. Housing allowance, lower cost of living, not needing a car, the feeling like just living there was an adventure that didn't require spending a lot on other things, all made it easier to save money.
Reply
@interteach
There never as a statute of limitations for federal student loans to begin with. A statute of limitations isnt relevant to the discussion, its not an issue of can a lender get a judgment its that they have no enforcement to compel or force collection.
@josiewhelan
Gosh, USD$50K compared to U.Portsmouth at USD$6K,thats 10x the cost and you have to leave the classroom for three years to do it, and Portsmouth doesnt have any accreditation issues at all. Gosh, you could do a M.Res in whatever science field you want AND a MS in Ed.Ld and it would cost you around USD$15K compared to your USD$50K (books arent free), and youd get to stay in the classroom building experience the whole time. The math is the math, and Im not seeing the benefit in the CBA of paying so much more, so what am I missing? If your rational is you just want too (that must have been one pixie dust and unicorn rainbow fart saturated admissions letter), than okay moving on.
Skipping out on your loans is still an entirely viable option, @interteach comment isnt relevant.
You can absolutely save more in IE than you can in DE provided the right opportunity and scenario.
@WT123
Income sensitive repayment means very little, your just volunteering to give them coin, as there are maybe only a handful of ISs that would qualify an IT for public loan forgiveness. The vast, vast majority of ISs are not public organizations and dont qualify as public service.
Collections and Garnishment are not issues ITs need to contend with outside the US.
There never as a statute of limitations for federal student loans to begin with. A statute of limitations isnt relevant to the discussion, its not an issue of can a lender get a judgment its that they have no enforcement to compel or force collection.
@josiewhelan
Gosh, USD$50K compared to U.Portsmouth at USD$6K,thats 10x the cost and you have to leave the classroom for three years to do it, and Portsmouth doesnt have any accreditation issues at all. Gosh, you could do a M.Res in whatever science field you want AND a MS in Ed.Ld and it would cost you around USD$15K compared to your USD$50K (books arent free), and youd get to stay in the classroom building experience the whole time. The math is the math, and Im not seeing the benefit in the CBA of paying so much more, so what am I missing? If your rational is you just want too (that must have been one pixie dust and unicorn rainbow fart saturated admissions letter), than okay moving on.
Skipping out on your loans is still an entirely viable option, @interteach comment isnt relevant.
You can absolutely save more in IE than you can in DE provided the right opportunity and scenario.
@WT123
Income sensitive repayment means very little, your just volunteering to give them coin, as there are maybe only a handful of ISs that would qualify an IT for public loan forgiveness. The vast, vast majority of ISs are not public organizations and dont qualify as public service.
Collections and Garnishment are not issues ITs need to contend with outside the US.
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wrldtrvlr123
- Posts: 1173
- Joined: Sat Feb 06, 2010 10:59 am
- Location: Japan
Re: Teaching internationally to pay off my masters degree?
PsyGuy wrote:
> @WT123
>
> Income sensitive repayment means very little, your just volunteering to give them
> coin, as there are maybe only a handful of ISs that would qualify an IT for public
> loan forgiveness. The vast, vast majority of ISs are not public organizations and
> dont qualify as public service.
>
> Collections and Garnishment are not issues ITs need to contend with outside the US.
======================
Income sensitive repayment is not contingent on PSLF. It can be a way to make payments and keep a loan in good standing without making yourself cash poor.
The OP has already said that they plan on spending a significant portion of their personal/professional life in the US so PSLF could be an option at some point and so could consequences for defaulting on loans.
> @WT123
>
> Income sensitive repayment means very little, your just volunteering to give them
> coin, as there are maybe only a handful of ISs that would qualify an IT for public
> loan forgiveness. The vast, vast majority of ISs are not public organizations and
> dont qualify as public service.
>
> Collections and Garnishment are not issues ITs need to contend with outside the US.
======================
Income sensitive repayment is not contingent on PSLF. It can be a way to make payments and keep a loan in good standing without making yourself cash poor.
The OP has already said that they plan on spending a significant portion of their personal/professional life in the US so PSLF could be an option at some point and so could consequences for defaulting on loans.
Reply
@WT123
Thats true, and the interpretation of that is your keeping a loan in "good standing" while throwing coin down a hole for the significant bulk of your career. Graduate loan interest rates are 6.6%, income sensitive payments are 10% of discretionary income. The LW is borrowing $50K, make the math easy and they are making $50K/yr in DE without PSLF they have to make those payments for 25 years to have the remainder discharged, and thats what will happen because at a 10% repayment plan your mostly paying off interest and barely touching the principal. $50K loan at 6.6% is $3300/yr in interest, after 25 years thats $82500 in interest. If the LW makes $50K/yr and makes 10% income sensitive payments thats $5K/yr after 25 years they have paid back $125,000, of which $82500 is interest, that leaves $42500 of the $50K principal paid. They didnt even pay back what they owed even though it cost them 2.5x times what they borrowed, and that $125K is a house, not a huge house, not a great house but a house, all for what to "keep a loan in good standing"? Oh wait morality reasons.
It wouldnt even hurt them if they returned to the US after how ever many years in IE, they would be in default and when they returned they would just rehabilitate the loan. Make payments on them while they can take advantage of the PSLF, so that after 10 years, they borrowed $50K, they payback 10%/yr on income sensitive repayments, which is $5K/yr and then after 10 years they have paid back $50K (what they borrowed) and the rest is discharged in forgiveness.
Thats true, and the interpretation of that is your keeping a loan in "good standing" while throwing coin down a hole for the significant bulk of your career. Graduate loan interest rates are 6.6%, income sensitive payments are 10% of discretionary income. The LW is borrowing $50K, make the math easy and they are making $50K/yr in DE without PSLF they have to make those payments for 25 years to have the remainder discharged, and thats what will happen because at a 10% repayment plan your mostly paying off interest and barely touching the principal. $50K loan at 6.6% is $3300/yr in interest, after 25 years thats $82500 in interest. If the LW makes $50K/yr and makes 10% income sensitive payments thats $5K/yr after 25 years they have paid back $125,000, of which $82500 is interest, that leaves $42500 of the $50K principal paid. They didnt even pay back what they owed even though it cost them 2.5x times what they borrowed, and that $125K is a house, not a huge house, not a great house but a house, all for what to "keep a loan in good standing"? Oh wait morality reasons.
It wouldnt even hurt them if they returned to the US after how ever many years in IE, they would be in default and when they returned they would just rehabilitate the loan. Make payments on them while they can take advantage of the PSLF, so that after 10 years, they borrowed $50K, they payback 10%/yr on income sensitive repayments, which is $5K/yr and then after 10 years they have paid back $50K (what they borrowed) and the rest is discharged in forgiveness.
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wrldtrvlr123
- Posts: 1173
- Joined: Sat Feb 06, 2010 10:59 am
- Location: Japan
Re: Teaching internationally to pay off my masters degree?
PsyGuy wrote:
> @WT123
>
> Thats true, and the interpretation of that is your keeping a loan in "good standing"
> while throwing coin down a hole for the significant bulk of your career. Graduate
> loan interest rates are 6.6%, income sensitive payments are 10% of discretionary
> income. The LW is borrowing $50K, make the math easy and they are making $50K/yr
> in DE without PSLF they have to make those payments for 25 years to have the remainder
> discharged, and thats what will happen because at a 10% repayment plan your mostly
> paying off interest and barely touching the principal. $50K loan at 6.6% is $3300/yr
> in interest, after 25 years thats $82500 in interest. If the LW makes $50K/yr and
> makes 10% income sensitive payments thats $5K/yr after 25 years they have paid back
> $125,000, of which $82500 is interest, that leaves $42500 of the $50K principal
> paid. They didnt even pay back what they owed even though it cost them 2.5x times
> what they borrowed, and that $125K is a house, not a huge house, not a great house
> but a house, all for what to "keep a loan in good standing"? Oh wait morality reasons.
>
> It wouldnt even hurt them if they returned to the US after how ever many years in
> IE, they would be in default and when they returned they would just rehabilitate
> the loan. Make payments on them while they can take advantage of the PSLF, so that
> after 10 years, they borrowed $50K, they payback 10%/yr on income sensitive repayments,
> which is $5K/yr and then after 10 years they have paid back $50K (what they borrowed)
> and the rest is discharged in forgiveness.
===================
Yes, for some silly reason, many/most people figure that if they borrow money in good faith, then they should actually plan on paying it back.
> @WT123
>
> Thats true, and the interpretation of that is your keeping a loan in "good standing"
> while throwing coin down a hole for the significant bulk of your career. Graduate
> loan interest rates are 6.6%, income sensitive payments are 10% of discretionary
> income. The LW is borrowing $50K, make the math easy and they are making $50K/yr
> in DE without PSLF they have to make those payments for 25 years to have the remainder
> discharged, and thats what will happen because at a 10% repayment plan your mostly
> paying off interest and barely touching the principal. $50K loan at 6.6% is $3300/yr
> in interest, after 25 years thats $82500 in interest. If the LW makes $50K/yr and
> makes 10% income sensitive payments thats $5K/yr after 25 years they have paid back
> $125,000, of which $82500 is interest, that leaves $42500 of the $50K principal
> paid. They didnt even pay back what they owed even though it cost them 2.5x times
> what they borrowed, and that $125K is a house, not a huge house, not a great house
> but a house, all for what to "keep a loan in good standing"? Oh wait morality reasons.
>
> It wouldnt even hurt them if they returned to the US after how ever many years in
> IE, they would be in default and when they returned they would just rehabilitate
> the loan. Make payments on them while they can take advantage of the PSLF, so that
> after 10 years, they borrowed $50K, they payback 10%/yr on income sensitive repayments,
> which is $5K/yr and then after 10 years they have paid back $50K (what they borrowed)
> and the rest is discharged in forgiveness.
===================
Yes, for some silly reason, many/most people figure that if they borrow money in good faith, then they should actually plan on paying it back.
Reply
@WT123
Yet, corporations use strategic bankruptcy to restructure their debt load all the time. Banks love this type of predatory lending where loaning a student USD$50K gets them 2-3 times their coin bank in interest, since forgiveness will just mean the guarantor (the tax payers) will pay back the principal and whatever else is left.
Yet, corporations use strategic bankruptcy to restructure their debt load all the time. Banks love this type of predatory lending where loaning a student USD$50K gets them 2-3 times their coin bank in interest, since forgiveness will just mean the guarantor (the tax payers) will pay back the principal and whatever else is left.