Time and money, two of life’s most precious commodities…
And two things any graduate program will demand the most of. Like most people at the beginning of their journey; I was so focused on how to get into PA school that I didn’t spend much time evaluating these two crucial areas of life.
This is the first entry to a series of articles about budgeting both time and money. I’m no financial expert or time management guru. But I am a single mom who’s successfully getting through PA school debt free. I’ll share the methods, tips, and tricks that I use to stretch my dollars and minutes.
LET’S TALK ABOUT MONEY!
Anyone who has spoken to me knows that I am a hardcore Dave Ramsey fan. But achieving financial peace by living debt free is a personal choice that requires hard work, dedication and serious commitment. Even if you decide to finance your Master’s degree, there are a few important aspects to first consider.
- How long will it take to pay off the student loans?
- What’s the income range needed to pay off the debt in that time frame?
- Is the debt only covering education or living expenses as well?
Scenario: The tuition for my 27 month PA program is just under $75k ($32,795 per 12 months). This number is TUITION ONLY, it does NOT include living expenses, equipment, books, fees, transportation, etc. Using the repayment calculator on the studentloan.gov website; if I were to borrow $75,000 of unsubsidized loans at a 6.8% interest rate and make an annual income of $101,480 (2016 PA median annual wage) I would repay a total of $103,572 over a 10 year period at $863 per month. Ouch! That’s a lot of money, especially if you have a mortgage and a mouth to feed. There’s always the Public Service Loan Forgiveness, but who knows what life will throw your way during those 10years.
What’s wrong with this picture?…
These numbers are using averages. When I graduate, it is unlikely for me to be making the median salary with zero years experience as a PA. Let’s not forget about Uncle Sam. An Increase in salary puts me in a new tax bracket. More funds NOT going into my pockets.
Despite the standard 10-year repayment plan many aspire to, A recent study by Citizens Financial Group found that 60% of borrowers will take closer to 20 years to pay off their student loan debt. Whoa! Those are some serious long-term costs for an education.
FUN FACT: 44 million Americans make up the $1.34 Trillion of the nations Student Loan debt ... that’s right, Trillion! That’s more than Mortgage, auto and credit card debt combined.
Okay enough with the research, get to the point!
It’s possible to get through the program with little to no debt. The first step is creating a budget. Ugh! I know, I can’t stand that word either, but it must be done. In part 2 of “Lets Talk About Money,” I’ll break down the steps involved in creating a very detailed budget. Stay tuned my fellow type A personalities; there are lots of exciting spreadsheets and color-coded tabs ahead!