Q: I’ve heard that there’s a lifetime cap on the amount of federal loans you can take out, but haven’t been able to find reliable info on that. Any resources you recommend in terms of planning ahead for those of us going back to school after previous degrees? (especially previous graduate degrees)
A: The term “Lifetime” limit is a little deceiving. Is there a limit? Yes. Does it last a lifetime? No. This is good news. According to the official Stafford Loan website, once a student reaches his or her aggregate loan limit, they cannot borrow federal loans until the loans are paid down. So, there is a ceiling, but as long as you pay some of it down, you can fill it back up. And these limits aren’t exactly low. So I wouldn’t worry too much!
I recently had someone email me through my other blog, FeministMidwife. She has been accepted into a midwifery program but is unsure if she will go due to uncertainty about student loans. From her email, it seems as though this is what she wants to do with her life and she is thrilled about her college acceptance, but the prospect of student loans is already getting her down.
All I can say is, I have the most student loans of anyone that I know, and I am making it work. I took out loans for all of undergraduate and graduate school. I knew what I wanted to do with my life, and I knew that I was going to find a way to do it even if I had to borrow money to do so. I actively chose programs that I knew had street cred, so that my prospects of finding a job would be supported by the program culture itself. Looking back I would likely borrow differently: more federal and less private, ask more questions and be more persistent about scholarships and school opportunities, and would have waited to consolidate until I had more knowledge about private consolidation processes. But I would still borrow. I continued to ignore that gut feeling, and just focused on that loving feeling. And now I am loving it every day.
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Figure out what you love. Do everything you need to get there. Love it. And then work like heck to pay it off.
“In March, the Rhode Island single mother got a much bigger present from a businessman who read the Dec. 24 article about people facing financial hardship at the holidays.
The man, who asked that his name not be used to preserve his privacy, paid off Becote’s college loans, which totaled more than $35,000. In January, he wired her $5,000 to help with her expenses.
Becote earns about $13.65 an hour as a case manager for a community mental health center. With her five children in tow, she ran out of gas on the way to the interview for the December article and had to borrow money to fill her tank.“
These folks have a familiar situation: Highly educated but with very little financial literacy. They have found the values that are important to them, and so their income isn’t very high, but that means that they need to be more financially responsible that anyone else.
“Between the two of them, the Storeys have logged almost 14 combined years of college and postgraduate course work.
The result: The couple — who made about $60,000 combined last year and rent a Green Lake neighborhood mother-in-law apartment — have racked up nearly $135,000 in student debt.
“We think about having a family and maybe buying a home someday,” says Helen, but “It’s hard to see how that is possible with the amount of student loans we have. And yet, we don’t want to pinch pennies until the end. We still want to enjoy life now.”
What to do?
True to form, the experienced scholars sought a crash course in money management. Helen completed an online survey to participate in a free financial makeover from a member of the Puget Sound Chapter of the Financial Planning Association.”
This isn’t the first time we’ve seen a really awesome incentive system like this. Rural areas benefit in many ways from those with student debt. They produce tax dollars, family based communities, and economic opportunities for the entire town. But the cash incentives clearly make a difference to this same people. It’s mutually beneficial.
“Last year after completing her master’s degree, Dayna Bechard Elliott, 34, took some major risks few would consider. She quit her corporate job in Kansas City and moved to Tribune, Kansas (population: 741) to open a restaurant with a business partner. Burdened with $30,000 in student loan debt, she admits this life change could have been a recipe for financial failure. But Elliott had a big safety net: the state of Kansas would help to pay off her student loans as long as she lived in a rural part of the state.
An increasing number of cities and states are trying combat dwindling populations-commonly known as the brain drain- by luring recent graduates to their areas offering economic incentives such as college loan reimbursement and tax exemptions to those who move there. With student loan debt in the U.S. fast approaching the $1 trillion mark and the majority of those loans at $10,000 or more, this perk is becoming increasingly attractive.”
The grass is starting to turn green, it’s opening day for some of your favorite baseball teams, and it’s time for a bit of spring cleaning. But spring cleaning doesn’t have to mean throwing everything away. Here are a few ways to spruce up those closets and turn it into income.
1. Amazon. We’re all familiar with one-click shopping, but that could work for you too. In earlier years we’ve set up a sellers account and started listing a few old textbooks ($80), best sellers ($20), and even my old Super Nintendo! We were very surprised at how much money we recouped through this method. Amazon takes a percentage of the sale, but in the end it’s still money in your pocket! Know that not everything you have can turn a profit. You’ll see that some books and CDs go for as little as a few cents. (Keep an eye out to make sure you keep shipping costs down, because it eats into your profits.)
2. Craigslist. Not limited to “Missed Connections” and old copies of Playboy for free. In the last year, we’ve sold bigger items like a love seat, bedroom dresser, and extra bed for nearly the price we bought them at (if not a little more in one case…) and that money turned into an upgrade that fit our style and space better.
3. Bulletin Boards. Public library, telephone poles, coffee shop, breakroom at work. This is great for single items. Kitchen wares, bicycles, seedlings, and extra craft supplies. One flyer could be the difference between having extra room in your office or fixing the cascade of tupperware falling at you everyday.
4. Carmax I bet you have a couple of Cadillacs in the linen closet, don’t you? Well, maybe not. But last year, we realized that based on insurance, taxes, gasoline, an extra parking space and the fact that we were living in a location where I could walk to work, it just didn’t make sense to keep the second car that we had needed in years prior. In less than 90 minutes I had a very reasonable quote, (which helped me make my decision) then a large check, and a clean slate. No hassle. This isn’t an option for everyone, but since it is one of the biggest items most people own, it could make a huge difference in your purchase power this summer. Vacation, first home, special project? It’s up to you!
5. Goodwill. For everything else! Now you won’t necessarily end up with cash in your pocket, but you’re helping yourself and your community. The donation will be tax-deductible if you itemize, but make sure to keep your receipts somewhere safe for next Spring, or they’re useless. Also, Goodwill has provided countless jobs in cities and towns around the nation to those who have had the hardest time getting back on their feet. And I certainly put a value on that.
What other ways have you been able to turn your stuff into flexible spending? BY ERIC