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I cannot afford to go back to engineering school

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Re: I cannot afford to go back to engineering school

#131

Post by NamTaf »

dorian-graph wrote: post #125
NamTaf wrote: post #101

The US university loan system is fucked. We have a government-run loan scheme called HECS. You defer your university fees throughout the duration of your studies, apparently no matter how long they last. The programme is not means tested at all, so it is available for every single domestic student studying uni here, no matter what. That loan is then paid back only once you start earning more than a threshold amount o…

Yup, HECS is wonderful. I'm a current engineering student and it's offloaded a major concern from my mind about university. University used to be free in Australia a few decades ago, I believe. I think there IS a limit on how long studies go. When I changed degrees I remember one of the Centrelink mentioning something graduation date and if it's within a range—I should check. Also, they've proposed to remove the HECS…

I thought there was too, but apparently that was removed as of 01/01/12. Quoth a big PDF [1]:

"As of 1 January 2012, there is no limit to the amount of study you can undertake in a CSP. However, it is important to note that some approved providers may have academic probation procedures in place and if you are not progressing satisfactorily in your course, your enrolment may be cancelled."

[1]: http://studyassist.gov.au/sites/StudyAssist/HelpfulResources... (page 14 of the PDF file, page 7 shown in the booklet corner)

Re: I cannot afford to go back to engineering school

#132

Post by lotso »

susi22 wrote: post #114

I consider myself very lucky. I did my undergrad and never struggled with money. My parent never supported me with a dime since they didn't have much. I didn't have any scholarships. I saved up some money from high school and used that for the first year of college, then started working as an co-op. How did I do it? I went to school in Germany. That's also where I'm from. Back then there was no tuition and I only pai…

Students of America do protest. Here are a couple of examples.

UC Student Protests http://www.google.com/#bav=on.2,or.r_qf.&fp=7608e52397923e7c...

Cooper Union Protests http://www.google.com/#bav=on.2,or.r_qf.&fp=7608e52397923e7c...

CUNY Protests http://www.google.com/#bav=on.2,or.r_qf.&fp=7608e52397923e7c...

Rutgers Protests http://www.google.com/webhp?hl=en&tab=ww#bav=on.2,or.r_qf.&f...

Re: I cannot afford to go back to engineering school

#134

Post by originofspecie »

I feel terrible for Ingrid, but I think the end of her article requires a caveat. The financial aid system is a game, and learning the rules can save a lot of money.

Lets assume that your taxable income was 27k.(36 weeks x 40 hours a week x $26 an hour)

You will be in the 15% tax bracket, so the total tax liability on your income would be approximately(i'm assuming only federal income tax) 23k (27000*.85). This is the number that is used on the fasfa. You had mentioned that you suffered from some health issues and incurred medical expenses. Those are deductible, and should reduce your tax bill, as well as the amount of money that colleges should expect for you to spend on education.

Furthermore college 529 plans are something to look at when trying to fund college education. Contributions to these plans are tax free, so it will lessen your tax bill, especially if you don't work while you are in school. Also the 529's in your name are expected to go towards your education at the same rate as your parents income[1] this will help soften the blow of losing the financial aid.

Finally, don't shy away from student loans, especially subsidized federal loans. At around 4%, it is hard to find cheaper money, and wih subsidized loans, the interest on these loans are tax deductible.

At the end of the day, the moral of your story shouldn't be "Don't take paid internships they'll screw you in the end" and instead it should be "when you start get paid a significant salary hire a tax professional to make sure I hold on to as much of my moolah as possible."

You can put up to 5k in a Traditional IRA. Your deposits will be tax deductible, and withdraws for education forgo penalties of withdrawing money before your 59 and 1/2. You will also pay for tax on it at the level of income for the year you take the disbursements, so if you don't work your senior year or make less money it could work out to your favor. The downside of this strategy is that any money you put into the IRA that year will be counted as income. So no gaming the system on this one.

[1]http://www.savingforcollege.com/intro_to_529s/does-a-529-pla...

Re: I cannot afford to go back to engineering school

#135

Post by ryanlchan »

noonespecial wrote: post #50

There should be a way for companies to invest in promising interns, paying some of their tuition costs in exchange for a certain number of years employment with the company afterwards. While this wouldn't work for many fields, it would certainly help in cases like this (and tech in general). It would seem that with as much as companies pay for head-hunters and recruiters (and how much they whine about the lack of qua…

This is actually one of the tuition options that the US armed forces offers students: we pay for your schooling, and you serve in the military for an equal number of years. It's also quite common for your company to pay for business school for a promising employee as well.

Re: I cannot afford to go back to engineering school

#136

Post by cinquemb »

jloughry wrote: post #123
cinquemb wrote: post #43

I have a feeling that there are going to be more and more stories like this. Especially with 60% of Fed student loans non performant, interest rates increasing, and the cost to acquire the piece of paper (and the "college experience") increasing. But Sallie Mae would have you think otherwise when their split goes through on wall st. I have a feeling someone is going to get rich off of CDS backed by securities on stud…

I keep hearing that the US student loan situation is a 'bubble' that is going to burst soon. Fine, but...what will that look like when it happens? I've read Michael Lewis's books---if you haven't, do!---and consequently I think I understand what happened during the mortgage crisis, and before that, M&A fever. But what would a student loan default crisis look like? Lenders can't exactly foreclose on college degrees. W…

Since I mentioned Sallie Mae, I'll set up the situation here (and ignoring the big players who are moving out of private student loans [0]):

-Sallie Mae (SM) completes its corporate split (Fed loans in one company, Private in the other) [1]

-People buy shares of SM, and get paid dividends every quarter (or w/e their terms are).

-As of today, 40% of Federal loans payments are being made, with $118+ billion Fed loans in their portfolio of $1+ Trillion outstanding Fed loans (so SM is probably the most statistically correlated to the total compared to others individual companies) [1][2]

-As interest rates go up on loans [3], and cost of tuition goes up [4], less people will afford to make payments (regardless of if they are in school, dropped out, or un/employed)

-As less people can afford to make payments, the current 40% making payments will go down (as it has untill this point under the current circumstances).

-Less people making payments means less money to go around to pay dividends

-lower dividends on shares means people try to sell shares.

-In attempts to raise capital to pay dividends (and stabilize share value), SM will accept cash/credit in exchange of secured student loans (delaying the issue of not being able to pay dividends due to market forces in response to status quo policies)

-If/When x amount of the secured loans become non performing, SM has to pay in full for the amount disclosed in the CDS deal.

Rinse, wash, repeat…

[0] http://www.americanbanker.com/issues/177_63/us-bank-student-...

[1] http://www.bloomberg.com/news/2013-05-31/sallie-mae-split-ma...

[2] http://www.cbsnews.com/8301-201_162-57597232/study-half-of-$...

[3] http://www.reuters.com/article/2013/07/31/us-usa-studentloan...

[4] http://money.cnn.com/2012/10/24/pf/college/public-college-tu...

Re: I cannot afford to go back to engineering school

#137

Post by DirtyCalvinist »

superuser2 wrote: post #122
bane wrote: post #109

Earlier quoted context omitted.

Declare yourself independent, move out, get a part-time job, remove yourself as a dependent from your parents taxes, etc. etc. Now you are the income source for your own education expenses, and if you don't make that much money should be eligible for all kinds of wonderful tuition assistance programs. If the school asks, just say you have a terrible relationship with your parents and are estranged from them.

They've thought of that. Even emancipated children are not considered financially independent for aid purposes until the age of 25. The only exception is if you can provide documentation of child abuse - police reports, DCF files, etc. Estrangement is not enough. Even a noncustodial parent you've never met is expected to make the same sacrifice as your custodial parent.

At least as of a few years ago, that's not quite true. I went back to school at 24, and because I had earned over 50% of my own income in the past year (100% in my case) and had not been claimed as a dependent on my parents' taxes, I was considered independent.

Re: I cannot afford to go back to engineering school

#138

Post by AlexDanger »

NamTaf wrote: post #101

The US university loan system is fucked. We have a government-run loan scheme called HECS. You defer your university fees throughout the duration of your studies, apparently no matter how long they last. The programme is not means tested at all, so it is available for every single domestic student studying uni here, no matter what. That loan is then paid back only once you start earning more than a threshold amount o…

> The major criticism of the system is that students can just incur this debt then flee the country.

Do you have any stats on how much HECS is lost in this manner? I've not heard of this being a big problem. One of my friends is in this category - he got a PHD scholarship at a top institution in the UK and isnt likely to return to Australia anytime soon. But I'd have thought the overall impact of brain drain (Australia is generally not a good place for top end R&D [1][2]) would have a far greater impact on Australia's future than an unpaid $30k HECS debt.

That all said, HECS is an amazing system and we are so lucky to have it here. I remember as a teenager when I first learnt that you had to pay upfront to go to college in the USA. I thought it was bullshit. What happens if you're poor? It seemed so ridiculously unfair that I thought it must be false. Oh the innocence of youth.

edit: urgh, sorry about the paywall. Go via google and you'll bypass it.

[1]: http://www.theaustralian.com.au/higher-education/universitie...

[2]: http://www.theaustralian.com.au/australian-it/brain-drain-mu...

Re: I cannot afford to go back to engineering school

#139

Post by NamTaf »

AlexDanger wrote: post #138
NamTaf wrote: post #101

The US university loan system is fucked. We have a government-run loan scheme called HECS. You defer your university fees throughout the duration of your studies, apparently no matter how long they last. The programme is not means tested at all, so it is available for every single domestic student studying uni here, no matter what. That loan is then paid back only once you start earning more than a threshold amount o…

> The major criticism of the system is that students can just incur this debt then flee the country. Do you have any stats on how much HECS is lost in this manner? I've not heard of this being a big problem. One of my friends is in this category - he got a PHD scholarship at a top institution in the UK and isnt likely to return to Australia anytime soon. But I'd have thought the overall impact of brain drain (Austral…

I don't, but I'd love to see some if anyone has any. The problem is that because the only interest on the loan is CPI, the HECS system is essentially a fixed pool of money that is temporary loaned to students then paid back, real-dollar for real-dollar. By not paying it back, it's essentially 1 student's volume of study that is lost out of that pool.

I don't know how significant that 'leak rate' is though, so I can't put a figure on whether it's stressing the funds or not.

Re: I cannot afford to go back to engineering school

#140

Post by hga »

originofspecie wrote: post #134

I feel terrible for Ingrid, but I think the end of her article requires a caveat. The financial aid system is a game, and learning the rules can save a lot of money. Lets assume that your taxable income was 27k.(36 weeks x 40 hours a week x $26 an hour) You will be in the 15% tax bracket, so the total tax liability on your income would be approximately(i'm assuming only federal income tax) 23k (27000*.85). This is th…

It's very much not my impression that most people can deduct health expenses. Here from the horse's mouth (http://www.irs.gov/Individuals/2013-changes-to-itemized-dedu...):

"Beginning Jan. 1, 2013, you can claim deductions for medical expenses not covered by your health insurance that exceed 10 percent of your adjusted gross income."

Previously it was 7.5%, but it's nothing if you can't file a Schedule A to itemize, and my very rough understanding is that few who aren't paying down a mortgage can do so.

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