Who Else Wants to Know About Student Loan Pay Off Time?

Are you planning to study abroad by financing the cost using student loan?

In this article, I’ll be revealing some interesting facts about education loans, interest rates, and loan pay-off.

Question: Is it better to get student loans from my bank in India or from the U.S.? 

About 70% of international students in the U.S.A. use their personal and family funds for covering the cost of education. That includes both graduate and undergraduate study.

Here, personal funds refer to money from parents and education loan used by students to pay for the expenses.

Question: How can one use money from student loan?

Student loans are usually issued in the form of a bank draft in the name of a university in India.

Another separate bank draft is issued under the student’s name for personal living expenses.

While studying abroad, you might not get any financial aid or scholarship. Managing all expenses from part time job salary is difficult.

Part-time jobs don’t pay a lot. But you might be able to cover your monthly living expenses with income from part-time jobs.

However, the good news is, you will be able to pay your loan when you get a full-time job within a few years. Usually, entry level jobs in software or engineering pay anywhere from $50,000 to $80,000 per year.

Now, let’s assume that after graduation, you will be still left a balance of around $20,000 in your student loan and that’s usual among those who studied in the U.S. I have seen people who have left much more in student loan debt.

There are so many options available here for repaying student loans. However, an international student’s loan will have different payment options.

In general, your living expenses will increase after you graduate. It will be difficult to share one room with 4 people when you’re already working. When fewer people share in the rent, the monthly living expenses will in turn increase. I was paying around $1,100 per month in Florida (as a student) and around $1,300 per month in North Carolina (when I began working).

Here are a few tips on how to settle your student loan much faster:

  • Watch where your money goes, categorize your expenses and cut on miscellaneous expenses.
  • Avoid spending on luxury items.
  • Make a list when you go to a grocery store and stick to the list when you buy items.
  • Participate in your company’s 401(k) retirement savings plan.
  • Save at least 5% of every pay check for emergency.

Above tips would help you save money and that can be used to repay student loan balances.

Suppose you get $3,000 after tax in your hand, at max you will spend $1,500 per month for living and saving $150 (5%), will give you $1,350 to pay off your student loan.

With this calculation, a student loan can be paid off in 14 months.

But wait, you will definitely need to buy a car to travel to work, unless you are working in metro cities like New York, Boston, etc.

If you buy a car for $20,000, your monthly payment will be around $350 for 5 years. That will delay your student loan repayment period.

But the scenario is different if you earn $80,000 per year, right?

Other articles in Personal Finance Series

10 Comments

  1. shubha on June 18, 2011 at 7:03 AM

    hi hsb,
    I have been reading Hsb posts for quite a period of time and i really appreciate your work.The research u do and present info is really good.I am planning to go to the U.S this fall.Iam a Pharmacy graduate and finding another pharmacy graduate who’s applied for either their M.S or Phd is a really tough job.Discussing about several aspects such as loans,finances and visa issues,job prospects after education,life for a pharmacy graduate,eligibilty to write the pharmacy licensure exam is a problem as consultancies donot have enough info regarding these aspects.However if u could create a common forum or a place where pharmacy graduates could interact and discuss common issues confidence among us will increase.I’d be thankful to u if you could come up with a solution.Thanking u in advance.
    I know that the above article was published a long time ago.However when i was going through this article,a few doubts popped up.I’d be glad if someone could answer my question.The above post mentions that student loan is issued in the form of bank draft which will be issued as two drafts,one for tuition and another for living expenses.However I’m planning to apply for a loan for only half the amount mentioned on my I20.The total amount mentioned on my I20 is 39,000$(20,050 for tuition and the remaining for living expenses).How will the loan amount(actually half the I20 amount)be divided among tuition and living expenses?

    • HSB on June 18, 2011 at 9:52 AM

      Subha – Thanks for your comments. Did you see the Forum at the top of this page? Did you search for Pharmacy groups. Its all there, you have to search and find that.

  2. shubha on June 18, 2011 at 7:03 AM

    hi hsb,
    I have been reading Hsb posts for quite a period of time and i really appreciate your work.The research u do and present info is really good.I am planning to go to the U.S this fall.Iam a Pharmacy graduate and finding another pharmacy graduate who’s applied for either their M.S or Phd is a really tough job.Discussing about several aspects such as loans,finances and visa issues,job prospects after education,life for a pharmacy graduate,eligibilty to write the pharmacy licensure exam is a problem as consultancies donot have enough info regarding these aspects.However if u could create a common forum or a place where pharmacy graduates could interact and discuss common issues confidence among us will increase.I’d be thankful to u if you could come up with a solution.Thanking u in advance.
    I know that the above article was published a long time ago.However when i was going through this article,a few doubts popped up.I’d be glad if someone could answer my question.The above post mentions that student loan is issued in the form of bank draft which will be issued as two drafts,one for tuition and another for living expenses.However I’m planning to apply for a loan for only half the amount mentioned on my I20.The total amount mentioned on my I20 is 39,000$(20,050 for tuition and the remaining for living expenses).How will the loan amount(actually half the I20 amount)be divided among tuition and living expenses?

  3. Saumya Jain on April 9, 2008 at 12:07 AM

    I am planning to go to either USC or UPenn (without scholarship). Please discuss how to manage the finances (student loans , preferred payback options , popular banks for loans etc.). It would be great help if you can provide this information using the estimated amount for both the university.

    Thank you for all your efforts. Your articles provide us all the information in advance and help us to get a better picture of the entire experience of higher education.

  4. Anonymous on October 30, 2007 at 4:30 AM

    I really wonder after seeing this web site,..it was marvellos work ,… i really appreciate ur patience workin to cover every aspect that arises as a doubht to the students who r aspiring to study in us.

  5. Alok N K on October 28, 2007 at 1:28 AM

    Mind BLowing ! Excellent !!! Cheers Man !

  6. Happy Schools on September 30, 2007 at 9:23 AM

    USC, Gatech where tuition fee is $12,000 and Aid is difficult to get. You will find part time job and in USC monthly expenses will be around $700.

    Per year = 24,000 you will have to pay. Similar case with Gatech.

  7. Hari on September 29, 2007 at 3:04 PM

    hey…thanx a lot for the info…
    was just wondering…suppose i get into usc or gtech where the tuition is approx 12000$ per semester..in tat case what would be the scenario of taking a loan..

  8. Happy Schools on September 18, 2007 at 6:13 PM

    🙂 thanks Thiru.. its never too late though!

  9. H.Thirukkumaran on September 18, 2007 at 6:12 PM

    If I had this info in 2002, I would have got my visa easily. I whole heartedly thank you for sagacious advice.

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