Are private school loans a good option for me and my professional master's program? Any other suggestions?
September 13, 2012 11:56 AM   Subscribe

Are private school loans a good option for me and my professional master's program? Any other suggestions?


I’m looking for some advice and input regarding private student loans for a professional masters degree. The program is a Master’s in Industrial/Organizational Psychology offered through Colorado State University online and designed for professional working full time. I am not formally enrolled in the program as of yet but they offer admission to several professional certificate programs. I completed The Organizational Design certification and have enrolled in The Performance Management certificate.

This program is extremely applicable to career development and advancement. I am very impressed so far. It’s basically a manual for working in consulting or HR.

My background and story is that I have not worked in 9 months by my own volition and have been doing some travelling abroad. My resume is strong. I have managed the development of several major consumer electronics brands throughout South America. I currently have a line and inside track on two job opportunities and have been delaying my search waiting for one of these to finally open up. Also, my current plan is to focus on completing all the GRE requirements and an undergrad prerequisite while also really getting my Spanish to a really high level.

In the mean time I have been living off my savings but they have dwindled quite a bit and I want to maintain some backup funds to be safe.

I would like to take out some loans as this program is not horribly expensive but is not exactly cheap. I need to take 26 more credits at a cost of about $600 a credit. The total remaining tab should be about $16,000 and I have put 3 of the classes on a credit card. So including this debt and the loans I will need about $26,000 to pay the current balance and future courses. I am not terribly concerned about making future payments. I am not just coming out of school with no experience and I have made pretty decent money in my last job. $60-80,000 annually. Part of the reason I resigned was that this is a little low for the position. So I should be able to pay off the loans pretty quickly and probably won’t need the loans for more than the next few semesters. Also my credit is impeccable, about 800.

I don’t have any car payments (or a car), Wells Fargo holds my mortgage which is being covered by renting it out. The best part is I have the opportunity to live in a South American country with a relatively low cost of living and can even move to another country that is even more affordable. I can live here pretty comfortable on about $35,000 annually. I maintain an address and residency through my home in CO.

I got approved for $20,000 with my FAFSA, but I can’t get any federal loans as without formal admission I don’t qualify for it. So I am looking at the private options. Here are the two I have been looking at.

Sallie Mae – They offer a standard fixed rate of 7.9% and but can go as low as 5.74%. I know there have been some complaints about this company but several years ago.

Wells Fargo – They offer fixed rates as low as 6.65%. They also hold my mortgage and this might be an advantage. They offered deferred payment options but only offer to pay up to the cost of the tuition not any other living expenses.

I don’t think I want a variable interest loan.

Is it a good idea to apply for both and see which provides the best rate?

Is there somewhere else I should be looking?

Is there anything else I am not considering?

Any other thoughts or input?

Thanks everybody. I appreciate it.
posted by Che boludo! to Education (20 answers total)
Before getting all psyched up about it, contact some higher level HR folks and ask them if the degree and the school, carries any weight at all.

What about getting a similar degree where you are now, or moving back to the US and enrolling in an actual campus.

In reviewing the program so much of what is listed there is actually OTJ training in many HR departments.

I'm torn about CSU because it's a 'meh' state school and the on-line program may have a stigma attached to it. The admissions process isn't exceptionally rigorous.

If you got into Wharton or Harvard or something like that, I can see that down the road that the investment might pay off. But you had a decent paying job without the degree. So how much more do you think you'll make over your lifetime to justify the expense?

Perhaps some hiring managers can chime in.

I get the impression that you're using this program as a way to justify hanging around in South America, rather than as a tool for advancement.

Based upon what you've written, I wouldn't do the program unless you were employed and under a Tuition Aid Program or you could pay cash for it. I MOST CERTAINLY wouldn't take out loans for it.
posted by Ruthless Bunny at 12:10 PM on September 13, 2012 [1 favorite]

Response by poster: Ruthless Bunny - The advantage of the online piece is that it does allow me to work internationally while pursuing the degree. Ideally my next job should allow me ample time to hang around in South America. Anyway what's so wrong with that?

I'm fascinated by human behavior and feel that the occupational/industrial would make good use of this interest as well as satisfy intellectual curiosity.

My area of focus is in cross-cultural relations and working style differences from region to region. Being abroad is pretty helpful along these lines.

It may not be the greatest school in the world but it's decent. It all seems to fit to me.
posted by Che boludo! at 12:21 PM on September 13, 2012

Yeah, I'm of the understanding that a Masters in Psych (vs. a doctorate) is generally not considered to be a degree that gets you places. Add to that that it is from Colorado State and from an online program at Colorado State, and I'm thinking it isn't a good use of money (or loans). Often those programs are for people who just need an extra degree so they can get a promotion, honestly.

I would look into the very few online doctoral programs in psych to maximize your

If you are doing this solely for the educational benefits (which I am fully supportive of), I would try to go to a better school and/or get the degree in the international location you plan to reside in.
posted by superfille at 12:28 PM on September 13, 2012

I got approved for $20,000 with my FAFSA, but I can’t get any federal loans as without formal admission I don’t qualify for it.

So why can't you wait for the formal admission?
posted by Jahaza at 12:28 PM on September 13, 2012

meant to say, "maximize the value of your investment."
posted by superfille at 12:29 PM on September 13, 2012

Response by poster: And a similar degree where I am now? I'm not sure the University of Buenos Aires caries as much weight as CSU online. Also, there is only one school in the south offering this type of degree and it's undergrad.
posted by Che boludo! at 12:29 PM on September 13, 2012

This is the sort of program that is meant to be paid for by an employer while you are working. You'd probably be better off getting a job in the field with an employer that has a tuition-reimbursement benefit, and then get the degree.
posted by deanc at 12:30 PM on September 13, 2012 [2 favorites]

Response by poster: It doesn't seem like such a bad investment considering some people spend $40-50,000 or more on a luxury car. Education vs. fancy automobile?
posted by Che boludo! at 12:35 PM on September 13, 2012

It doesn't seem like such a bad investment considering some people spend $40-50,000 or more on a luxury car. Education vs. fancy automobile?

Most of the people who spend $40k on fancy cars are already making six figures. There are more than fifty million of these people in the US, so there are plenty going around. One can argue that this is an unwise thing to spend money on, but they do, in fact, have the money to spend most of the time.

But cars aren't investments. They're things you spend money on. Some because you have to, some because you want to. But either way, you have a car, which if nothing else will serve as a vehicle to get you from place to place, and which you can sell for some significant portion of its value if you decide to.

Advanced degrees, on the other hand, not only come with no guarantee of increased earning potential but can't be sold back. You take out a student loan, your only option is to repay it.

Unless you know--not believe, not suspect, but know--that an advanced degree will improve your earning potential, you should not borrow any money to get one. I did, and it kind of worked out for me, but if it weren't for my SO's income I'd be paying these loans off until I'm 45. And I was lucky enough to get a job. Plenty of my classmates weren't.
posted by valkyryn at 12:43 PM on September 13, 2012 [2 favorites]

Just wanted to say that given the quality of what's offered, that this program is not an investment, and it may barely qualify as education.

I have an advanced degree (MBA) that my employer paid for 100%. I obtained this degree from a second tier school (about on par with CSU) and while I learned some interesting stuff, it's not at all marketable.

Sure, employers like to see it on the resume, but it opens ZERO doors in a job search. All it does is make a hiring manager feel about .005% better about picking me. It doesn't tip the scales between me and another candidate. It impresses NO ONE.

The consensus is that it is a bad idea to go into debt for this degree, I think most of us would agree that it's a bad idea to go into debt for ANY degree.

You seem to be trying to convince us that, no, really, it's a good idea.

The Hive Mind has spoken, it's up to you to either heed the solid advice given, or to continue on your merry path.

As for living in South America. Absolutely nothing wrong with that. If you have a job and/or money to support yourself. So many people, when their job prospects dry up, believe that another degree, some classes or living on student loan money is an AWESOME idea. I disagree.
posted by Ruthless Bunny at 12:56 PM on September 13, 2012 [3 favorites]

This is education as consumption, not human capital investment.

There is absolutely nothing wrong with consumption. It's what makes life worth living. And experiences are generally more satisfactory than tangible goods.

But as consumption, you should not be going into serious debt. You should not be delaying your prime working years. You should definitely not be taking out loans to pay for any living expenses. All the typical reasons people use to justify educational debt don't apply.
posted by politikitty at 1:00 PM on September 13, 2012 [1 favorite]

Response by poster: Trust me Ruthless Bunny, I'm listening and I'm not trying to convince anybody. I generally almost always play the devil's advocate. This is valuable advice and I wouldn't be asking about it if I didn't have my doubts already or want the advice.
posted by Che boludo! at 1:01 PM on September 13, 2012

Response by poster: The question is "is this a good idea." after all.

I am surprised about the responses that this program seems of little value.
posted by Che boludo! at 1:06 PM on September 13, 2012

When I applied for private student loans, I had to prove that I was formally admitted and enrolled before I could receive any money. If you have that issue with federal loans then I don't really see how it also won't be a problem for the private student loans, unless things have changed significantly.

If you are insistent on doing this program, I would absolutely get your official enrollment (or whatever it is you need) in order to get federal aid before you seek aid anywhere else. The fact that you qualified for aid means you absolutely should take advantage of the benefits that federal student loans hold over private loans.
posted by joan_holloway at 1:07 PM on September 13, 2012 [1 favorite]

I generally almost always play the devil's advocate.

Your first lesson in Organizational Psychology should be that nobody likes the person that does that.

If you were raising the "education vs. fancy automobile" question because you thought it was a clever example to play devil's advocate over so that everyone else could clarify their reasoning, you should in fact realize that raising that question just made all the readers think, "this guy has no idea what he's doing and is WAY out of his depth when it comes to making important life decisions."

If you're interested in an academic topic, find a fully-funded master's program where you will be doing original research and writing a thesis. If you want a "career development" program, enroll in a certificate program (as you have done) or get a job where your employer will pay (at least most of) the tuition for you.
posted by deanc at 1:08 PM on September 13, 2012

Mod note: Che boludo!, this is not the place to have a debate. If you need to clarify your question, that's fine, but playing devil's advocate is really not within the bounds of Ask Metafilter.
posted by restless_nomad (staff) at 1:16 PM on September 13, 2012

Response by poster: deanc - I'm not trying to play the devil's advocate just for the sake of arguing. I'm just raising some additional questions is all.
posted by Che boludo! at 1:17 PM on September 13, 2012

Response by poster: I think I may have misstated the devil's advocate thing. There is no debate, really.
posted by Che boludo! at 1:18 PM on September 13, 2012

You're going about it backwards. First find some people who do what you want to do -- and ask them what degrees and experiences have helped their career. Also find some people who hire people who do what you want to do, and ask them what they are looking for in candidates. Do NOT rely on CSU's information about how great and useful their program is.
posted by Wordwoman at 1:19 PM on September 13, 2012 [5 favorites]

It's not clear to me why you can't get federal loans? They are generally considered better. If the program is requiring that you pay before you can be enrolled, you should be suspicious.
posted by yarly at 1:20 PM on September 13, 2012

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