Grace is on track to pay off her loan! She received her first job as a UX Designer with a salary of $72,00011. Let’s take a look at how her decisions worked out comparatively
The University of Minnesota
4 year Bachelor's degree
$60,00015
$23,000
Subsidized federal student loans
Standard repayment plan (10 yr)
$219/month
$23,000
Subsidized federal student loans
Income-driven repayment plan
$600/month
$60,000
Private student loans
10 year payment plan
$612/month
$60,000
Private student loans
20 year payment plan
$368/month
Minneapolis College
2 year Associate's degree
$12,00015
$12,000
Subsidized federal student loans
Standard repayment plan (10 yr)
$114/month
$12,000
Subsidized federal student loans
Income-driven repayment plan
$600/month
$12,000
Private student loans
10 year payment plan
$122/month
$12,000
Private student loans
20 year payment plan
$73/month
Prime Digital Academy
18 week bootcamp certification
$16,00017
Interest-only payments
3 year payment plan
$91/month (18 weeks)
$514.90/month
Interest-only payments
5 year payment plan
$115.50/month (18 weeks)
$342.66/month
Defer all payments
3 year payment plan
$539.92/month
Defer all payments
5 year payment plan
$364.40/month
Any of these loan terms paired with Grace’s projected salary at her first job keep her at or under 10% debt to income ratio, well below the recommended 20% threshold12.
While bootcamps are more inclusive academically and would get Grace into the workforce the fastest, if you don’t have the funds you have to take out personal loans which are harder to get approved for and have higher interest rates.
We really want Grace to be able to benefit from subsidized federal student loans. And while she can qualify for them with University of Minnesota degree program, it doesn’t cover the entire tuition amount and delays her being able to get into the workforce. Minneapolis College offers a faster degree program and allows Grace to take out subsizidied federal student loans. Federal student loans are the only way to get Public Service Loan Forgiveness10.