“You’re going to be so poor in your 20′s but you’re going to be SO RICH in your 30′s”- words of wisdom from my inspirational PhD mentors.

I have a lot on my mind these days. I’m still relatively unemployed…or better put I’m just not making as much money as I would like to be making. You know, enough money to live the way I was living before my life got turned upside-down. As it turns out, the job situation (or lack thereof) was meant to be. I’ve had time to think about me, to find a plan and to go with it.

Unfortunately, my plan is very expensive. I always expected to find an amazing company that would fund my career as a graduate student and also be flexible with my hours. (Oh..and also pay me an amazing salary so that I could continue my life of semi-luxury.) Well…those jobs are all taken.

With all of the good jobs being taken, I am on my own when it comes to funding my academic career (and the living expenses that come with focusing on school rather than focusing on work). Seeing as how money really doesn’t grow on trees (especially when it comes to graduate school when no one just gives you money anymore the way they did when you were an undergraduate student), I’m going to have to borrow that money from somewhere. So I decided to do a little research on exactly where that money is going to come from.

Subsidized Loans
According to StaffordLoan.com a subsidized loan typically has a low interest rate (under 6%). You have no payments while you are enrolled full or part-time in school. (This means the government pays the interest on your loan while you are in school. Only once you finish school and your deferment is over do you start paying interest.) The amount of the loan is dependent on FAFSA (which takes into account your income, any family contributions and some other not-so-fun-stuff). Receiving the loan is as easy as logging into whatever program your university uses for financial aid and clicking accept. Funny how easy it is to accept and how hard it is to pay it back!

Unsubsidized Loans
These are a bit more daunting, because although you don’t have to make payments while you’re in school, eventually you’re going to have to pay all of that interest. The interested is added to your principal balance, should you choose not to pay it while you’re in school, which means you just end up paying even more interest. For example if you borrow $1000 with an interest rate of 50% (that’s insane, I know, but just focus on the math), at the end of the year you will owe $1500. The interest rate of 50% then applies to the $1500, rather than the $1000 that you originally borrowed. Which means the next year you would owe $2250, but you still only got $1000 worth of school/food/rent.  To top it all off, the interest rates on these not-so-attractive unsubsidized loans is higher than the subsidized loans, making them that much more unattractive. Naturally, you would want to have subsidized loans over unsubsidized loans, but the government is pretty smart, you see. They offer you A LOT more money in unsubsidized loans than they do in subsidized loans. (Side note: accepting your unsubsidized loans is just as easy as accepting your subsidized loans, but even harder to pay back.)

Scholarships
While it’s not easy to find scholarships for graduate students and it can be time-consuming, it may be worth it for those of us who are not that comfortable with debt. My first two semesters of school will actually be funded by a scholarship I was awarded from College Net. Students (both graduate and undergraduate) are eligible for a College Net scholarship once a year and a scholarship is awarded every week. As I apply for scholarships I will keep a list here.

Mom and Pop Loans
These are my personal favorite, because you may be able to get away with paying no interest at all on them. However, it requires that your parents be in a position to loan you a lot of money on a regular basis and it also requires you to swallow your pride and ask for it. I haven’t gotten to this point yet. Mom…Dad…if you’re reading this, don’t be surprised if you add Loans Specialist to your many jobs over the next couple of years.

I hope you’ve enjoyed my kind-of-boring-but-as-interesting-as-I-could-make-it summary of how to get poor and stay poor during graduate school.