Student Loan Budgeting Amy L. Green

Hypothesis Upon the completion of my Associates degree in Paralegal with the anticipated graduation date of August 2017, I will have a total balance owed in my student loans in the amount of $15,048. My interest rate is 4.29%. My monthly payment will be $477 with a payoff date of July 2019. By paying my loans off in 2.5 years instead of 10 years, I will save $4,846.69 in interest charges.

Time to Analyze!

The average salary of a Paralegal in the Rochester, NY area is $57,920 per year. (BLS,2016) This means a Paralegal earns $1,113.85 each week before deductions or $4,826.67 per month. ($57,920 / 52 (weeks) = $1,113.85 per week) ($57,920 / 12 (months) = $4,826.67 per month)

Now we know how much money We will be earning with our new Associates Degree in Paralegal, How do we pay for it? How much will it cost? Can we save money?

Total Cost of Tuition At Bryant & Stratton College (Bryant & Stratton,2016) Associates Degree In Paralegal Cost Item Total Cost_____ $ 8595.00 Cost per Semester @ 5 Semesters $ 42,975.00 $ 700.00 Approximate Cost of Text Books per Semester @ 5 Sem. $ 3,500.00 $ 600.00 Laptop (One-time expense) $ 600.00 $ 35.00 One-Time Registration Fee $ 35.00 __________________ $ 47,110.00

10 Year Loan Amortization Schedule

What Does This Mean? The cost of your degree $47,110. The interest rate of your loan is 4.5% The length of your loan is 10 years. $47,110 x 4.5% (or 0.045) x 10 = $11,478.87 (amount of interest) The total cost you pay is: $47,110 + $11,478.87 = $58,588.87 The total monthly payment is $488.24 per month

That’s a Lot of money for interest! How can I save money? Since a Paralegal earns $4,826.67 a month, that is also a lot of money. The shorter a loan is in length, the less interest you have to pay. This makes the amount of money you owe to be a lot less. Since I could easily afford $488.24 a month with my new income, knowing I survive currently on ¼ or 25% of what I will be earning in the future, if I correctly and consistently budget I can pay off my student loans in 2.5 years. This will save me in interest.

2.5 Year Loan Amortization Schedule

The Advantage of Paying Loans Faster (Lockert, 2015) In the 2.5 year loan repayment the interest costs only $2,787 The monthly payment will be higher, but you will have the extra money to pay it faster. It will be easier to do this because you already live with a limited income, if you can manage 2.5 more years you will be free of college debt, build your credit, and save $8,691.87 in interest alone. The monthly payment of the 2.5 year loan is $ 1663.26 The amount you would have left after paying your loan for the 2.5 year loan would be $3,163.41. This would be very easy to comply with.

Conclusion So in conclusion of my hypothesis, it could be correct, however I had figured in the cost of my own personal loan information after TAP, PELL and other grants and or scholarships had been deducted. It is an agreeable statement to say that when a loan is paid faster, the amount of interest one pays will be much lower.

References Occupational Employment Statistics. (2016, March 30). Retrieved from http://www.bls.gov/oes/current/oes232011.htm#st Official Catalog May 2016. (2016, May). Retrieved from https://www.bryantstratton.edu/pdf/Catalog.pdf Lockert, M. (2015, September 10). Is Paying off Student Loans Early the Right Decision for You? 4 Factors to Help You Decide. Retrieved from https://studentloanhero.com/featured/is-paying-off-student- loans-early-the-right-decision-for-you-4-factors-to-help-you- decide/