I'm paying HOW MUCH!?

School is expensive, dude. I wanted to stay on top of my graduate school loans, so I figured out how much I'll actually be paying in interest each year and I got sticker shock. I still have $27,300 in principal outstanding from Brandeis, down from about $40,000. The loans are much more expensive this time around. The lowest interest rate that the government offers on graduate loans is 6.8%. Some of the loans that I have are subsidized Stafford loans, which means they won't accumulate interest while I'm in school. Some are unsubsidized, which do accumulate interest, but the rate is the same on both. I'll take the money that I get from work and pay off my unsubsidized loans first. All of my undergraduate loans have been automatically deferred, so I freed up $320 a month in cash flow. I sent an email to BC asking if it's possible to pay down the principal on my graduate loans now. I'm still waiting for a response. Even with the extra debt, according to my math, this degree has a positive NPV. Using US census data, I found that the average American in my age bracket (28-34) with a graduate degree, makes $10,000 more a year than someone with just a Bachelor's. So, I took the $20,000 cost (plus interest on the loan) and then discounted $10,000 a year back to the present (up until 2047, when I turn 65) using the 30-year Treasury yield. The present value of the degree would be $150,000 and this number includes my tax benefits (the federal government gives you 20% of your money back up to $2,000 under the lifetime learning credit). Anything with a positive NPV is a good investment, so I made the right decision.

The damage: