I think most of you like to know answer to this question
How long would it take to pay off your student education loan of $50,000 as an international student?
I selected $50,000 for following reasons
- Realistic cost of getting an education in USA from an average cost university
- Rounded figure
- Easy for calculation
Salary and Savings
We can’t calculate the savings without comparing savings with salary and cost of living.
I’m going to take a city with low-cost of living. you can do the math for cities with higher cost of living.
Cost of Living
- Apartment Rent – 2 bed/2 Bath shared by 2 – About $500 per month
- Utilities – $175 max
- Electricity – $25
- Gas – $25
- Internet – $25
- Phone – $50 to $100
- Car – $600 Max
- Car Loan Payment – $400 (if new car)
- Car Insurance – $50 to $100
- Car Gas – $100
- Food and Living – $500 max
- Food – $300 to $500 (depends on your eating habits)
- Living – $200 (personal care, shopping, etc)
If I missed other expenses, add them in the comment.
- Total Expenses – About $1500 per month
This is rough estimate and cost vary depending on individual.
Salary
For an entry level engineer where cost if living is cheap, you can expect salary to be around $50,000 per year.
With $50,000 per year, you can expect take home salary of $3000 per month.
- Savings – $3000 – $1500 – $1500
- Savings per year – $1500 * 12 = $18,000
- Number of years to pay $50,000 = $50,000/$180,00 = 2.77 Years
If your take home pay decreases or expenses increases, it will take longer than 2.77 years to pay the student loan.
I haven’t taken loan interest payment into account.
Adding loan interest payment, you can add another 1 to 2 years.
So, plan to pay the loan within 5 years.
Comments?
What do you think about this calculation?
Can you share your savings, loan amount and salary. We can have an interesting discussion.
About Raghuram Sukumar
Yes that’s a Bitter truth,how ever try to get your masters from top indian B-schools that makes you fit in to indian market while its gonna be biggest economy.Better to spend your 20 lacs (obvious don+fees) behind indian masters than US to just feed their job less beggars and helping US economy grow.Try to get place in good reputed companies cause once indian economy goona boom there’s no chances to choose move back home(india) for NRI’ss especially amrigoindians,,,cause they could not find better suitable job in india according to theire culture where indian market its totally gonna different for them kinda treating and working culture etc….
Florida state university,MS,EC.(2010)
owns family business(GUj)
Raviraj sinh.
I was thinking to take L1 transfer but after reading this post I keenly recommend my self to continue work for consulting at 8lcs package in india as well recommend others to continue work in indian MNC as indian economy going to be boom by 2020.
Thanx raghukumar for sharing this ,was always wondering how could I stand up economically different after being to stats.
so actually after 5 yrs one is going earn profit…
Your Salary totally depends on your own capability … I am in USC people here grab average salary of “$90k+ upto $120k or more if your work place is in California” .
9% State Tax
saves a lot ..
33% Standard Tax
your living expense $2000 in Los Angeles with car good apartment 2 sharing 2 bed and full masti…. COOK AT HOME
Calculate the years ..
Hello bikram,
Actually i am also keen to study in USC ….it is my dream university…. but how can i know whether i am eligible to apply or not….. also what are the profile specifications and academic qualifaications to get an admission in USC…
pls reply….
There is no hard and fast rule. It is of course good to have a good GRE score (TOEFL score doesn’t really matter) – that’s the first thing they see. But, don’t think that is the only criteria for selection. I know many who got into UW-Madison without GRE at all — the reason is, they had research publications or had considerable GPA from reputed international universities (IITs or better). Also, if there is only a small difference in GRE scores of two candidates, they disregard GRE and look for other qualifications to compare. In short, you need something to show off yourselves as a strong candidate for studying there.
So it would mean that It would take approx 5 years from my date of joining ms (if all goes well) that I will be doing any real savings for myself. So if I work for the same period in india for an average salary of 5.5 lacs (which most software professionals are likely to get in spite of the current situations, or in my case at the least) and say an average of 1.5 lacs you would end up having a savings of around 8 lacs (invest the original amount) but without a ms degree. So which would be the best? Your opinions please.
Hie Prasanth, In my point of view you could go for the MS degree and ear money Faster than sticking around here! (No offense to all the honorable working families of India)
Hi frnds , I heard there will be 13% tax deduction for those who are working on OPT & 33% for those who are working on H1. Is this correct. Plz clear my doubt.
what about medical Insurance , Car Maintenance, House Maintenance costs I Heard that they cost a lot?
50 years as the us economy is bankrupt now!
Oh … God ….
meny comments ..
After reading all this comments my mind says
“oh god pople are not happy about there salary and or take home salary”
I was always thinking about what people will feel when they saw ‘$5000′ ‘$4500′ on there salary slip. This is the thin line between imagination and reality.
But I think this is not so happy experience.
This is the message for people who thinks oh US is land to make money . My dear friends this is not the case.If we calculate 2 yr saving we are not far away from people in india who are making 50,000 to 60,000 per month(I am talking about salary not take home).
Plz guide me;
I want to study as a ms student,can I receive a 50000$ loan from my university?
Because I have money problems and I don’t have enough money to pay my tuition and expenses.
Wouldn’t there be taxes??..I must mention that I am not sure about the US system of tax deduction…
Sorry..my bad..did not realize that you have taken into account only the take home salary..:)!!
Hey
what about income taxes one has to pay in USA ? Please let us know about it
has the job situation increased in america?coz i heard dat many of the passed outs are still searching for jobs….in that case how much practical is $50000/annum salary?
Also what about if a person decides to do a MS in Biological Sciences. What jobs are possible and what Annual Salaries and when?
What about Social Security Tax, Federal Tax, State Tax, Long weekend trips, Visits to India every year or once in two years, Medical Insurance….
Thats why i said Take Home Pay. Which includes FICA, Taxes, Insurance. India Trips, Weekends trips, thanksgiving shopping spree is not included in this calculations. i haven’t included cost to pay for a BMW as well
LOL well said raghu!! BMW hah!!
We also need to account in other expenses like trips to India, parents visit, relocation expenses (if consultants), purchase of furniture and new gadgets. Important thing is to be very disciplined in terms of loan repayment. I am aware of situations when we tend to spend more on getting a job.
I think takehome salary totally depends on the place you live. I live in California, my salary is $85000/year but i take home only 2250 (approx. after all the tax deductions) every bi-weekly. So my my take home will be between (4500-4700) everymonth.
So with $50000 i expect the takehome would be less than 3000/month.
You are right. Lets folkd be happy to see take home of 3k with 4k salary without any 401k contributions and lets say they live in Florida where there is no State Tax.
Salary increases over 2.77 years and any bonus attached based on performance would negate the interest rate would be a good assumption to make. Simple and straightforward calculation!
That is correct. I didn’t take salary increase into account. thanks.
I dont think there would be any drastic changes in the salary unless you are promoted.
Its just my thought after working here for couple of years.
Salary increase ??
How many times ,for 2.7 years only 2 times
I dont think in USA after getting good salary there is a hope for good hike .
It not like India.
Salary jump is US mostly comes from job change. Within same company, don’t expect ore than 5% pr year.
hey good point