November 11, 2014

All I could do if I didn't have student loans


It is no secret that I have student loan debt. And while it is the bane of my existence, I don't have it as bad as most. You see, both my undergraduate work and Adam's was covered entirely by scholarships. That means that we both walked away with 4-year degrees that didn't cost us a penny. I wasn't as lucky with law school.

In law school, I was careful to only take out the money I needed. I paid for tuition, housing, and other necessities. After the first year, when I was finally allowed by school rules to work again, I began working the maximum 20 hours a week each and every semester to make ends meet. I didn't want to take out a penny more than I needed. After three years, when interest was compounded and added to my total, I walked away a little over $63,500 in debt. 
It was crushing. I worked so hard to do everything right and I still owed that much money. I resolved myself to save and put as much towards my debt as I could. I reasoned that it was like owning a luxury car and surely, I could pay that off right?

Wrong. For the last year, I've sent Great Lakes a payment of over $500 each month. That payment became crushing to our monthly budget at one point, so I sought a reduction based off my income. I received it and now pay a little over $400 each month. And despite shelling out nearly $5,500 in the past year, my balance on my law school student loans are.... wait for it, $62,472.29. That's right! In the past year of on-time payments, I've managed to pay off only $1,100 of the principle of this debt. 

Does anyone else think this is CRAZY!?!! (Spoiler, I'm not alone. The Federal Government stands to make over $113 Billion (yes, Billion with a B) on Graduate students in the next 10 years! )

How in the world can our generation "stimulate" the economy when our student loans have us by the balls? I thought it would be fun to put together a list of all the things I could do or buy if I didn't have Uncle Sam demanding repayment at over 6% interest:

1. Adam could have a new car. You know, instead of driving a car that is almost 15 years old and has no air conditioner. Without my monthly student loan payment, Adam could actually have a basic, 4-door sedan. How great that would be!?

2. We could have taken a summer vacation. The last vacation we had was our honeymoon thanks, in part, to my crushing student loans. So thanks Feds. I mean, I'd prefer to stimulate the economy by traveling, seeing the country, supporting the tourism industry and all that. But I guess you had other plans for me and my couch all summer. 

3. We might actually build the pantry we need. While a pantry space was on our "must-have" list before we started the remodel on our new house, it had to be scrapped for budget issues. We swore we'd get back around it to this year, but honestly, we haven't had the cash flow. 

4. We wouldn't have a second-hand Christmas tree. Oh yes, this year we're borrowing a Christmas tree from my mom second hand. I've always had the dream of buying a beautiful, tall artificial tree for our first home and using it forever. But well, that's not possible thanks to monthly payments on a debt that never goes away. So for the foreseeable future, we will be borrowing one of my mom's older trees with missing lights and branches. Cheers! 

5. We could save for retirement more. As it is, Adam and I live pretty frugally. We spend as little as possible (most months) and then stick any excess back into a savings account. We'd like to have at least $10,000 stuck back at all times in case of any major emergencies (we're not there yet...). However, if we weren't paying egregious amounts of interest to the Feds each month, we could also throw ourselves into saving for retirement. We could make sure that we both aren't working well into our seventies.... but no. Apparently, that's too much to ask for. 

I don't normally like blog posts to come across as bitter as this one. But you know, this topic really ticks me off. I know that I'm super lucky to have come out of school to find a job at all, much less one that pays a decent wage and provides good benefits. Still, it is really hard to get past the fact that so much money is being made off an investment I took in myself. To me, education isn't a privilege. It's a right. And presumably, my higher education status would mean that I should have a lot to offer our society. But alas, all I'll be offering for the next 10-20 years is interest earned while I just manage to stay afloat. And friends, that's a little troubling to me.

So, is your student debt crushing you?

34 comments :

  1. I'm terrified of student loans. I don't have a super ton, but unless I get scholarships/a book deal, that might change after graduate school. Hopefully that won't be the case!

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  2. That is so crazy to hear it in the numbers like that, wow. To pay that much money and only be paying on the interest, basically. I can definitely understand feeling crushed! I only have a bachelor's degree and I was another scholarship kid (scholarships are awesome, aren't they?) so I thankfully didn't have any debt to deal with. It's probably because I grew up in a developing nation that I don't actually see higher education as a basic human right--to me, it's a huge privilege. I'm so glad I got the privilege of an education, it's one that's denied to a huge portion of the population of the world who don't even get a high school education (here in China, high school is not government-mandated, you only get to go if you get a high enough score on entrance exams AND if your family puts together the money!)
    Angel's nursing degree wasn't 100% covered by scholarships, so he came out of school about 25K in debt. He had his own strategy for tackling it, which worked perfectly for him: he moved in with his parents (honestly, they'd prefer it if he still lived with them, they are really big on multi-generational families living together in his culture), got a job, and because there was a nurse shortage in TX he could work two days of overtime every week, no problem. He paid off the entire 25K in a year and a half so that we could get married (about two weeks after his debt was done). He even says he just "got lucky" because he got a good job and was actually able to pay what he owed. Debt is life-sucking, for sure. The great thing about the medical field and shift work is that overtime pay is sweet--a lot of fields don't have a benefit like that!
    So many of my friends have debt that they say they won't even have paid off when they're own children are in college, and that's heartbreaking. Especially for my friends who didn't finish their degrees and are now working in grocery stores or in construction or as janitors--those aren't bad jobs, but they would be a lot more viable without thousands of dollars of debt hanging over your head! My parents basically advised me and my siblings not to go to college if we couldn't pay for it, which is interesting parental advice. My little brother and sister are right now going through college the slow way, just working enough at minimum wage jobs to pay for as much tuition as they can afford at a time. They just got their associates degrees and I know it annoys my sister that she can't complete her bachelor's as fast as she wants to because she's working so much, but I'm sure that later on in life she'll be glad she doesn't have debt. Given the problem of paying for college, what would your advice to high school and college students be, after your experience tackling this?

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  3. Yes! Six years of private college and I have $115k in loans (and that's after significant scholarships)! I'm a government employee and I'm on IBR which still runs me $421/month and will only go up because I got two small raises this past year. I'm only paying the minimum because I'm trying for loan forgiveness after 120 payments - the best incentive for working in government with a masters degree. Only 96 more payments to go... If I didn't have to pay $421 a month, I could have a much nicer house, put money in my savings, and afford to fly home to see family.

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  4. I'm actually having the same sort of moment. Law school is a jerk :) I actually am on track to have mine paid off in about a year (my entire after-tax salary goes to student loan payments, no joke), which feels good, but I can't help thinking "so I've sacrificed EVERYTHING for years, and for what?" I mean, I know what, but it seems so anti-climactic, you know?

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  5. Dude. My loans aren't as bad as yours but every month as I make out that check and send it off I curse the heavens. Student loans are the most annoying bill to pay, especially when you're barely making any money!!

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  6. We're in the same boat. Together we pay just about $1400 a month in student loans. Do you know what kind of house you can afford for that?! We obviously wouldn't be living in an 850 square foot apartment. Lol.

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  7. Oh yes, I feel you. It's such a burden. I graduated from college 10 years ago and still have a heavy $19,000 of debt...that was after significant scholarships at private college. Ugh. Next year we have the joy of adding on Ryan's law school loans too...we are EXTREMELY frugal but it's so hard to not get bitter when I see people younger than us going on amazing vacations and buying houses and going out all the time....I know it's wrong to compare, but I'm only human. I've worked hard for the past 10 years and have always paid more than the minimum on time and there just seems to be no reward. We have savings set aside to help start paying down the law school loans once they start, but I just feel like we're going to be poor forever. So if I didn't have student loans I'd travel more and save up for a down payment on a house.

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  8. Oh man, student loan debt is the worse. I totally feel you. Between hubby and me, we pay $900 a month to student loans. SO frustrating. And I don't know if you have the same trouble we do, but they keep screwing up our payment plan and we get told a different answer every SINGLE time we call them. It is beyond frustrating. It's like, "hey, you owe us all this money and we're going to get it back, but we're going to make it virtually impossible for you to pay it." UGH.

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  9. Oh girl- I can't even handle our student loans! Mine alone aren't bad, but Doug's are enough to make me choke. Making those payments every month just makes me angry because I feel like our money is just being thrown away!

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  10. I also have great lakes (oh the bloggy connections). Student debt is so frustrating, and I definitely worry about it since I will have to pay all mine off while still on a single income. Sometimes I feel like it's a catch-22, "damned if you do, damned if you don't." We're supposed to get this education, and then we have to spend so much time working to try and pay it off that for a time we're in more debt than if we hadn't gone at all.

    No clear answers, but this post was nice to know that I'm not alone!!

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  11. My husband is a second-year medical resident, so boy do I feel your pain. His mom paid for his undergrad and I am unbelievably thankful for that, but he came out of medical school with $285,000 in debt. (I finagled my undergrad loans into my mortgage when I bought my house, so the debt is still there, it's just not an extra payment. Whew!) His application for IBR has gotten screwed up twice now so we're still making the full payments of $3400 every month--aka his ENTIRE paycheck. Frugal doesn't even begin to describe our lifestyle.
    I think it's completely fair to be bitter and ticked off about the topic. I also appreciate how real this post is...it can be so frustrating to live in this world when everyone seems to have the newest and greatest and most expensive and I'm over here scrimping and saving and doing without. It is nice to be reminded we're not the only ones.

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  12. We feel your pain! I have luckily lowered mine a good little bit (from $60k to $47), but that is pretty much ignored by the fact that my husband is starting college now & we have to take out more loans so he can go. And because I make "too much" (which is a joke because I don't see how 2 people can survive on my salary alone), he isn't eligible for quite a few grants.

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  13. I'm right there with you, after I finish grad school I'll be at about $100k. I was NOT smart when I started school, I was so eager to get away from home that instead of taking my gen eds for a year, or even while I was in high school (I could have easily taken a full course load my second semester of HS) I took all my classes at a very expensive private art school. I consistently took out the max each time, instead of taking out only what I needed for school. I could have easily saved about 30k+ in loans if I would have only taken out the absolute minimum and just worked more and lived off campus. I haven't started paying them off yet, but when I do my payments will be about $1500 a month. Luckily I can pay towards each loan individually so my plan is to try to knock off some of the small ones ($2500-3500) first so that number is drastically lower. And I hate to saddle my fiance (who makes considerably more than me) with my stupid choices as a teen/young adult. Its completely irritating that they make these payments so outrageous.

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  14. That (debt) is the primary reason I ditched plans of law school or a Ph.D. after grad school ... along with burnout that was on the near horizon. I was lucky and had the vast majority of my bachelor's degree covered with scholarships - the rest was from savings that my parents set back during childhood and $6k in loans that I took out to graduate a year early. Grad school - I lucked into working for a state agency that netted me a small tuition discount as well as attending during a time period when tuition was the same for grad and undergrad students. I borrowed one semester's worth of subsidized student loans to catch up bills/car repairs/part of the first year's worth of tuition, then paid the rest of the way out of my own pocket. I was able to work full time and go part time at night -- so I'd charge that semester's tuition on my credit card and pay it off by the end of the semester, using my 'extra' income from proctoring/administering college entrance exams on weekends. It took a few years after grad school to pay off the 10k I had, but I was lucky that I could consolidate before graduating and locked in at 2.87%. The one thing that helped me was paying interest every quarter starting with those undergrad loans ... so I didn't have it capitalizing on top of the principal ... and then putting every extra penny I had once I had better paying FT jobs.

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  15. Yes! I feel ya. I didn't have quite as much debt as you, but I got really lucky and married someone who bought a condo before we even met. So we ended up refinancing the condo and taking out some extra money to pay off my student loans. The interest on the condo payment was WAY lower then the interest on my student loans, so we were actually "saving" money in the long run, crazy right?!

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    1. Plus, we made to much together to even be able to write off the student loans, but we were able to write off the mortgage, so that was a win too...I guess. Student loans suck.

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  16. I feel you guys. I'm currently sitting at $36,000 worth of undergrad debt. It might not sound bad, but when you factor in the fact that I need a Doctorate degree to do anything in my field (at the low low cost of $30k/yr for 4 more years), I'm gonna be in debt forever. Hopefully Kris gets a govt job where he'll get loan forgiveness because that's our only hope of staying afloat. I just don't understand why people who are trying to better themselves and our country have to sell their soul to do it. Hang in there, Kate!

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  17. I get so angry when I make that payment I can barely afford to pay. LIke super angry.

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  18. I am so not looking forward to my student loan payments when I'm done with school. Ugh.

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  19. My husband's student loan debt is crushing him too, and he almost defaulted on it to the point they would start garnishing his wages because he often made late payments simply because he literally could not afford all his bills so he had to stagger them, not to mention his old job left him grossly underpaid. Not that he finally has a better job paying him what is fair, he's getting back on track making on-time payments, but unless we fall into some streak of luck, he'll be paying those off for 30 more years. For a degree he doesn't even use for his work. At a college where he didn't earn a great education. But that's me holding some resentment toward his alma mater, a hoity toity private and hugely overpriced college - I went there for 2 years and transferred to the state school across the street where I paid 75% less and got a far better education. He thought transferring seemed like too much work and didn't follow me, but now he's kicking himself for it. I'm thankful that my own loans were paid off only 5 years after I finished undergrad, thanks to the low tuition at my state college and the few scholarships I got and some help from my parents. My husband didn't get any help from anyone, poor guy.

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  20. I feel the same way. I made payments all of last year and ended up paying off one of my loans; however, I actually now owe MORE than what I initially owed because of all of the interest. Not being able to find a teaching job right away also did not help matters, since I only made $70/day a day as a sub or $62 something after taxes.

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  21. This post speaks to my soul. Like... deeply. Going to a private Lutheran school for undergrad is EXPENSIVE and I feel like I've barely made a dent in my debt. Grad school? It's not even a consideration right now. Not that I have any idea what I would study anyway...

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  22. I graduated with twice as much as you did and without a Big Firm Job (or even a steady job), I don't hold out much hope of ever paying them off. I will be paying them while I'm collecting social security! (if Aunt Sallie Mae doesn't garnish my SS payments, that is!)

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  23. I so agree with you on this! My loans from undergrad are a little more than what yours are, and I'm paying about $600 a month when you include federal and private combined (the private won't let me pay less over a longer period of time. Apparently they "don't care about your income" is what I was told when I called). It just doesn't make sense to me to send the generation who would otherwise be spending the most money out into the world unable to spend any money. That cannot possibly be good for the economy, and it's certainly not good for those of us trying to start a life who are completely unable to because we're crushed by debt. I can understand that certain parts of an education are going to cost money, but there's absolutely no reason why it should be this expensive that only members of the upper class can afford to pay for it without taking on massive amounts of debt.

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    1. You were actually the first person I thought of when I read this post, Kiersten...

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  24. Completely agree with you the education is a right, not a privilege. The astronomical cost of going to school is criminal.

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  25. Six percent interest is a crime! We want an educated society but aren't willing to pay for it. It's a tragedy really...

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  26. Some days, when I'm sitting at my desk, I stare at that piece of paper (after writing my check) and think, "Were you really worth it?!?!"

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  27. ohh yessss you are preaching to the choir! i had nearly $0 debt from undergrad and my law school loans are more than yours ugh. i've been making the payments for 4 years and still it's barely gone done. i just make the monthly payment and try not to think about it. but then when i DO think about it, i get super annoyed. i'll be paying it off for forever and the interest makes me want to throw up. i would love to make extra payments to get rid of it faster but it just isn't possible right now. just know that you aren't alone!

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  28. I hear you! I don't have graduate loans (because I didn't go to grad school haha), but my husband and I both have loans from undergrad. I took out only what I needed, but my husband took out a lot more than he needed and lived on it and didn't work. We have discussions all the time about what we would do if we didn't have student loans. Luckily, mine weren't too bad, and within the next three years they should be paid off--I can see the light at the end of the tunnel! It so awful that the government makes so much off of our investment into our education. It just plain sucks.

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  29. Thank you for writing about this! It is such a common problem that people don't talk about enough.

    My student loans are crushing me, and they are from an undergraduate degree. I went to school for Arts Administration and am fortunate enough to be working in my field. I had a large scholarship and worked as much as possible throughout school, but came out with $58k in loans. Now that I am working (in the non-profit sector) I'm struggling to pay my loans, and grad school seems like it will be impossible to pay for. Sometimes I even ask myself if it will really be worth it to go back for a grad degree (most likely an MBA). I'm not sure I can justify more debt.

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  30. Student loans are the absolute worst!!

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  31. I feel you on this one. I am working on paying off my mountain too - that being say, I am glad I have them. If I didn't have them - and they weren't available - I wouldn't have graduated (or it would have taken A LOT longer). I am at least out of school, have a great job and can pay them off ---- at a max within the next 5 years.

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  32. I liked this post a lot, Kate! I appreciate your honesty about your loans and I totally feel like reading these comments helped me. My husband has very little debt from student loans, but I have undergrad and graduate school loans I'm paying on and like you....I'm getting nowhere. It's so frustrating to send off money every month and know i'm not even really make a dent in what I owe.

    The most frustrating part of me is I am not even working the the fields I have degrees in, while I'm much happier now, I'm like OMG WAS IT WORTH THIS?

    Thanks for this post:)

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