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How I got deep in student loan debt

After 8 years of postgraduate education, the author was surprised to find herself $100,000 in the hole.

By MSN Money Partner Aug 20, 2012 1:43PM

This post comes from Honey Smith at partner blog Get Rich Slowly.


Get Rich Slowly on MSN MoneyMy mother was quadriplegic by the time I was in high school. My dad was a real estate agent who worked on commission, so he worked long hours to make ends meet. As a result, I took on a lot of responsibility at a young age.


Image: College graduate (© Corbis)I cooked and cleaned and did all the grocery shopping. I did the laundry and paid the bills (in the "balancing the checkbook and writing the checks" sense, not the earning money sense). I took my mother to the bathroom, fed her and tracked her pill regimen.


I knew my parents couldn't afford to send me to college, and I wasn't allowed to have a job because of my responsibilities at home. So, in lieu of saving for college, I threw myself into everything school had to offer.


I was salutatorian. I was on the dance team and the academic team. I was secretary of the service club and president of the math club. And it worked: Not only did I get in, I graduated from college with a 4.0. Then I went on to get a master's and a Ph.D. Unfortunately, I got $100,000 of debt to go along with it.


What leads a (relatively) smart person to make almost 10 years' worth of poor financial decisions? As immoral as universities may be, there's more to any individual's decisions than external influence.


Undergrad: An auspicious beginning?

When she was young and healthy, my mother had a full ride to Boston University. She dropped out because she wasn't doing well in her premed classes. What she really enjoyed was writing. I remember asking her, "Why didn't you just change your major?" She said it never occurred to her.


She eventually got an associate degree from the local community college. However, she always regretted not completing a bachelor's degree. Her experience led her to believe that the best degree was the one that you finished. She also believed that if you picked something you enjoyed, you would be more likely to do well and be happy.


When I started thinking about college, my dad said smart people major in business. He suggested, "Not that I'm telling you to follow in my footsteps, but female real estate agents make a lot of money." My mom would nod sagely at his advice. Then after he left the room, she would stage-whisper, "Do whatever makes you happy."


I attended a state school, since the Florida Bright Futures lottery scholarship paid for 100% of my tuition and a book allowance. I was a National Merit Finalist. I received Pell grants and a variety of other scholarships. Since my education was paid for regardless of major, I followed my mom's advice and did what made me happy. I was a creative writing major and a psychology minor. I worked as a server and a tutor at the writing center. As a result, I graduated with no debt. (Post continues below.)

Grad school: The downward spiral begins

I was intimidated by the thought of graduating and getting a "real job." Instead, I decided to keep doing what I had always been successful at: school. I started an M.A. in creative writing. I also worked on campus 35 hours a week, teaching and tutoring. However, graduate tuition was expensive. Luckily, Stafford loans were there to fill the hole. I knew it was a loan, but I'd never borrowed any money before. I didn't have a concept of what borrowing really meant in terms of paying it back.


During this time, I loved my job so much that I decided I wanted to run a writing center. My boss had a Ph.D. in rhetoric and composition. I researched Ph.D. programs, applied to three, and accepted an offer from a top five program. It entailed moving across the country, which I couldn't afford. I wouldn't get financial aid until fall. Enter credit card debt.


The cost of living in my new city was also much higher. Again, Stafford and Visa filled the hole (though there were still a couple of weeks between moving and financial aid kicking in when I didn't wash my hair because I couldn't afford shampoo).


Yes, I was taking out more loans. But I was making only $14,000 a year, and my paychecks were $750 apiece. The average starting salary of $50,000 was three and a half times what I was making. That could only mean my paychecks would be three and a half times bigger. Right?

Somehow the fact that this $14,000 was spread over nine months instead of 12 didn't seem significant. Taxes and payroll deductions for things like health insurance weren't even on my radar.


I also don't recall a single time when I saw a total of how much I'd borrowed until my degree was almost complete.


Graduation approaches: I'm in over my head

Even when I saw my total of about $100,000, it was poor math all the way. I thought, "OK, I was in grad school for eight years. That means I borrowed an average of $12,500 per year. I was also making $14,000 per year during that time, so my average income was $26,500 per year. But soon I'll be making $50,000. That's twice as much! This is no problem."


My program also claimed it had a 100% tenure-track job placement rate. It didn't occur to me that this couldn't be possible until after I was advanced to candidacy and took a job search class. Then this statistic was amended to "100% of students who wanted to be on the tenure track ended up with tenure-track jobs." "Who doesn't want tenure?" I thought. "This won't be me. This is no problem."


I did know, of course, that getting a Ph.D. in the humanities wasn't going to make me rich (although the professors in my program all had 3,000-plus-square-foot homes in the nicest area of town). But it was more important to be happy than to be rich. Besides, I grew up poor. I was familiar with it. It didn't sound scary.


Then I went on the job market. My hottest lead turned out to be in Punxsutawney, Pa., and I had a few realizations. I didn't want to live 200 miles from the nearest urban center. Not only that, I couldn't even if I wanted to: Jake and I had been dating for more than a year. Our relationship was getting serious enough that he needed to be a factor in my plans.


By this time he'd graduated from law school and had a job making $90,000 a year. He was traumatized from the bar exam, and the thought of taking another one only a year later gave him cold sweats. Even if he was willing to do it, he couldn't afford to make much less. A salary of $90,000 a year would be impossible to come by in a tiny rural town. Now my job search was what they called geographically restricted. That's academic speak for "it's your own fault if you don't end up on the tenure track."


Suddenly, unexpectedly

So I moved to Jake's city and geared up for another year on the job market. I got a full-time administrative position in summer 2008, right before the economy tanked. The week after they hired me, my institution implemented a hiring freeze. Six months later, they instituted furloughs.

I combed the national job lists in my field, but I was geographically restricted. Even if I wasn't, it was one of the worst job markets in memory (and memory didn't have a lot of good years anyway). And then there was the unexpected -- though, given that I think I'm psychologically predisposed to happiness, maybe I should have expected it.


It turns out I love my job. I love the work I do and the people I work with. I love the city I live in (even if it's 109 degrees outside right now). I have family in the area. Jake grew up here. At this point, he has more than five years of business connections here, and I have four.


At some point, the life I was living for now had become the life I want to live. I have a 10-minute commute. I leave work at 5 p.m. every day and don't need to think about it until the next morning. I don't check email during my off hours. I don't work in the evenings. I have pets, I am a hobby chef, I read novels. I think I would have enjoyed the tenure track, but I don't need it to be happy.


I just need to get our financial situation under control so I can keep living this life.


This is my story. This is only my story. I cannot speak for others with student loan debt. But I know many, many people with high student loan debt (including lots of folks with totals higher than mine). So I know you're out there, fellow student loan debtors.

What's your situation? How is it different from mine? How is it similar? I am especially interested in:

  • Your total student loan debt.
  • What degree(s) you have.
  • When you went to school.
  • Whether anyone talked to you about student debt or the job prospects in your field.
  • Whether the information you received about student loan debt or the job prospects in your field was accurate.
  • What you wish you had done differently/advice for others.
  • How you're dealing with your debt.

There are obviously many decisions I could have made differently. It's undeniable. But since I can't go back in time and make different decisions, I'm declaring a statute of limitations on regret. Plus, I'm taking responsibility for my errors in judgment and paying the loans back. I have to, because you can't discharge student debt in bankruptcy.


However, as Robert Brokamp pointed out, there are systemic problems with student debt in this country (check out this paper (.pdf file) for some facts on six-figure student loan debt). Those of you who have been through the system, how would you change it?


More on Get Rich Slowly and MSN Money:

Aug 21, 2012 10:45AM
Did I read that right ?  Eight years of postgraduate education ?  Being a doctor only takes another four; a lawyer, another three.  Sounds to me like another "professional student" story.  I once worked with a guy (I was a manager, he was part-time) that had been in college for over fifteen years before his parents cut him off.  I also worked with a girl that kept changing her major (on purpose) so she wouldn't graduate.  Eventually she slipped up and took the "wrong" class and graduated with 245 credits for a four-year degree.  She was so mad but all she did was move back in with her parents while she tried to decide what to do with her (Liberal Arts) degree.  I realize that these are extreme cases but the fact is for young people, advanced education should be used as a way to prepare you for a career; hopefully in a field you like.  It shouldn't be used as a way to put off growing up.   
Aug 20, 2012 10:43PM

I do not understand how all of these supposedly smart people can get themselves in this much debt.  Saying I just didn't think about it until near the end isn't going to cut it.  This is real life now, not your parents money, EVERYTHING costs money!   Parents here is the advice you give your children if they have the ambition to actually attend class and study.  Go to the closest reputable college, most likely a state college and get a useful degree meaning science, business, math, engr, nursing etc.  Get your 4 year degree and get out into the workforce!  Find out if you love this work, if so and you want to advance tell your employer to send you back to school on their dime.  This is how you get a grad degree without huge debt.  If you find out you don't love what you do, start doing what you love, you'll start at the bottom, but at least you have a college degree which can get your foot in the door of many jobs including those not directly related to degree. 

Aug 21, 2012 8:47AM
I stopped reading when she said she had a free ride for undergrad and majored in creative writing and minored in psychology. What a waste
Aug 21, 2012 2:51PM
For those who think you can "work your way through college" you really can't anymore.  College prices have inflated beyond that possiblity.  My wifes grandfather was a cab driver and sole income earner for his 3 kids and put all three through college (one through med school) and bought them each a car.  With current tuition that wouldnt be possible for just one child.  I started college in 2002 at a price of 25k a year and now the rate for the school is over 55k per year.  I dont recall seeing peoples incomes make that kind of a jump during that timeframe...  Colleges have reached the point of pricing themselves out the market.  And students and parents are to blame as well.  I have a degree in engineering.  I have a bunch of cousins that paid similar college rates but have degrees in philosophy, political science, basket weaving, etc.  So I think you can guess who is employed and who will the forseeable future will not be (excluding jobs where you ask "do you want fries with that?").  Parents need to make sure their kids have a career path in mind not just some fluffy major.  All sides need to pull it together and lower the costs, lower student loan interest rates to ~3% or lower, and make wise choices for majors/careers.
Aug 21, 2012 11:26AM
I'm currently enrolled at a private university studying for my B.S. in computer science. Upon graduation, I will have a ballpark range of $20k in student debt, depending on tuition increases this year and next year.  I knew that going into a technology field would have good prospects for a job.  I was fortunate to have parents who raised me to be financially conscious. I, too, was always told to do what made me happy, but with a catch to be practical and realistic about the world. I have also heard the terrible advice to study what you love and that everything would "magically" fall into place. We unfortunately have developed a culture where everything is expected to be handed to you. I agree it's important to study SOMETHING that you enjoy, but it is more important to have a plan on how to make it profitable later. There is no point in pouring out literally hundreds of thousands of dollars as an investment in yourself if your investment is going to have poor returns to pay back all the money. If you do pursue something with a shallow prospect pool, bust your butt in order to network. I've been attending career fairs, polishing a resume, and hunting for experience since my first semester so that I can be a professional the moment I'm handed my very expensive piece of paper.

I'm lucky enough to have my parents helping with my education. I'm required by my parents to take out any federal student loans that are offered in my financial aid package, to pay for my own books and lab costs, and to work on campus part-time during my studies. Additionally, I work internships every summer (and even opted to take a semester off to work a few extra months at an internship that paid especially well), and I  try to stash away at least 50% of every paycheck in order to pay down loans and take any burden off of my generous parents that I can.  The other 50% is budgeted towards food, utility bills, car repairs (I bought a 2003 Nissan to commute to my first internship that I've already paid off in full), gas, dental insurance (though I'm still on my parents medical insurance), any co-pays, and any recreational activities. I manage my debt by watching what I borrow, getting advice from the financial aid office when I need it, and budgeting everything to a T. I probably apply to at least a dozen scholarships a month. Most turn up nothing, but occasionally luck strikes. My loans and scholarships cover about 75% of tuition costs. My parents cover my housing and the other 25% of my tuition, mostly from a college fund they started for me when I was born- thanks mom and dad. That 25% actually decreases every semester, and I’m keeping track of so I can pay them back.

To new grads who are having difficulty making ends meet, I’d tell them to budget like crazy. Save all your receipts and ACTUALLY LOOK AT WHAT YOU’RE SPENDING. Look at what is absolutely necessary. Learn how to responsibly use a credit card. The main point is, you’re a real adult now. You need to hold absolutely no one but yourself accountable for your actions. If you overspent and need to take a second job to make ends meet, stop whining and do it. No one is cleaning up after you anymore. Do what needs done. 
Aug 21, 2012 10:46AM
I'm sorry, but if you can't understand the simple concept of a basic loan then you shouldn't have gone or been admitted to college in the first place. I was fully and completely aware of the loan structure, interest rate and payment schedules prior to signing my name to the loan.  Shoot, I understood the simple concept of a loan in grade school.  In addition to that, the loan companies mailed to me several times a year my loan balance, payment options, grace period, etc.  So for those in debt to say that they had no idea how much they had acrued is just absurd.
Aug 21, 2012 11:16AM
Maybe if universities offered classes like "common sense", or "how the world really is", or may even "what it means when you take out a loan" instead of things like "how to survive a zombie apocalypse" things might be different.
Aug 20, 2012 9:20PM

if you want to pursue your muse do so but it doesnt have to be in college.

college should be a means to an end, that being a decent paying job.

while I am not in love ith my studied discipline engineering, I have always been able to get a job

I could have pursued my love, marine biology but there were never many jobs in that field.

to satisfy my desires I watch Nat Geo, Discovery, etc and get up the next morning to go to my well paying job

Aug 21, 2012 8:26AM

I have a BA in a social science and it took longer, because I worked FT during school. I paid as I went and used jc's to minimize the cost and graduated with no debt. I attribute this to parents that were always frugal and taught us to be cautious with credit and loans. I was accepted into a private grad program for clinical psy that would have cost me over 100k over 5 yrs, and I backed out last second. I couldn't justify 100k + in loans for a job that may start me at 55k/yr and require me to move away from a local safety net of our family.

College is under a partial falsehood...if some is almost necessary to make good money, more is better, and tons, is the best of all. A select few ivy league schools can justify the high tuitions. If you aren't in a profession that will make 100K + in a year, find a way to get the education cheaper. Go to a state school, work through college and/or stay at home and save on housing. It makes so much more sense. This is essentially the Dave Ramsey perspective on education. He gets millions of listeners every week on his radio show, because he is so rational about finances.

Aug 21, 2012 9:56AM
I have a B.A. in Political Science and recently graduated with an MPA. I was told throughout undergrad that there would always be government jobs, government jobs are secure, etc. Too bad that was then and this is now.I currently make $8.25 an hour serving cupcakes while I apply for as many jobs as I can on a daily basis. My boyfriend is currently in law school and while his tuition is paid for (because of a scholarship), he still has to take out loans for fees, books, and living expenses. By the time he is done, our combined debt will be around $120,000 - and we accept that.

I am constantly searching for jobs and living at home while cutting expenses, and after we get married we plan on living like college students until our debt is paid off - COMPLETELY. While the rest of our newly wed/engaged/whatever friends are out buying houses, new tv's, new cars, and everything else while swimming in debt, we plan to drive our old vehicles until the wheels fall off, are fine watching our 23" tv's, shopping at Aldi for groceries and renting an apartment within our means until we are out of debt. Both our parents lived in trailers and old apartments until well after they had children, so there is no need to fool ourselves into thinking we should have all the trappings our parents have in their 50's while we are in our mid 20s.

Do I regret taking on so much debt? Not really - I wouldn't have my degrees without it, and I truly believe my education will pay off in the future. I accept that I chose a career field that doesn't bring in the big bucks and knew that going in (although I didn't know how horrible the job market would be). I'm terrible at math and science so to say I should have chosen a major like engineering, computer science, nursing, or any other currently in demand field is a waste of breath - not everyone can and should enter into those fields.

I think the best thing my peers in similar debt situations can do is be realistic about their situation, accept it, and do the best they can. Many Americans in the past have been far worse off and made it through. No, it's not fun, but we took on the debt, and we need to pay it off, no matter how long it takes.
Aug 21, 2012 9:17AM

I graduated from journalism school in 2009 with around $45,000 in student loan debt. After my 6 month grace period ended, I began repaying my loans on a 15 year plan. I was fortunate enough to land an internship, which turned into a job and have never missed a student loan payment. While no one talked to me about the job prospects or repaying the loans, I worked very hard to get a job (they’re out there, sometimes you might have to settle and work your way up) and look at my situation realistically. I pay around $450/month and making extra payments when I receive any tax returns and bonuses. I try to stick to a budget and have stayed away from grad school as it’s not a smart financial decision right now.

Aug 20, 2012 3:05PM

I am also crushed by student loan debt.  I went to an Ivy League for my Bachelor's in a hard science.  Stupidly, I went out of state for the name of the university, and did not qualify for aid.  My parents' income was too high for that, but not high enough for them to be able to help me in any way.  I took the whole thing out on loans, and it amounted to something like $100,000.  In that field, job prospects were terrible unless I went on to get my Ph.D, but I wanted to change fields.  So I went to grad school in neuroscience, and 6 years of capitalized interest later, I owed $148,000 (one consolidated federal loan and two very large private loans).  I had a small stipend, but that went towards rent, food, and paying down my credit card which I racked up during college.  Nobody bothered to talk to me about job prospects, and I didn't bother trying to find out becuase it's not like I have many job options outside of academia, given my experience.


I just finished a very difficult (financially) 1.5 years of a postdoc position which paid little more than my grad school stipend and I had to relocate to a place where I have higher living expenses.  My monthly payments are about $850, and if I weren't married, I would not be able to survive (not that my spouse makes much money).  To save money, we have indefinitely postponed our honeymoon, almost never spend money on luxuries like eating out, and still sometimes barely can feed ourselves.  Thankfully I am no longer on a postdoc salary, and I am trying to pay down my loans with some of the extra money, while also saving for a house (though now I hear I might not be approved for a mortgage because of too much student loan debt).

Aug 21, 2012 10:42AM
Just get a job like the rest of us.  I worked since I was 10 yrs old.  I am 75 now.  My children worked odd jobs from 10 years picking stones in fields for farmers, picking potatoes, mowing lawns later they handled 80 bales of hay during harvest.  They didn't have mp 3 players, cars etc.  The used the greyhound.  I might add the only students that used the grey hound to go home and back to the university. Now they have the mortgages paid on their home's.  Both paid them off in 15 years.  You students must learn how to be frugal.  Quit spending other peoples money.  Borrow money , get scholarships, work during the summer and during school.  Thats how you solve your problems.
Aug 21, 2012 12:40PM

I think the system is broken. Education costs way more than it did, and the cost has gone up much higher than the cost of living or inflation. Tuition is twice what it was less than 20 years ago!


I have a BS and MA in psychology. I wanted to go on to complete my PhD so that I could practice as a licensed psychologist, but I ran out of money. I finished my MA with $91,000 in student loan debt. I was well aware of how much debt I was accumulating, but I believed the lies people told me.


Do well in school, get your education, and getting a good job that pays for it will take care of itself. That's the lie.


I now make $30,000 a year, and it's the best job I can get. At my current rate of repayment, I will be paying student loans until I'm 57 years old! But it is all I can afford. I had no help getting through school; I did everything myself. I started out the day after graduating from high school with no money and only the belongings that I could fit into a Pontiac 6000 (which wasn't mine). Everything I have I have earned. I want to pay off my loans, but in 6 years of repayment I have taken about $1000 off the principle.


If you want people to go to college, if you want people to make our world better, be ahead in science and technology, you need to help them fund it. Or more people like me will give up. I couldn't finish my PhD because I couldn't affrd any more school. And that is the way it is going.

Aug 20, 2012 3:32PM
I'm probably going to get jumped on for saying this but your mother was right about studying what you enjoy.  I'm old enough to know that college degrees have cycles.  

A few years ago everyone was told to get an MBA, then came the financial crash, and MBAs are out of work.  A law degree was supposed to get you a great paycheck but there are so many lawyers now that many have trouble making ends meet.  There are many examples but I see no reason to study something you don't like because someone else thinks you will get a stable job and paycheck.  Do something you enjoy and your time will come.

Student debt is out of control in part because society doesn't care much for education anymore and won't subsidize it anywhere close to how corporations are subsidized.  We have messed up priorities and sadly the best and brightest young people are being cheated.
Aug 20, 2012 8:59PM

I am not a conservative, and I think it is close to a crime that there are all the vultures out there that are willing to enslave students to long-term debt before they ever enter the workforce.  However, and I really hope this doesn't sound heartless, too many stories like this and I might give a lot more credibility to conservatives venting about personal accountability.  I almost wonder if the story might be a conservative plant to make a point.


Complete freedom to choose whatever you want to do w/o regard to financial liability in the future is an alternative very few of us can do.  Most need to be realistic on choices, and we should be held accountable to our choices.  Geographically committed?  Nonsense.  Because I liked it I chose work w/no pay?  Irresponsible, unless you were willing to take a second job to pay the bills. To look back after incurring all the obligations and say oops, I didn't consider that, as if that is enough to wipe away years of bad choices?  Sorry, don't buy it.  Too many people successfully do it better.


I won't go into my own trials and tribulations through the college years.  Will just say that I made some mistakes early on that blew some opportunities, I had to go through some years of fixing those mistakes after I finally got my head in the right place.  I now am a successful, well paid professional with a master's degree.  If I had done everything right, I could be even more successful.  As part of this, I would have loved to have been able to be a part of the frats, the clubs, the non-paying internships, etc.  I knew that I needed to pay the bills, so instead worked 50+ hours a week at low-paying service jobs.


Almost everyone in the country wants to be successful. We all start with different advantages and liabilities.  Do it all right so you capitlize on the opportunities, hats off to you. Make some mistakes? No problem, most of us do. Just suck it up, fix them, readjust your dreams to be a little more realistic and move on to fix it. Saying oops, I made mistakes as if that is enough to wipe them from the record is a sad example of a no-blame, no-accountability entitlement mentality.





Aug 21, 2012 9:44AM
If you really incurred this much debt going to school for degrees that will never earn you the income to pay the debt back then you should burn your degrees because you didn't learn a thing the entire time.  

Stories like this are amazing to me in that people could really be this inept.  
Aug 21, 2012 1:10PM
To many kids bought into the fiction that hollyweird peddles that if they just pursue their dream, a great life will just fall into their lap. Sure you may enjoy creative writing or basketweaving, but when you spend 100K to get that degree, don't whine that you can't find a job that will pay off your debt. To many people have believed that lie that everyone must get a college degree. There is nothing wrong with earning a votech degree from a technical college, you will probably earn a lot more than us meager little accountants.
Aug 21, 2012 11:10AM
I enjoyed the comment - "I did know, of course, that getting a Ph.D. in the humanities wasn't going to make me rich (although the professors in my program all had 3,000-plus-square-fo​ot homes in the nicest area of town)." The parenthetical part speaks volumes - doesn't it?
Aug 20, 2012 9:26PM
$55k in student loan debt is what I'm facing.  As a single parent at age 19 I put forth a huge effort to pursue a college degree so that I could provide a better life for my son. I worked fulltime at a credit union and attended college at night. I never qualified for Pell Grants, believe it or not  I earned too much money (single mother earning about $28k er year).  I attended junior college which was paid for by my employer.  Then I transferred to a private university only because it provided the best "working adult" program.  I left there owing $22k.  Then after applying for advancement both internally and externally I decided to pursue a masters online. HUGE mistake. Graduated owing $52k when combined with my undergraduate debt.  I have slowly advanced since completing my MBA in 2008. However none of my jobs have even required a degree.  I now pay $138 per month thru the IBR repayment plan.  I now owe $3k more than I borrowed, even though I have been making payments for 4 years! If I could do it all over again I would have worked my $28k per year job and kept Medicaid for my son. I busted my butt just to be a dummy with a degree of debt!
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