Well said, Lucie. I was beginning to wonder if some of the “oh they can just hunker down and pay it all off quickly” were April fools posts.
This was eons ago, but I had a grad school loan when I finished grad school. It wasn’t big, as I look back, but it was big to me. I dutifully paid my $106 every month for 10 years. Even when I was single and had no other big expenses (I did ultimately need to get a replacement car, which was a small, inexpensive one that wasn’t too costly after I sold my old car, but I also dutifully paid off the new car loan) it was sometimes hard, despite having professional degree letters after my name and a fulltime job with long work hours. I did not have any significant expenses outside of that car, my rent and basic living expenses. I am frugal and did not spend on any “extravagances”, aside from a basic gym membership and occasional social activites, and I saved up enough to buy a small townhouse. It cost $57k. I remember writing the biggest check I had ever written in my life at the time for a deposit: $2,500. I managed my money carefully. I was working in my professional career, successfully.Yet I clearly remember the first time I put groceries on a credit card so that I’d have the money to pay for them when my next paycheck came. That was scary. Very scary.
I was still paying on my car, the townhouse and my student loan when I married my DH. He had no debt, as he went to college on a ROTC scholarship.He bought a new car before we married. He paid cash. I was very impressed.
Had dinner with a client the other day. She was an employed lawyer, 39 and divorced with a kid. My jaw dropped when she said she was still paying off student loans. Given that she went to law school right out of college, she has been carrying this debt for nearly 15 years.
A plan is not “I’m going to be a nursery school teacher and be able to live on $500 a month so I can pay off my debt”. A plan is not “I’m going to get a great job with my snazzy STEM degree and live in a cool apartment in SF and make boat loads of money so paying off my debt won’t be a problem”.
A plan is to figure out the kinds of jobs that kids from YOUR college get with YOUR major and YOUR skills and YOUR profile, and then identify how to get one of those jobs, and the standard of living you’ll be able to maintain while paying off your debt and getting to work every day.
The kids who are going to become investment bankers because they are majoring in finance at University of New Haven and live in NY and pay off their loans with their snazzy salary… that is not a plan. If the institutions which recruit at UNH are Bank of America for their retail banking training program, and Pratt and Whitney for entry level finance jobs- both of which pay $28K to new hires- you are not going to the be the wizard who gets hired at Credit Suisse.
Kids here post with the most ridiculous notions- and call that a plan. If you want to become a K-6 language arts teacher, and want to live in Columbus Ohio when you graduate because that’s where your family lives, don’t look at the salaries of ESL teachers on Long Island or what a physics teacher makes in NYC to calibrate what you’ll be earning in Columbus.
It’s easy to go in circles on this issue. Generally I agree – 170k in debt is a BAD idea for any level of education unless you are 100% certain that you will be going into (and will be able to attain) employment in at least the 6 figures upon graduation (undergrad or grad – whichever you’re taking debt for). Problem is – kids change their minds about what they want to pursue; or they simply don’t get into med school or land that investment banking job they were going to pursue for 5 yrs to pay off debt or into that federal judicial clerkship that will land them that associate job at that big law firm in a big city that’ll pay mid 6 figures on day one.
@zoosermom speaks to the issue in law pretty well. While it may not make sense to go into 6 figure debt, if you want to be able to pay off said debt – you better be going to a top 10 law school, working hard enough to be in the top 10-20% of your class there, and in some cases landing a federal judicial clerkship in order to then land yourself a mid 6 figure job. To those who say – it doesn’t matter, you can create a path from any school if you’re good enough, that just hasn’t been true in law for the last 7-10 yrs. Firms that used to recruit at top 20 schools now explicitly say that they will not even look at a resume unless it’s from one of 5 or 7 schools – so you don’t even get to prove how good you are if you don’t have the right name on the degree. If you say – oh well – I’ll go to the next tier of firms; well – those firms are now seeing lots of resumes from school ranked 8-20 and they have their pick of graduates, so they are not less interested if your resume says the name of school #55 and so on. What the top firms have done to the market has created pressure all the way through the legal markets – at least in the northeastern big cities.
My advice to high schoolers is always the same – 6 figure debt is only worth it for med school (any in the U.S. – not Caribbean), a top 5 (or maybe 10) law school, and business schools along the lines of Wharton, HBS, Stanford – bc you WILL be able to pay it off while still living well, so it will feel “worth it”. Anything other than that and you’re risking paying large debt payments for 30 yrs only to hold a “regular” job, and when you look around and notice that your peers went to Rutgers or Penn State and are doing the same job as you and are able to buy homes, cars etc. – you will be a bit pi$$ed at your own decision making.