Wednesday, May 7, 2008

Was (is) It Worth It?

I read this post at MSN Money just now about "How Much Student Loan Debt Is Too Much" and it kinda pissed me off.

It says the average student has $20k in student loans and first of all, I just don't agree with that figure. I'm no economist, but I remember at my undergrad "Exit Interview" for financial aid, they told me my loan debt was less than $20k and when I looked at the forms, all that was listed on them were my federal student loans, not the whopping $20k private loan I took out. It's just an anecdotal piece of information but then the same thing happened yesterday when I called up the Department of Education looking for some help with my private grad school loan (they didn't have it listed in their records). I know many many people who took out private loans. Hell, at my grad school it was pretty much mandatory unless you were very wealthy to begin with. I have a feeling that many more students carry more debt than the studies indicate. But that's just my two cents.

Anyway, even though, gasp, I owe a significant amount of money due to my education, I don't regret it for a minute.

After college I briefly joined the "rat race" working as a secretary in a big city. I was making good enough money considering what I was required to do, but I HATED my job and wanted something more fulfilling. Most entry level jobs are pretty much the same unless you are 1) extremely lucky or 2) extremely talented in a field.

I always knew I wanted to get a professional degree to advance my career options and it wasn't about the money for me. Sure I did the cost/benefit analysis before packing my bags, but it's so hard to predict where life will take you after graduation.

Truth be told, I am looking for a more lucrative position right now, but I currently am proud of the career choices I have made, including going back to school, and I don't think the price tag should have scared me away. I was fortunate enough to go to a very selective liberal arts college and the education I received there was invaluable. Some people think state school is a bargain and maybe for them it is. But I have no regrets.

I also think, despite the staggering amount of my student loan debt, that I can get it under control and still live the kind of life that I want.

And now I'll step off my pedestal and get back to work!


Lady Snark said...

I totally respect what you're saying. Plus, it's your life. Different people value different things and that's okay.

But your debt load would have me chewing my fingernails clean off on a nightly basis. If I understand what you've written so far, you are $157,000 in debt on a $43,000 salary. Your payments are probably at least $1,800/month (never mind any other debt you might have). That's twice as much as my rent! I make about $7,000/year more than you, and a monthly debt payment like that would leave me with $800/month for EVERYTHING ELSE-- expenses, saving, etc.

I couldn't do it unless I was living at home-- I have no idea how you're swinging it. And to top it off, you'll be paying $1800/month to your lenders for 7-10 more years (depending on your interest rate)!!!

To me, that's not even close to being worth it. I understand you can't do anything about it now, but that salary is just all out of proportion to your debt load. Unless you start making six figures, I foresee a lot of struggle for you over the next decade-- and that's a long time to be paying for even the greatest of college experiences.

This is a sincere question-- I'm not trying to make fun of you. What about your college experience made it so worthwhile that you can say it was worth six figures in loans?

Sallie's Niece said...

Oh wow, that's a good question and one I may have to address in a future post. Just to clarify my monthly debt payments are only $826. Only, ha! My father is paying a student loan for me in the amount of $303. The vast majority of my debt is from law school. I'm just starting out in my career at a very low paying job hoping it will pay off in the future. I'm fairly certain it will. Otherwise I may have to sell my soul and become a corporate lawyer. Over the course of my lifetime though I know I will see the rewards of my education financially. As for intrinsically, yes it was worth it in that I am respected in my field and get to do exciting and interesting work. And from what I've been seeing out there, six figure student loan debt is the new black. I hope you keep reading!

Sallie's Niece said...

Also you can see an outline of all my debt on the handy google document shared on the upper right hand corner of my blog. I just updated it and didn't do the final total yet but it's less than $150k, somewhere in the $130s. I don't update network IQ frequently because it gets too confusing.

Lady Snark said...

Okay, I see now. That makes a big difference. If (between your contribution and your dad's) you're paying $1,200/month and your total debt is $135,000 (ish), you're still looking at about 10 years of repayment, but $800/month is MUCH more manageable than $1,800. And I am sure you will be making more money at some point.

I wasn't trying to be rude, it just blows my mind to picture having that much debt. That's as much as your BF just took on for a house! I'm saving like a demon right now so I can go back to school in a year's time and finish college without taking out loans-- I just hate being in debt, though I am willing to eventually take on a mortgage.

It's funny because I was having this conversation/argument with my dad the other day. He was telling me that I should go back to school right away because education is more important than anything, so what if I have to take out loans, etc. I vehemently disagreed (which is how I made it out of my first two years of undergrad with only $5k in debt-- long since paid off).

But as I said, just because I wouldn't have chosen your route for myself doesn't make your way wrong. And I would definitely love to read more about what made your college/law school experience so invaluable. It's a subject I can't get enough of. Please do write an entry on this, if you feel like it.

And even though it's not PF devoted, feel free to drop by my blog anytime :-) I'm a member of the WIR community, and one of the posters there mentioned your blog. It's a good read, and I have to say that you've done a fantastic job in the short months since you've started.

Sallie's Niece said...

Yeah I definitely hear you about not wanting to go into debt for school. Had I not gone to law school I would probably have paid off all my undergrad debt by now and be in a much better position debt-wise but I was pretty set on getting out of my parents' house, out of a crummy job and onto the future. Looking back I probably could have waited a year or so longer before taking the plunge and saved up more. We live we learn I suppose. Good luck with your decision and I'll be sure to check out your blog. I have lurked on WIRR before but didn't see any mention of me. What did they say?