The long and short of it is that the culture of debt in grad school supported my dumb decisions. The problem is both individual and systemic. Because the system gave active and vigorous windmill high-fives to my desire to avoid adulthood or cope with poverty and bad choices, there was no pushback on my decision to subsidize my very long and mostly pointless degree(s) over and over again with government money. I had to force myself to lift that rock and peer at the gross stuff, on my own, and because human beings like to avoid pain and embarrassment, it took me a long time to have the guts to do that. As in, years. And when I finally decided to leave, some still encouraged me to stick with it, just for a few more years.
But, now we’re there: we’re looking hard at our budget, we’re coming up with a plan to reduce our debt and be able to afford things like, ya know, FOOD, and it’s very painful. Ask yourself the last time you looked up your outstanding balance on student loans, or did the math on how much interest you pay on your credit card every month. It hurts.
It’s very easy to say yes to loans when you’re 22. You think, I will be done in 5 years. You think, This is an investment. And you think, as I mentioned before, that at some point you hit a threshold past which the amount of debt doesn’t really matter (a mountain is a mountain, right?).
But it does matter. Everest vs Mt. Hood matters. K2 versus McKinley fucking matters. There’s a world of difference between 60k and 20k in debt; between 120k and 70k. (Even if you don’t have debt going into grad school, how many grad students go debt-free during the average 8.2 years it takes to complete a PhD?)
Let’s say you only have student loan debt when you finish your degree (no credit card debt, even!), and you decide to aggressively pursue debt-free status. You are a very, very lucky PhD and you find a job in the midwest that pays 45k a year. You’re single and don’t have kids (or pets): bonus! You pull a Joe and share an apartment with a friend and are able to live on 25k a year, doing the rice and beans thing and keeping costs low. Putting 20k towards student loans, which doesn’t include interest and all that stuff, it will take this much of your life to repay the loan:
- 20k in loans = 1 year
- 40 k = 2 years
- 60k = 3 years
- 100k or more = 5+ years
Really, let’s reframe student loans as a prison sentence. The higher your debt, the longer your sentence. And 5 years might seem like nothing at 22, but I’m telling you that ten years later, 5 years seems like a big chunk of your life, and that’s if and only if you are able to put a huge amount towards loans every year. Most people – like me and my family – can’t approximate that.
So you might say Fuck it, I’ll just make my minimum payments for 25 years or whatever and just count on having to pay it. OK, yeah, that makes sense (if you ignore things like the massive amount of interest you’ll pay); but really, think about what you could be doing with that $400 or $500 (or $1000) per month. You could… save for retirement. Get your kids the braces they need or help pay for your Mom’s nursing home costs. Go on a honeymoon in San Francisco instead of camping. Get your dog the surgery for his hip instead of putting him to sleep. Invest in the stock market, or buy a kickass car. Fix the car you already have. That kind of money, month after month? It can be a life or death, eat or go hungry difference.
Loans are only an investment if they pay off. Going into tens of thousands of dollars in debt for an advanced degree that is highly unlikely to get you a job that pays more than an entry-level salary is idiotic. We are crazy for thinking this was the right thing to do. Because we end up on food stamps. Or we end up realizing we should have gone in a different direction in our careers and go back to school, again, for a different, practical degree (I know PhDs who are becoming librarians, midwives, doctors, high school teachers: they could have saved years of time, effort, and money without the scenic route through a PhD, although few will outright say that they regret the PhD). I’m starting to agree wholeheartedly with the boom-and-bust “higher ed bubble” theory because my decision to go to grad school parallels so closely the heartfelt and utterly misguided desires of folks who bought houses during the real estate bubble and ended up with homes worth less than the money owed on them. A PhD is worth so much less than the debt incurred to earn it. The PhD, in most cases, will cost you way more than it’s worth in debt and regret. But when you are inside the system, it’s surprisingly difficult to see the writing on the wall. People are so certain that they will regret quitting more than anything else that they stay on even when the thrill is gone. This is bonkers. Quitting is awesome. Quitting is freedom. Debt sucks. Debt is prison.
I’m in my early thirties and I have two daughters, a house, two Master’s degrees and a ton of worthless graduate credit hours. I have dreams for my daughters that may never be fulfilled. I have dreams for my own life that will be on hold indefinitely, and may go completely unfulfilled because the next decade or more of my existence is dedicated to paying for mistakes I made when I was young and willfully ignorant.
This is a very painful/hurt article for me, but it so f*&#@(#O*ing true. Thank you!
Thanks for your comment — it was painful to write, too. I’m glad it resonates with you!
What an incredibly depressing graphic.
You’re really brave to be writing so honestly about this– so many of us are struggling with these issues. And for me, the student loan debt isn’t a terrible monthly burden, but we’re underwater on our house, and it’s so, so frustrating to feel stuck in that cycle of treading water. I’m not poor. I’m not even really broke. But I’m also just not getting anywhere. And when I figured out our new financial plan, I didn’t even consider the possibility of dealing with the student loan debt– I just see it as something I’ll be carrying around indefinitely.
Jen,
I really sympathize. We’re doing fine on our house, but there have been times when I deeply, deeply regretted buying (even though we LOVE our house and couldn’t imagine raising our daughters anywhere else). It’s sad how debt turns something you love into a monster. I hope this new financial plan helps you make strides towards feeling in control and less like drowning. My monstrous debt will be the last thing in our “snowball” to tackle.
L.
When I feel consumed with regret and foolishness in not seeing the grad school economy for what it was, I find a lot of comfort in this remarkably compassionate piece on the debt crisis of 2008 (John Lanchester, “How We Were All Misled,” NYRB, 8 Dec, 2011):
“It is easy to diagnose a basic failure of responsibility as one of the causes of the debt crisis; and there’s no denying that such failures took place on the widest imaginable scale, from individuals up to governments…. [But]
many of the people who did stupid things… did so because everyone around them was doing them too, and because loud voices were telling them to carry on. The Icelanders who bought cars with foreign currency loans were sold them by financiers who promised that it was a good idea; the Irish who bought now-unsellable houses on empty estates were told, by builders and bankers and the state, that this was a once-in-a-generation opportunity; the Greeks who are, at the time of writing, furiously rebelling against austerity measures were falsely told that the state could afford to look after them, and arranged their lives accordingly.
The collective momentum of a culture is, for more or less everybody more or less all of the time, overwhelming. This is especially true for anything to do with economics. The evidence is clear: it is easy to mislead people about money, and easy to lead members of the public astray both individually and en masse, because when it comes to money, most of us, most of the time, don’t know what we’re doing. The corollary is also clear: the whole Western world misled itself over debt, and the road back from where we are goes only uphill.”
I’m not going to let myself off the hook for some bad choices, but I don’t think we do the world any favors when we talk about debt–particularly educational debt–solely in terms of choices and responsibility. A little righteous anger, I find, also makes that debt a little easier to bear!
Caitlin, I agree: that’s why I start the post talking about the mutual reinforcement of my desires and the system that actively encouraged me to keep on going. I don’t think focusing either on one (individuals) or the other (the system) could adequately explain the phenomenon or address the problem. That being said, I want to own the road out of this, so I’m trying to own the road in, as well. Thanks for reading and commenting! I love the quotation you share.
As one of the people mentioned in this post, and as someone about to take out my very first student loans to get that practical degree, this entry makes me want to weep. I am SO SCARED of debt.
I am going to sound like I live in a fantasy land to you but seriously why is student debt privatised in America?
In Australia we have a Higher Education Contribution Scheme whereby each course has a fee, varying depending on how good the university is and how much demand there is for it. You can either pay upfront or you can have the State pay it for you. Then once you get a job and start earning over a certain amount you pay the debt back, plus some interest.
If you never earn enough, you never repay it. Viz, lots of folks do an Arts degree when they retire and they obviously never repay that debt because they are retirees on fixed incomes.
No one has to stop education because they can’t afford it in the short term.
Obviously it’s not a perfect system. Originally (20 years ago) it was set up so you didn’t start repaying debt until you were a high income earner but now it kicks in at about $20,000.
I really feel for you in your writings but, like virtually everything in America, I also fundamentally don’t understand how your system works. How can people possibly be happy with this when there are so many better alternatives?
It’s like your health care system which, no offense, seems monstrous from the perspective of anywhere else in the Western world. How can there possibly not be a mass movement to replace it with something that actually works?
These are good questions. I think it’s a completely different perspective here: Americans, in general, do not want big government or trust government to do things efficiently or effectively. It’s seen as socialistic and expensive to have government run things, and there is a belief that the “market” will bring us the best services for the best prices, and that individuals are in charge of their own lives (and thus, our own debt, education, and health). People believe that local or state control is preferable to the long arm of a federal government that may be hundreds of miles away and not in touch with the specific needs or desires of local community (e.g., the needs of a community with a strong bilingual population in southern Arizona is very different from those of an urban community in Minnesota, etc). While there is a lot of support for public healthcare (e.g. “Obamacare,” which I favor), there is an ideological opposition to “big government” that undermines most big programs that would do the things you describe.
For what it’s worth, the federal loan system can be very flexible when it comes to paying loans back. You can apply for income-based repayment, deferrals during unemployment, etc. It’s not that different from what you describe for Australia, you just have to go and ask for those options. But, to pay off $100k in debt sucks no matter where you live. It’s an enormous burden.
Private loans (e.g. through a credit card company) are not flexible like this.
Yes to all of this. And I think it’s impossible to overstate how much people FREAK OUT about any systemic change that might be perceived as Socialist. Universal health care? SOCIALIST. Federal funding for maternity leave or child care? SOCIALIST. Many people believe (fervently, intensely) that every individual is absolutely responsible for themselves and could be happy and healthy and successful if they would just work hard and make smart choices. Hyperindividualism, plus general distrust of government, plus ignorance.