student loan saga

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It’s done.

I just lovingly placed every paper related to my student loans in the recycling bin.  They are paid off.

It only took me 14 years. (:-0)   My hair is white, just like the jokes say, but by George, they are paid off. The balance due, once over $45,000 USD, is now zero. I sit in a bit of stunned silence. I now have no debt whatsoever. I am free.

This is a bit of a surprise, I’ll admit. When I graduated, I joked they could sell my body parts when I die of old age to finally pay off my student loans.

Thinking about how many of you folks are in the same boat, I decided to write this. Perhaps you will benefit from hearing some of the small strategies that helped get me here.

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My Student Loan Strategies

•  While still in school, spend time and energy seeking out other sources of money too. My loans, while huge to me, were not as enormous as they might have been because I also went for every fellowship, scholarship, and the like that I could.  The best one was the California Graduate Student Fellowship. When I entered grad school, I took the time to fill out the mountainous forms very carefully. It took days to hunt up all the data they wanted. And then I waited. When the envelope came, I was very excited… until I opened it and found I’d been rejected. This was a major blow. I scraped up my last savings and took my first loan, and attended school anyway, scared of the debt I was accruing. That fear did impact my joy in my studies. The next year, I halfheartedly filled out the form again with mostly repeat data and sent it off. To my surprise, this time I got the fellowship. Thousands of dollars, repeated for four years.

  The message here is: stick with it. Apply more than once. Fellowship boards apparently value tenacity. Repeat applications show that we really want what they are offering. In fact, speaking from hindsight, it seems to me that tenacity is one of the major gifts of attaining a higher degree. A Ph.D. in hand proves that its bearer can finish something, even when the process grows teeth-grittingly frustrating and tedious and all you want is to bail; to go to movies and read bad science-fiction novels and have a life again. You stuck with it. Stick with the application for money process, too. It’s worth it.

Different scholarships and fellowships skew for various criteria. Some are place-based (for, say, residents of a particular US state). Some are diversity-based, with desire to support people of certain demographics such as immigrant ethnicities or a populace that they view as under-represented in higher education. The American Assn of University Women (AAUW) likes to support young women going into STEM fields and older women returning to school after a break for child-rearing or other work. One reason I think the Cal Grad people chose me is that I am the first person in my family to go to college. Be sure to apply for the ones whose criteria relate specifically to you: the odds are better, since the pool of applicants will be smaller.

• Pay the loan principal off as fast as you can.  I  noticed that when I paid what I thought I could afford from my modest wages, the actual amount of the debt never went down. In fact, it was still going up. How maddening!!  I felt like Sisyphus, doomed to eternally labor for the bank’s benefit, never to gain my own freedom. This wouldn’t do.

  My way out was to ALWAYS pay more on the principal than on the interest. It takes a bit of calculation to figure out the number, but it’s worth the effort. Even $10 per month adds up on your side of the ledger, thereby reducing the interest that accrues – in geometric proportion. When I sold my car in order to take a nomadic job where I wouldn’t need it or have a place to store it, the money went directly to the principal on those loans. Do stuff like that.

Incremental additions directly applied to the principal pay off. I never paid huge amounts each month, never more than I could afford, and yet now the loan is GONE!!!

It’s a good idea to consult with a representative of the loan company to determine how much extra principle to pay each month in order to get that amount down, based on your own means and comfort level. This can be complex to figure out on your own, as their calculations of interest vary from day to day.

• Keep your honor. I’ve heard some students and grads say that they never intend to pay their student loans off. Bailing on the loan was never an option in my mind. My family is big on honor, and given the vagaries of economic status and other aspects of life, I figure that integrity is all I’ve ultimately got. Really.  I was given the option to accept the loan, which allowed me to gain a wonderful education. Surprisingly, this then led to interesting jobs that I would never have otherwise gotten to do. I owe the money and there was no question that I’d keep paying it back – if only so I could sleep at night. Again, I knew it might take so long that they’d have to take the last bits out of my dead hide, but I was determined to continually do my best to hold to the responsibility I accepted. If you take loans or gifts of any sort, please treat the exchange with honor. 

• If you have to, take a Forbearance. This allows you time to not pay on that loan for awhile when your financial situation gets rough. In 2009, I not only lost my job, I lost my entire workplace. Three college campuses were brought down in flames by the institution’s disastrous leadership. And that was right when the “Great Recession” hit the USA, so no new jobs were to be had either. It took two years before I found another full-time position that paid enough to not be scrounging for food (see a fun post on that) and running down my savings just to avoid becoming homeless, let alone pay off this loan. The Forbearance allowed me to stay in good graces with the loan company while keeping my money in my pocket. Keeping good status in their eyes is important if you ever want another opportunity to borrow big money, such as buying a home.

 Requesting Forbearance status means you are being brave and upfront about your situation (see “honor” rant above) so the loan company understands what’s going on. It signals to them that you are not just taking advantage of them by casually skipping town; you are a responsible person who still intends to pay eventually, and right now you’re doing the best that you can. While this plan elevates your status in their eyes, this plan is still not ideal, as the interest on your loan continues to accrue. 

• Work at the same time you’re going to school in order to keep your loan amount down.  It’s good to have some money coming in from other sources.

…But don’t do what I did. At one point, while attending grad school full time, I had six (SIX!!) jobs. They were all part-time, but still. That was too much. My body finally gave out and I got sick. Extremely sick. So sick that I had to drop out of not only school, but work, and life itself for a year and a half. I was literally broken. This is actually why my student loans wound up being so high: because I couldn’t work, I took out even more loans to pay off the high-interest Visa bills I’d run up for my rent, food, and health care costs. Ugh.

Take care of your health and sanity first and foremost. Hold to certain boundaries regarding workload. You’ll need those habits even more if you become a college professor.

• Some might say that the best strategy is to not take any loans in the first place. If you can pull that off, I agree. It was pounded into my head from a young age to never go into debt: “If you can’t afford it, you don’t need it.” But three big purchases don’t fit within that category, simply due to constraints of time: a house (who has the kind of money to pay full cash upfront?), health concerns (if you wait, there may not be a you left…), and education that you’d like to gain and apply now. These are investments in a stronger, happier future. That said, it’s still good to invest wisely: don’t get in way over your head. Don’t buy a McMansion if you can’t afford the payments and taxes. I took seven years to complete my B.A. degree in order to avoid taking any loans. But I decided it was worth it to take loans on my Ph.D.

• There are some ways to get forgiveness of part of the loan.  Check out the federal Public Service Loan Forgiveness (PSLF) Program. It’s meant to encourage newly minted college grads to take public service jobs like government or nonprofit work, recognizing that tons of loan debt may turn grads off from taking lesser-paying but otherwise satisfying positions in the service industries.

I applied for the smaller but similar California GradAPLE after completion, a program for new grads willing to serve full-time as a college teacher in certain settings for three consecutive years. Applying involved another terrible series of California state forms, with updates for each year. But once attained, it allowed forgiveness of $2000 of that student loan debt skimmed right off the top. So the hourly wage worked out well.

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Larger Societal Concerns

Now, all of this said, I know well that I’m not yet addressing the larger societal concerns that underlie the existence of these large student loans in the first place.

Contrast my experience with that of my then-sweetie when we were in grad school. He is a Swiss national. Once he passed a battery of tests proving his ability and desire, he received education clear through to the Ph.D. that not only was free, but he was paid a living wage to do it. He did not need to take six menial jobs in order to survive while studying. He could focus on his studies and thereby really get good at his field (which was theoretical astrophysics. As you might imagine, extended time to focus just on that was useful.)

The fact that most American scholars have to take out what amounts to a mortgage on our brains in order to gain higher education, particularly at the B.A. level, is appalling. It’s a national race to the bottom. Given the questionable economy and job market, fewer and fewer people are going to be willing to gain a liberal education under those conditions – and with good reason, given the squirrely economy and questionable job market. That trend is a detriment to us all.

Increasingly, students are being viewed as consumers rather than scholars or learners. The sort of education that is seen of most value focuses on technique: electrical engineering; MBAs. Don’t get me wrong. Technical training is a great thing. But it should not be the only education we value and seek. And tech edu should also have a component that builds human beings’ capacity for a better life, not just a bigger wallet.

Education should not be solely tied to current potential jobs.  We need a populace who is trained to THINK; to question, to seek meaning, not only to be good cogs in an existing economic structure. A liberal education is worth getting. It makes for a happier, fuller, more examined life. It gives you a fuller perspective on whatever is happening around and within you. And it remains yours forever.

The current constant-growth capitalistic structure will dramatically shift within the next thirty years anyway, because it’s not sustainable. Constant growth is the ideology of the cancer cell, not of a thriving living being or system. If American standards of consumption were to be exported everywhere at the current rate (as is increasingly happening), Lester Brown of the Earth Policy Institute conservatively estimated that it would take at least 1.5 earths to provide the raw environmental resources alone. So the indefinite continuance of “business as usual” is obviously not going to happen.  This means the available jobs will also change. There’s no guarantee that a job you train for today will even exist in ten years. Many of the top-paying jobs today, such as those in the tech industry, didn’t even exist in imagination thirty years ago. That field was pie-in-the-sky nerdville when I was a teen. So choosing a field of education based solely on current perception of its earning power may not ultimately pan out.

The consequences of making higher ed prohibitively expensive is that fewer and fewer American people are getting the kind of liberal education that helps one to make sense of life and to enjoy living it to the fullest.

It also means that fewer will gain the critical thinking skills that allow us to begin to understand whole systems and how to effect some change within them.

I suppose some politicians like this idea of keeping the majority uneducated in how to really think, because it means the people across the country will be more easily malleable and swayed, making their own personal wealth agendas easier to push forward. When reading the news, it’s always worth asking, who stands to gain from this situation? 

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Concluding Remarks

Anyway. While we have the situation we have, I applaud those of you who decide to educate yourself despite the hardship. Whether you do it via traditional schooling or by investigating on your own, the time and energy is worth it.

Education is one investment that can never be taken from you by others. 

And I hope that the small strategies I offer here for getting out from under student loan debt help you out as they helped me.

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