This Is What $1.5 Trillion in Student Loan Debt Looks Like for Borrowers
Becoming a student is usually a hope-filled time. College freshmen are filled with dreams about how their studies might eventually translate to their “real” lives — or, at least, all they’ll learn about themselves along the way.
Few of those big-eyed students realize how overwhelming their decision to study might become over a lifetime. For students who take out education loans (which is to say, the majority), the buoyant experience of college can morph into an anxious and stifled adulthood.
Although college is sold as a time for self-exploration and an asset leading to eventual financial gain, the loans required to fund the experience can lead to devastating consequences down the line.
We talked to several borrowers who’ve discovered those consequences the hard way. Here are a few of the ripples their student loan debt still makes years later.
Student loan debt makes changing careers impossible
While most young college students have lots of ambition, they’re relatively short on life experience. Figuring out what you want to do for the rest of your life is challenging at any point, let alone when you’re 18 years old.
But when you’ve got student loans to pay, it’s difficult to change courses later if you figure out something suits you better than what you studied. Or the payments might corner you into taking a job outside of your field of study, just to keep up.
That’s what happened to Jessica Olsen, who studied interior design at Oregon State University. Even though she received grants and worked as a resident assistant, she still needed to take out about $30,000 in loans to complete her education.
Today, Olsen is an executive assistant at a media company earning about $45,000 a year. Though she’d like to get an interior design job, she knows she’d probably earn less at the entry level… and, besides, her portfolio is outdated since she’s had to focus on paying the bills.
Sarah King, a Nashville-based lawyer, also feels that her student loans have directed her career decisions. She went to law school in the first place after discovering the jobs available with her bachelor’s degree — a double major in fine art and English — wouldn’t make a dent in her debt.
She went to work on her J.D. at Western Michigan University’s Thomas M. Cooley Law School. At every step along the way, financial advisers and school representatives told her loans were just part of the package: “Everybody does this,” they said.
Even though she graduated in 2004, King still owes more than $110,000 on her student loans — much of which is interest she racked up while working a lower-paid role at a public defender’s office. She’d been aiming to wipe out her federal loans through Public Service Loan Forgiveness (PSLF)… only to discover she was ineligible. The program wasn’t as simple as it had been made out to be.
Today, King is 43 and finally transitioned to the private sector, where she can earn a bit more. But with a monthly student loan bill of more than $900, she still struggles with finances.
“I can’t make a career change at this point,” she said. “I can’t go back to school.” While her work as a lawyer is fulfilling, she feels cheated by the system that led her to take out so much debt in the first place.
It makes getting sick even harder
As life goes on, aging and illness aren’t ifs. They’re whens.
When you’re already struggling under mortgage-sized student loan payments, taking care of yourself — or paying for a professional to take care of you — is even harder.
King, for instance, suffers from an autoimmune disease. Even with relatively good government benefits through her public defender job, there were times she neglected to get recommended tests or medications due to expensive out-of-pocket costs.
Today, she gets health insurance through her husband, who stays at his job specifically for that benefit. It’s not his passion, she says, “but I really can’t afford not to have health insurance.”
Similarly, Olsen cites medical debt as one of the reasons it’s been hard to chip away at her student loans; she went without insurance for a while before she got her current job and needed some dentistry done.
Those procedures, along with a bout of bronchitis, meant Olsen had to put about $1,000 on a credit card. High credit card interest rates make it hard to get ahead of, which makes it harder to make larger student loan payments: one sick case of the chicken and the egg.
It doesn’t go away
James Boomhower knew he wanted to be a paramedic by the time he’d finished third grade. A friend got his eyelashes caught in the zipper of a jacket, and the way he felt while helping extricate him with a Leatherman knife and some patient teamwork stuck with him throughout his lifetime.
True to his vision, Boomhower works as a flight paramedic and EMS educator in Boston today.
“I’m blessed,” he says. “I absolutely love the work I do.” But getting there was expensive.
Boomhower started working as an ambulance paramedic right out of high school, earning his associate degree at the same time. To work as a critical care transport paramedic — the people who take care of folks lifted from accident scenes or hospitals onboard the aircraft — he’d need a bachelor’s degree.
The University of New England seemed like the perfect spot. It had a beautiful campus and the degree program he wanted, and he only had to be there for two and a half years. But that was enough time to rack up astronomical student debt from both public and private lenders, a balance that today hovers at more than $103,000 almost a decade after he graduated.
Paramedics are well-paid, and Boomhower says he makes a good living wage. But his payments are north of $1,100 monthly — in a part of the country where rent is about $1,700 on average. Like King, he found it wasn’t so simple to erase his debts with PSLF; to be eligible he’d have to make even higher monthly payments.
That’s “what frustrates me the most,” he says. “So many of us took this burden knowing we were going to be clinicians or first responders, and offer proof every year that we’re in public service.” But thousands of seemingly eligible borrowers have faced unexpected complications upon applying for forgiveness through the program.
Struggling with your own student loans?
Chances are, you know your own student-loan-based struggles — with a nationwide total of $1.5 trillion in educational debt, it’s a wide-spread problem.
But there are ways out from under the crushing burden. You might just need a little help to find it.
At Lexria, it’s our mission to give you the tools you need to find those exit strategies. For more information on how to find the fresh start you deserve, fill out our quick questionnaire.