$347,000 in student debt who can't land a job...

Do I feel sorry for this guy? Yes, I do...kinda. There are some things that are beyond your control - but racking up $347K in school debt is a LOT of really, really, really BAD decisions. I feel this guy really banked on a lot of illusions and a lot of unrealistic "positive thinking" without taking into account his own resources. I did some quick math for doing a "zero to law degree" here in Ohio. 2 years at Columbus State Community College about $10K (not including living expenses) then 2 years at Ohio State $25K (not including living expenses) 3 years of Law School in Ohio with an average cost of about $39K/year (includes living expenses). even with living expenses for undergrad tacked on to that path you would most likely be at less than $200K out of pocket (in state) total, and that does NOT account for the numerous discounts they give you throughout your time - mini scholarships, dean's list awards, actual scholarships, grants, discounts, etc. I'm sure cost varies everywhere - and if he had a reason for picking those schools, like being able to live at home or whatever, I feel he should have been able to complete his path for about HALF of what he racked up. It's still expensive, but not as crushing. And then going into Social Work? Seems like he didn't have an overarching education/career plan and he would have benefited from some coaching. You don't know what you don't know...and you are YOUNG, and you believe a lot of things that simply aren't....well, I won't say TRUE, but LIKELY. That said, if he stays in public service for awhile, the government has programs to forgive some of the debt if they are federal loans, but he has probably set himself up for a lifetime of insurmountable debt. I will have my loans paid off when I hit 66 I think.

 

One thing I don't understand is why he's not eligible for Income-based Repayment (IBR) - and if he is eligible how come he's not taking advantage? IBR is the most common suggestion in these situations, for those with unmanageable federal student loans. You make payments based on a percentage of your income (10% of your discretionary income) for 25 years and your debt is forgiven. For someone who is expecting to have a low wage, this is the safest way to pay off the debt. If you make $50K a year as a public defender or social worker without dependents your payment is $247 a month.

After 25 years, you've paid $74,100 and the remainder is forgiven, albeit with a hefty tax bill owed. That too can be put onto a payment plan.

 

Would guess he has a large non-Federal loans, which are often not eligible for income based terms. Would mean he’s more likely to be able to include them in a bankruptcy, which may be his only option. Not sure if he can enroll in a random masters and roll the private loans into a new Federal loan that is eligible.

 

That's what I was thinking. Can you even rack up that much debt from federal student loans?

If they're private loans, yes, you're right.

I don't think you can roll private loans into the federal program.

 

I grew up with Depression Era parents who were lower middle class. We had most of what we needed, but not much more. I learned the meaning of affordable vs. the reverse.

I joined the Army in my senior year of high school (with delayed entry until after graduation) in part to get G.I. Bill benefits. After my honorable discharge I returned home and researched my college options. The local private schools all can with BIG costs... the local state college was very AFFORDABLE to the extent that with my G.I. Bill and a reasonable part-time job I could pursue a college education.

In the workforce I found myself working next to graduates from those expensive colleges. It did not seem to matter that my degree was from a less prestigious state college.

Ok, to be fair, I did not have high ambitions of practicing law or medicine. I had simple ambitions of working in reasonable jobs where I did better than my father in supporting my family. I achieved that with my state college education.

Reasonable ambitions must be weighed against affordability in post-secondary education decisions. My parents taught me the value of a dollar. Thus when the time came for me to invest in my education I did so within my means. Three college degrees with only one student loan for $2500, which was dutifully paid off, and I was able to retire at 54.

The issue here is making sound decisions coupled with a commitment to financial responsibility. If parents don't teach this, educational institutions should. I was required to take all kinds of courses in school to give me a well-grounded view of the society that I exist in. Sadly a course in financial responsibility was not amongst them. I have friends that admit that they will have to work until the day they die (because they did not save for retirement). I have others who complain about trying to pay for major repair bills who routinely live with creature comforts that I usually did without.

So where's the beef? Why did my parents take the time to teach me about financial responsibility and other loving parents don't? Why do schools shove a liberal arts education down our throats but ignore financial issues that could enhance our family livelihoods, careers and retirements?

Inquiring minds want to know!

 

20+ states include some form of personal financial education but the results have been mixed on whether those help or not. Parents teach their kids lots of things but many of those lessons stick. Telling people to make a budget and live within it is one thing, but actually affecting their behavior is a very different thing.

 

Plus, joining the military isn't even an option for everyone. If people don't know about forums like this, then even an "affordable" in-state college or university can lead to some hefty student loans.

 

I suppose you can lead a horse to water, but you can't make it drink...

 

True... but the G.I. Bill was only part of what I brought to the table...

However some employers provide tuition assistance... work full-time and go to school part-time...

 

Not everyone in the military gets the GI Bill. I entered and exited three times, all honorably, the last one a retirement, and never got it.

Active duty to reserve duty to active duty to active commission to retirement. Nothing. Ironically, I was an education specialist, a training manager, and an education and training officer for my career. I processed many applications for VA benefits, but never got them myself.

 

Then there is the discussion on college vs. the trades. Electricians and plumbers make good money... probably better money than I made with a college degree.

Financial decision-making is the issue here. How many of these kids graduate in debt up to their nose and wind up working in a job where no college is required?

If you don't have financial backing you go to work... save money... get on with a good employer who has tuition assistance... and attend an affordable college... or work in the trades and skip college...

 

A good portion of the latest trade generation have degrees. In some of the more specialized skilled trades, over half of many apprenticeship cohorts have bachelor degrees and there have been a few Fortune companies requiring degrees for apprenticeship eligibility. One of the most common models of Registered Apprenticeship Programs is approximately 45 credit hours of an associates degree, essentially all technical requirements and few Gen Ed courses. Hard to see them being an either or option these days, at least for me personally.

 

From what I see there is an increase in acceptance of skills and experince.
Google tried to market their skills certificates/ certifications as equivalent for Google jobs as meeting or waving the degree or at times as equivalent to degree requirements.

The trade schools or colleges can and still provide needed skilled employees.
For example a relative became a small airplane mechanic. His prior education is HS grad.
After his training as small engine airplane mechanic he got good job and developed in to controller and now we'll paid contractor, charging above 100$ per hour.

Another relative completed CIE certificate in Broadcast Engineering. This enabled him to get certified by SBE as CBT Broadcast Technologist.
He was granted payed internship on one of TV stations. Today he is a Sr Broadcast Engineer (Certified by SBE) at leading cable/TV/sports broadcasting org.

While I advocate a degree and good education I do realize that its not for everyone, and they may pursue it in another stage of their life.
It's well worth it.

 

An avowed refusal to pay student loans or even a history of making no effort will likely make getting a NM law license impossible on character and fitness grounds.

 

Maybe they should extend that to DRIVERS' licenses. The Province yanks those for non-payment of child support, where I live. I think that's why no-license e-bikes are so popular.

 

It sounds good on paper (at least at first), but it has the result of punishing those who are in a hard spot by making it even harder to get to work. They either have to risk getting pulled over and jailed for driving without a license (and losing the car permanently to the impound lot), or ensuring they can only work jobs they can walk/bike to.

Obviously someone racking up $300K+ in loans and then not paying them off is frustrating, but policy should be careful to not punish the person with $30K in loans who is just trying to get by.

 

We pull driver’s licenses for two financial reasons; child support and failure to satisfy civil judgments arising from the operation of a motor vehicle.

 

I was a certified broadcast technician in the early 1980s when I worked for an Albuquerque TV station. GREAT job, too, and my CIE diploma helped me get that job. Alas, I went to law school.

 

As an aside from the Mists of History, the CBT certification from the Society of Broadcast Engineers kind of replaced the old FCC First Class Radiotelephone License which the FCC abolished in 1981. That license was required to operate, adjust and repair commercial broadcast transmitters of every sort but it became the entry level credential for broadcast technology in general, not just transmitters. If you want to get into broadcasting on the engineering side, the CBT is a good thing to have even today.