About paying off student loans

Published

I completely get the impossibility of paying off 200K for an expensive non marketable degree and not being able to find a job, but I'm not fully understanding the issue with paying off a moderate loan when hired after graduation.

Comparing it to my loan, I graduated with $9,500 in debt and was hired at $10.50/hr. That creeped up of course but I initially made less than 25K/year. Compared to 104K now, that was very little income.

I was the sole earner, paid my rent, had a new but modest car, paid for my two kids (didn't even have maternity benefits on the first (the health insurance industry has never been a bed of roses), had a couple of horses and still paid off my loans in 10 years.

What I don't get is the primary reason why that doesn't work the same for anyone that graduates with student debt that is roughly half of their annual income these days.

I'm sure interest plays a part, but what else?

Do people just resent having to pay them back? They're cramping the new lifestyle norm?

Can someone explain this to me? Am I being dense?

Up Vote Up Vote ×
Specializes in Med-Surg, NICU.

Good question.

I think a lot of it has to do with people not doing their research before taking out student loans. They sign the dotted line without reading the document thoroughly or having a full grasp of how much they will be paying per month for x amount of years. Then, when they graduate, they are shocked at how much they owe and become overwhelmed.

Too many expect to be living the high-life right out of college and overestimate how much they will be making. New grads don't make what a seasoned nurse makes. However, when people do their research they only see the wages of nurses with some experience and they think they will make that amount. Not so!

And then there are those private lenders with their sneaky ways of increasing interest rates and hidden fees that creep on the unsuspecting student. I am assuming your loans were federal, right? The government has a more flexible repayment plan and is willing to work with students. Private lenders? Not so much, unfortunately.

Up Vote Up Vote ×
Specializes in Medical-Surgical/Float Pool/Stepdown.

On the other hand, there are posters that budgeted appropriately for their student loan debt and took out only what they needed to survive nursing school like me. I have about $20,000 in loans from both my ASN and BSN and can make the payments reasonably but what if there was a fairly easy way to help reduce my debt because of incentives passed for nurses that I may qualify for. Teachers and I believe other types of "public servants" qualify for breaks so why wouldn't I be being prudent by checking out my options that are already out there but not always advertised? I think some are looking for relief from overwhelming life sucking student loans and others are just not wanting to miss out on a deal if they can find one!

Up Vote Up Vote ×

Mine was federal, I could never have qualified for a commercial loan. Or credit card, it was different then. Mortgages were what? 18%?

i don't think there is anything negative about looking for options such as working them off, I was referring to the common resentful attitude about them.

My loan didn't interfere with anything because I never expected to buy a home or take vacations at that point. I didn't live in my 20's how I would be able to live in my 40's and it never occurred to me to be able to even though I had a college degree at 22 yrs old. I had things but my life didn't resemble what I see today, everything was much more modest. For example, anyone remember what baby showers used to look like? Mine was a potluck and cake at someone's house, my nieces were $30/plate luncheons for 30. Even the gifts were luxurious compared to what we used to give. Life after high school and even college looked different back then in comparable economic circles.

Anyway, that's a tangent but might be a part of the puzzle to me.

Up Vote Up Vote ×

There are a few reasons.

1. Most students don't do their homework before signing on the dotted line. They see the cost in 1 semester or 1 year increments, not as a entire whole. Plus they don't think about what a monthly payment will be upon graduation.

2. Secondly, a lot of new grads bump up their lifestyle when going from a delivering pizzas income to a nursing income. That includes a bigger apartment or house, a new car, some expensive gadgets. You wonder where your income is going when you have a loan payment, a car payment, and a house payment?

3. An increasing minority has somewhat of an entitlement mentality: big banks this, evil institutions that, the 1% etc.

4. Also, I think those of us that are buckling down and taking care of business have understood what we were getting into and are much less vocal. Probably because we have a plan, most likely because we know that ranting about it won't do anything to help anyways.

Up Vote Up Vote ×
Specializes in NICU, Trauma, Oncology.
Mine was federal, I could never have qualified for a commercial loan. Or credit card, it was different then. Mortgages were what? 18%?

i don't think there is anything negative about looking for options such as working them off, I was referring to the common resentful attitude about them.

My loan didn't interfere with anything because I never expected to buy a home or take vacations at that point. I didn't live in my 20's how I would be able to live in my 40's and it never occurred to me to be able to even though I had a college degree at 22 yrs old. I had things but my life didn't resemble what I see today, everything was much more modest. For example, anyone remember what baby showers used to look like? Mine was a potluck and cake at someone's house, my nieces were $30/plate luncheons for 30. Even the gifts were luxurious compared to what we used to give. Life after high school and even college looked different back then in comparable economic circles.

Anyway, that's a tangent but might be a part of the puzzle to me.

You said it ... You didn't live in your 20s the way you can live in your 40s. Today's generation are all about instant gratification and the newest greatest whatever. So they take out loans for education but then whine when they realize 1/3 to half of their income is going to pay it off making it nearly i possible for them to have a brand new car, fancy TV, newest iPhone, go on vacation, go out to dinner, drink high end beer, etc....

Up Vote Up Vote ×
Specializes in NICU, Trauma, Oncology.

Oh and don't get me started on all the expectations of baby showers, weddings, etc. It's all nonsense.

Up Vote Up Vote ×
Specializes in Case mgmt., rehab, (CRRN), LTC & psych.
I graduated with $9,500 in debt and was hired at $10.50/hr. That creeped up of course but I initially made less than 25K/year.
I assume you graduated nursing school in 1987 due to your username. Let me crunch a few time-adjusted inflationary numbers...

A $9,500 student loan debt in 1987 dollars would be equivalent a $19,630 student loan in 2015 dollars, and a $10.50 hourly rate in 1987 dollars is equal to a $21.70 hourly wage in 2015 dollars. A $25,000 annual income in 1987 dollars would be the same as a $51,655 annual income in 2015 dollars.

Back to the question at hand...I cannot explain the thought processes that occur in other peoples' heads, but I do think the propensity for immediate gratification plays a huge role. Many people in this day and age want it all right now and are unwilling to wait for events to unfold.

Up Vote Up Vote ×
Specializes in PACU.

I think a lot of the people that take out these huge students loans are definitely living in the now as opposed to looking at the bigger picture like others have stated. It's all about instant gratification without thinking about the consequences. I cringe when I see so many people willingly paying these for for-profit schools $100k+ for a bachelors degree for whatever their reasons are (I won't get into that) without looking on how it will impact them. Say goodbye to ever owning a home in most cases, or half your salary for the rest of your life. Do they even know what the interest alone is on that? Is it worth it? Not to me.

Up Vote Up Vote ×
Specializes in Family Nurse Practitioner.

And there is plenty of cyber hugs and support from those who espouse that there is such a thing as good debt, not just necessary debt, but good debt! Don't forget that no education should ever be considered a waste and don't worry about paying your school loans because it will be worth it if you have a career you love. I wish they would add don't worry about saving for retirement either because you won't be able to. :(

Warning I have clearly turned into one of those bitter old people who walked to school in the snow without shoes:

I was raised a million years ago and we were fairly poor. The good news is we were thankful for what we had and used everything until it broke and duct tape couldn't repair it. I continue to live fairly simply which has allowed me to have real estate holdings as well as a substantial amount of money in the bank. I do not however have a TV in every room, expensive furniture or a luxurious car. There are people for who their nursing job is their FIRST job. I can't even begin to wrap my head around that as someone who had to work from the age of 14.

The other thing I see with most of these mega school loan folks is they didn't work. I worked the entire time I was in nursing school, none of this "I'm going to focus on school" stuff. I did not have that luxury or desire to take a hit in my income. When I went to NP school I was making over $80,000 a year as a RN. In addition to using savings for tuition I only cut back my hours a little and made $70,000 a year while I was getting my NP. There doesn't seem to be an ability or desire to experience any discomfort now. I don't get it. I missed out on the silver spoon that is so prevalent today, even if parents truly can't afford it, but I think it might have worked to my benefit overall.

Up Vote Up Vote ×
Specializes in School nursing.

Research helps. I had to take a sizeable loan to go to nursing school. I knew that. I don't regret it. But I did my homework on salary expectations for the area of nursing I was interested in (school nursing won't ever pay the big bucks, but it does have many perks for loan purposes), possibly of loan forgiveness (taking federal vs. private loans), and how I could best reduce my monthly payment.

I talked with my loan servicing company and my dad (who happens to be an accountant) to see how I could swing this. Now, I know everyone doesn't have an accountant dad, but a loan servicing company can actually be very helpful - they want you to make payments, not dodge them. When I called them before my first payment was due, they helped me find an affordable payment route.

Up Vote Up Vote ×
Specializes in PACU.
Research helps. I had to take a sizeable loan to go to nursing school. I knew that. I don't regret it. But I did my homework on salary expectations for the area of nursing I was interested in (school nursing won't ever pay the big bucks, but it does have many perks for loan purposes), possibly of loan forgiveness (taking federal vs. private loans), and how I could best reduce my monthly payment.

I talked with my loan servicing company and my dad (who happens to be an accountant) to see how I could swing this. Now, I know everyone doesn't have an accountant dad, but a loan servicing company can actually be very helpful - they want you to make payments, not dodge them. When I called them before my first payment was due, they helped me find an affordable payment route.

See, you did everything right. You did your due diligence and you are paying up for what you signed on for. Seriously, I commend that. I am all for people taking out loans if they would just educate themselves and be realistic about the AFTER, like you have.

Up Vote Up Vote ×
+ Join the Discussion