About paying off student loans

TheCommuter, BSN, RN · Apr 16, 2015

I don't understand. Are you not working as an RN?

She is an LVN in Los Angeles County, where a survey recently revealed more than half of all residents spend over 50 percent of their incomes on housing. LVNs in the area have anecdotally dealt with wage deflation and sporadic scheduling for several years.

Ruby Vee, BSN · Apr 16, 2015

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?

Well, yes you ARE being dense. People who graduate these days are entitled to a brand new SUV (no modest cars for today's graduates!), to buy their own houses rather than live with roommates or take a crappy apartment to save money, to take wonderful vacations. Paying back student loans kind of interferes with these entitlements.

OK, I'm old and I've paid off my student loans long ago. But I'm still completely taken aback by some of the things I'm hearing from my new grad colleagues these days.

Ruby Vee, BSN · Apr 16, 2015

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.

I am also taken aback by how many of today's new graduates have never held a job before. I worked my entire life, and was self-supporting the day after I graduated from high school. I worked all through nursing school, and worked all through my Master's program as well. I took out education loans for my education only -- none of this taking out extra money to live on "so I can concentrate on school." And the cars I drove in college -- I rode a bicycle until I started clinicals and they were 30 miles away. Then I bought a used junker from an elderly couple -- I found it in the classified. No car loan.

Unfortunately, delayed gratification seems to be a thing of the past.

Ruby Vee, BSN · Apr 16, 2015

I think people take out loans at a time in their life when they are financially naive. If you had asked me at the age of 18 what the differences between a 30K, 60K and 90K a year lifestyle, I would not have had a clue. Loans can be just another big number without context to a young person who has never had to work to support themselves.

And perhaps that's the problem. A young person who has never had to work.

ixchel · Apr 16, 2015

I think generational differences exist due in part to the massive difference in the way money has influenced recent generations. My grandparents lived through wars and depressions, and they learned from experience that you need to be prepared for scary things to happen, including losing every penny you have. Fiscal responsibility was required because of the scary and real-life what-ifs.

Then there are the baby boomers. They got lectured on financial responsibility and preparedness for scary things that never happened as bad as it did for their parents. So all of the preparedness stopped happening and fiscal responsibility was no longer such an urgently required thing.

The end result? Baby boomers never taught gen X how to handle money. We're broke all the time from impulse buys. We don't sit down with a pile of bills, checkbook and calculator because we get text reminders that a bill is due, so we log in from our phones to pay it in one click. They should do one of those buzzfeed videos: Teenagers react to balancing a budget.

A lot of these new grads (the 21-year olds) never actually learned how to budget or handle money because mom and dad took care of those things so Suzy-Q would only have to worry about school. Sure, it helps and hopefully Suzy is showing some gratitude, but in the long run, she missed out on a huge right of passage/life lesson: how to live independently (but still have a safety net for now just in case of emergencies)?

I have a fantastic spreadsheet that I yanked from apple's version of excel. It's a full monthly budgeting tool, and you put all expected income and bills, and it'll calculate each month of the year so you can see to the penny where your money will go and whether you can say yes when your kid wants a video game. I'm happy to share it if anyone is interested. I let my kids mess around with it and they get to see how much things really are, and why we have to frequently say no to expensive things. Anyway, PM me. I'm happy to share!

(Sorry for yet another gigantic ramble!)

eroc · Apr 16, 2015

I don't get it. $10,000 for my ASN. And

The country will fall due to the idea of everyone deserves the same rewards. Not everyone "earns" a trophy, but they do take the ones I have EARNED and GIVE it to people that don't have any idea as to how to earn it.

"Loan forgiveness" is a statement we should be embarrassed to know that it is now a acceptable phrase.

The fact that it doesn't embarrass people to openly state they don't want to keep their word shows the morals of our society. The blame game gets old, as it is not an credible excuse. Stating ignorance ("I didn't know") does not mean you should get a pass. You lack of planning should not be my problem, nor is it the problem of the person you promised to pay backâ€¦.no one held a gun to your head.

I personally get sick to my stomach watching people I know post on FB about trips to the salon, vacations, starting their master's programs. The very same ones I have heard on the phone with debt collectors stating they just have "no money" to pay back their student loan. Sad thing is I can hear in their voice that they really believe their own lies.

brandy1017, ASN, RN · Apr 16, 2015

I think personal finance should be taught to all high school students before they can even sign up for student loans and an additional personal finance course in college wouldn't be bad either! I don't think we can blame excess student loan debt just on students, there have been enough exposes of shady for profit colleges recruiting people into worthless degrees and lots of debt and even mainstream colleges who were bribed to steer students to a particular lender. I've read all the crap Sallie Mae has done and excess fees, yet in spite of this knowledge the govt still keeps them as a a main loan servicer. There are other problem loan services, but Sallie Mae comes to mind because they conveniently bought out my loans without my permission, this from Citibank who had taken my loans from GLHEC.

It boggles my mind the lack of consumer protections we have where student loans are concerned! No bankruptcy options, statues of limits, ability to garnish social security and disability, take away a person's license to practice, etc! There are many jobs that require a license not just nursing, even a beautician needs a license. I highly doubt all these dangers are ever told to anyone signing up for student loans at that time. They only find out later, when they are in default and it is too late! If you default they tack on a 25% fee and all the capitalized interest essentially doubling or even possibly tripling the original debt. When you are in forbearance, the interest is being capitalized and the debt is growing. It disgusts me and I'm just glad I'm not going to school now when tuition is growing far beyond inflation and is out of control, yet wages are stagnant. I think bankruptcy options should be restored as well as the ability to refinance when rates go down.

It took me 23 years to pay off my loans and I never defaulted and always made my payments on time. There were times I regretted going to college due to the high loan payments and felt I would have been better off staying as a secretary. Then find out some new grads got tuition forgiveness from the hospital, while current employees didn't and others qualified for govt forgiveness, while I worked at the same hospital but didn't qualify for that either. Granted the hospital no longer gives tuition forgiveness, but it is frustrating to pay a student loan for decades and I'm sure there are many who will be in the same boat!

ElleWoods · Apr 16, 2015

I myself will have to take out a decent amount of loan as well as my mom for plus loans in order to get through nursing school. I will be taking out 6k loans for my first year while my mom has to take out 9k in plus loans. Fortunately all of my loans are federal and not private.

I think the problem is most students don't have a plan for the future with loans. Most students think they can get a high paying job easily and live on their own and not have to worry about their loans. I have sat down with my mom stating that once I graduated, it is most possible I was still living with her so I didn't have to worry about rent and most of my income can go to my debt as well as helping my mom pay back her part.

My private university happens to give a huge amount of aid to those who do pretty well in school so I plan on getting good grades while also applying to outside scholarship programs to relieve some of the tuition fee so that my parents wont have to burden themselves with loans.

Libby1987 · Apr 16, 2015

Are you salary then? I was under the impression that home health pays piecemeal ie a flat fee per case where your experience didn't matter and everyone was basically getting the same pay.

No, I'm paid per visit plus hourly for some hours.

I don't know about getting the same pay, historically my company didn't but I've encouraged it in my office to attract quality nurses who want to make a career out of it. When you're new, you can't make as many visits/manage as many patients as someone experienced in all of the aspects of HH.

I've worked in HH since 1988 and essentially grew up in it. It's been a very good career.

joanna73, BSN, RN · Apr 16, 2015

On another thread, a poster commented in response to me, essentially stating, "Well you need a cell phone!"

Actually, no you don't. We've grown accustomed to cell phones in addition to many other gadgets. I used only a cheap land line in nursing school to save money, which was the point of that post.

Not_A_Hat_Person, RN · Apr 16, 2015

A big part of it is the fact that the nursing job market is still awful, especially for new grads. Conventional wisdom says you shouldn't borrow more money than you expect to make your first year, but no one expects to make $0 (unemployed) or $14,000 (a year of full-time work at minimum wage) in their first year after graduation. Wages have stagnated for years, while the cost of college continues to rise far faster than inflation.

The problem with "do your research" is that the data lags what's happening in the field by several years. The ANA still claims there's a nursing shortage. MSNBC had a story yesterday about a reported surge in demand for college-educated employees. Data in the study cited, by Georgetown University, ended in 2007.

I'm one of the many who started nursing school during the famed shortage, and graduated just before the economic collapse of 2008. facilities that were actively recruiting nurses when I started school had hiring freezes when I graduated. No one wanted new grads. Even nursing homes wanted a year of experience. Ten more months working in a call center didn't make much of a dent in $22,000 of student loan debt (and I attended public schools, didn't own a car, and didn't take vacations). I managed to pay off my loans, but they prevented me from buying a home and starting a family. Seeing the big banks that crashed the economy get bailed out did not make things easier.

I'm considering a BSN. My local state U charges $600 per credit in-state. The local community college, where I plan to take some pre-reqs, charges $275 per credit. The public RN-BSN program I'm looking at charges $1,150 for a 3-credit class. My employer has a very limited scholarship program.

Eventually, the student loan crisis will come to a head. It's happening in the legal field. Very high student loan burdens combined with a lack of jobs has led to an enrollment crisis. Law school applications are declining rapidly, and some law schools are in danger of closing.

Not_A_Hat_Person, RN · Apr 16, 2015

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.

I assume you graduated in 1987. College has gotten a lot more expensive since then. I got a BA at a public urban college in 2004, and tuition at that school literally doubled in 10 years. The community college where I got my ADN cost $240 per credit by the time I graduated in 2008, just before the economic collapse.