Into The Black
July 29, 2016 12:48 PM   Subscribe

I've nearly paid off $16,000 of student loan debt, but it cost me my friends This is the fourth installment of the series Into the Black , where we hear from people who found ways to pay off serious debt. This week we talked to Kyle Pendergrass, whose debt management has improved his mental and physical health, but who lost some friends in the process.
posted by Michele in California (88 comments total) 26 users marked this as a favorite
 
When I lost all my money and my job about 10 years ago (I lost my car, then my house, and then was so deeply in debt for taxes and debt based on that house and loss of jobs that I was terrified), I pretty much became a total recluse from everybody. It wasn't just that I was trying to save money, but the shame in having no money at all, and feeling like it was entirely my own fault.
posted by xingcat at 12:52 PM on July 29, 2016 [31 favorites]


I set a strict budget: $755 a month for rent, $500 for food and alcohol, $140 for gas. I cut out all unnecessary expenditures—video games, clothes. That left me with $800 a month to put toward my debt. That means I had been wasting $800 a month on superfluous expenditures.

O, reason not the need! Our basest beggars
Are in the poorest thing superfluous.
Allow not nature more than nature needs,
Man’s life’s as cheap as beast’s.
posted by praemunire at 12:59 PM on July 29, 2016 [24 favorites]


There are other entries in the series that started with a much larger debt load if $16k is not a big deal to you. Perhaps you would care to read about I Married Into $100,000 of Student Loan Debt, but We Escaped Together or I Went From $80,000 in Debt to a Net Worth of $200,000 in Six Years
posted by Michele in California at 1:12 PM on July 29, 2016 [5 favorites]


$16,000? Whoop de fucking do.

Everybody's gotta start somewhere. Not many people get all $100k of their $100k loans in one swell foop. There's always that first $1000, then the next $5000, then $10,000 for this, and $7,000 for that. And you could stop at any point, but you don't. And by the time you start to pay attention, you owe 6 figures and have no hope of ever repaying it.

Of course, the lenders know (or would know if they cared to look) that you have no hope of ever repaying it. They don't care, because student loan debt is not dischargeable. They're gonna get dey money, or you gonna die owing it.

If they had to underwrite student loans like other kinds of loans, far fewer people would end up in the holes that far too many people are in right now.
posted by spacewrench at 1:14 PM on July 29, 2016 [18 favorites]


I'm in the just sub $100,000 camp (recently got it to five figures which I genuinely celebrated), but I make decent money. $16,000 is a huge amount if your annual pay is $22,000.
posted by Bulgaroktonos at 1:16 PM on July 29, 2016 [23 favorites]


I was looking at my student loan debts this afternoon, which I set on graduated repayment after law school and haven't really thought about seriously since. I have five loans at different interest rates that the organization I consolidated with just takes one payment for. Three of those loans are from undergrad, one of which was originally for $2,625 in October of 1996. Current balance due: $1,904.09. Just shy of twenty years and I've managed to pay off a whopping $720.91. That is kind of depressing.
posted by ND¢ at 1:19 PM on July 29, 2016 [10 favorites]


Everyone in this series currently makes $50,000 or more, which would seem to be key to escaping student loan debt. Don't take out college loans if you don't expect to make at least that much from your degree, I guess...
posted by subdee at 1:24 PM on July 29, 2016 [14 favorites]


I remember my son -in-law calling anyone in college in a Pell grant a 'welfare rat' that still upsets Hell out of me. Not everyone can pay their way, not everyone even qualifies for a loan.
People near and dear to me are saddled with college debt, and no correspondingly wonderful jobs to show for it.
posted by Katjusa Roquette at 1:24 PM on July 29, 2016 [16 favorites]


If they had to underwrite student loans like other kinds of loans

If they underwrote student loans like other loans, almost no one would get them. Student loans are in themselves a bad solution for the basic problem of providing the services essential to the attainment of adult economic independence. In civilized societies, we recognize that this kind of problem calls out for state funding. Here, we get an absurdly kludgey and exploitative system.
posted by praemunire at 1:26 PM on July 29, 2016 [62 favorites]


I just made the 75th of my 120 payments towards Public Service Loan Forgiveness. The first borrowers will become eligible in October, 2017. I need the program to last until April, 2020. I live in abject fear of the forthcoming headlines on FOX and WSJ, "Government Lawyers Forgiven Millions in Student Loans" which could lead Congress to end the forgiveness plan. Or a Republican controlled Congress which could end it just out of spite for government employees. One of Paul Ryan's Catfood Budgets already proposed capping the amount of forgiveness at something absurdly low, like $56,000. That's less than 1/4 of what I owe, with loans in negative amortization.

This has been "Don't go to law school: Part XXVI"
posted by T.D. Strange at 1:29 PM on July 29, 2016 [26 favorites]


If they underwrote student loans like other loans, almost no one would get them. Student loans are in themselves a bad solution ...

True, but the fact that they exist, and are not dischargeable, drives a large portion of education inflation (I believe, though I am not an economist). So the current situation is allowing lots of people to dig themselves into holes, and the first step in getting those people out of the holes is for them to stop digging. If there's no downside to lenders to continuing to provide shovels to people, then they're going to keep providing shovels. Telling students not to take the shovels isn't working, so perhaps we should reduce the reward shovel-providers can reap, as a first step at getting people to stop digging.
posted by spacewrench at 1:30 PM on July 29, 2016 [5 favorites]


I came out of college with a similar amount of debt, about $20,000. My experience was vastly different -- I was making a much higher salary right out of school, so I was able to pay off my loans in just a few years.

Many years later, I've gone back to grad school, so I'm making ~$30K. I can afford to do that because of all those intervening years of income. But the order I find myself doing all this in is not a great way to launch a serious academic career -- I'll be in my 40s by the time I've got my PhD.

I don't know how we expect people to do this. But we need them to! Even beyond the people who just can't find high-paying jobs after college, we need a certain number of people to voluntarily take low-paying jobs after college (like going to grad school) for the benefit of everybody.

If we don't start helping people pay down these debts, I'm worried that only rich people will do that.
posted by gurple at 1:31 PM on July 29, 2016 [5 favorites]


The ramifications of taking out loans were never explained to me in actual dollars-and-cents terms. I was never told, “If you take out X much in loans, at Y interest rate, you’re going to end up paying Z in the future.”

Is this true? Did they change laws or something? In 1998 I had to go through "financial counseling" where they explained this very clearly. If I didn't complete it, they wouldn't disburse my loans. Maybe private lenders don't have to do this upfront? Or is he just saying he didn't understand it, because he was young/immature?
posted by AFABulous at 1:34 PM on July 29, 2016


$500 for food and alcohol

I don't want to nitpick his budget or second guess him but does this seem absurdly high for one person, or is it just me?

posted by AFABulous at 1:40 PM on July 29, 2016 [9 favorites]


Telling students not to take the shovels isn't working, so perhaps we should reduce the reward shovel-providers can reap, as a first step at getting people to stop digging.

And, in the meantime, if you happen to be a bright kid from a poor family who'd like to go to college, too bad, I guess?
posted by praemunire at 1:42 PM on July 29, 2016 [7 favorites]


"Don't go to law school: Part XXVI"

Well, if you do go, don't drop out. You'll still have the loan burden, but without any notable credentials toward paying it off. Ask me how I know.
posted by kevinbelt at 1:43 PM on July 29, 2016 [12 favorites]


Everyone's experience is different, but they're always willing to bury the legal disclosures in exciting optimism.

When I entered college in 1999, there was a shortage of folks in IT, and it was a given that anyone with a degree in Computer Science could get an entry level job at $50K at the lowest. That made my student loans seem like peanuts.

By 2003 when I graduated, the dot com bubble had completely burst, and the available positions were unpaid internship and "requires 5 years experience with X." Working at Starbucks for the next 1.5 years made my loans seem quite onerous.

I understand now that they were all but scamming me (though I paid less for college than many), but at 17, I was excited and was willing to believe that's how the world works.
posted by explosion at 1:44 PM on July 29, 2016 [12 favorites]


I don't want to nitpick his budget or second guess him but does this seem absurdly high for one person, or is it just me?

If you think of that as his grocery and entertainment budget rolled into one, and he lives in a city, probably not. Especially if he actually eats fruits and vegetables (admittedly, he doesn't read like the type).
posted by praemunire at 1:45 PM on July 29, 2016 [8 favorites]


The ramifications of taking out loans were never explained to me in actual dollars-and-cents terms. I was never told, “If you take out X much in loans, at Y interest rate, you’re going to end up paying Z in the future.”

This is the part that bothers me about the idea that "financial literacy" is the key to avoiding crushing debt. X, Y, and Z, at least at the amount of debt that he had, are completely dwarfed by the factor of whether or not it's possible to find a good job after graduation. But nowhere do we hold the employers and the media and the politicians who talk about "skills shortages" accountable for promulgating the idea that if you just go into a "high-demand" area (as many of the graduates in this series did), you'll be able to find a job that pays well and uses your education.
posted by Ralston McTodd at 1:47 PM on July 29, 2016 [6 favorites]


I think $500 a month would be a lot if all you were eating was home-cooked food, but it sounds like he's still eating out a fair amount. He's just making sure to do it within his budget, rather than doing it without even thinking about it.
posted by ArbitraryAndCapricious at 1:54 PM on July 29, 2016 [6 favorites]


Don't take out college loans if you don't expect to make at least that much from your degree, I guess...
I think it's easy to be glib about this, but there are some traditionally low paying but absolutely vital professions that require Master's Degrees in order to receive professional certification in many states. Say, teachers and social workers.
posted by xyzzy at 1:57 PM on July 29, 2016 [43 favorites]


I don't want to nitpick his budget or second guess him but does this seem absurdly high for one person, or is it just me?

depends where you live. Where I am I could see $500 not going very far, but I guess I haven't been buying for just 1 person in a while so I'm not sure.
posted by Hoopo at 2:01 PM on July 29, 2016 [2 favorites]


My favorite thing in the world is the honorable Tribe of Debtsplainers who, always, are confident they have wisdom to dispense to you and that you must receive it, preferably trembling, with bowed head and on bended knee. Some of those bits of golden debtsplainer wisdom always include:

(1) You should never have taken out a loan in the first place

(2) If you can't pay it back, something's wrong with you, and you need to cut back and start eating rice and beans mixed with cat food to do your due penance

(3) You must be a filthy hippie/communist if you believe that non-dischargeable debt should be made dischargeable

(4) Nobody held a gun to your head and made you pursue a degree in [fill in the blank]

(5) Debtors' prison -- why can't they bring that back for you scummy lowlifes?
posted by blucevalo at 2:02 PM on July 29, 2016 [80 favorites]


subdee: Everyone in this series currently makes $50,000 or more, which would seem to be key to escaping student loan debt.

Yep. I'm lucky to be on the saving side instead of the loan payback side of the equation, but it's amazing how much my saving accelerated for each dollar my income went over $50k. (Okay, not amazing, just math, but it felt amazing.) Eating rice and beans and living in basements can only take you so far; it cannot magically multiply the spare money you have to pay off loans beyond your actual income.
posted by clawsoon at 2:05 PM on July 29, 2016 [17 favorites]


I am thankful everyday that I avoided student loans, but it wasn't because I was a good, smart planner. In fact I did something that was, at the time, not considered to be the wisest option to maximize my lifetime earnings. I was absurdly lucky to get a good paying full time job in 1996, one year after high school, that offered tuition reimbursement for a wide range of degrees. I know my mother was disappointed that I didn't go to school full time and never finished. The prevailing wisdom was that a four year degree was required to make decent money. I have had a good job for 20 years now that has taught me so much more than I learned in high school and college, mostly because it is a union shop and my location was spared from several rounds of layoffs. If I'd gone to college, I would have tried for a BS in Computer Science and hit the job market in 99 or 2000. I will always feel that I dodged a real bullet by being employed throughout the dot com bubble. Mom is no longer disappointed, by the way.

People are bad at predicting the future. Some are lucky and some are unlucky. Let's stop punishing people for being unlucky.
posted by soelo at 2:11 PM on July 29, 2016 [29 favorites]


$500 a month is about $16.67 a day. One meal out and you've used up half of that; one drink out and you've used up a third.
posted by thecaddy at 2:12 PM on July 29, 2016 [16 favorites]


If they underwrote student loans like other loans, almost no one would get them. Student loans are in themselves a bad solution for the basic problem of providing the services essential to the attainment of adult economic independence. In civilized societies, we recognize that this kind of problem calls out for state funding. Here, we get an absurdly kludgey and exploitative system.

Right, which would be a good thing. College has been the subject of weird middle American inflation, where everyone must go to college. In reality, that's not a prerequisite to a successful life or career, and hasn't ever been. But that push has certainly given rise to predatory lending.

If going to college doesn't increase your salary in a way that pays for your degree, you shouldn't go! There are a million other life experiences you could be exposed to that would make you just as well rounded or educated of a person without saddling you with undischargeable debt. Too bad we can't escape the stigma of college = good, no college = bad.
posted by so fucking future at 2:19 PM on July 29, 2016 [2 favorites]


And, in the meantime, if you happen to be a bright kid from a poor family who'd like to go to college, too bad, I guess?

Not everybody gets to fulfill their destiny or live up to their best, brightest hopes. And that happens for a number of reasons, some of which can be ameliorated, and some of which can't. Furthermore, you have to balance that bright kid against the lives ruined by crushing debt. A system that lets the bright kid go to college, but requires that 10 or 100 others be disillusioned and ruined... Is that the system we should have? Because it looks to me like that is the system we do have.

To be clear, I'm not advocating any particular balance of "one bright kid to n ruined kids," although I think allowing student debt to be discharged would rein things in usefully. But you can't ignore the flip side to "every bright poor kid should be able to go to college," which is "every other kid should be able to go to college too, regardless of whether it's a good or sustainable choice for them."
posted by spacewrench at 2:19 PM on July 29, 2016 [4 favorites]


The other side of this is that spending so many years paying off loans means no money going towards retirement. So this debt resonates (on an individual and a societal level) far beyond the time it takes to pay it off.
posted by mcduff at 2:20 PM on July 29, 2016 [14 favorites]


Because my wife is a uni prof we spend a lot of time with grad students and post-docs and you can see the financial train-wrecks that are coming. Unlimited financial support via loans with no short term consequences leads to really horrible long term outcomes. These kids eat out all the time and eat out well. I have no idea all how they can do it because even with a top 10% household income we can't do that! Unless we want to eat dog food when we retire.
posted by srboisvert at 2:20 PM on July 29, 2016 [5 favorites]


Or buying a house, or a car, or having kids, etc, etc, etc
posted by T.D. Strange at 2:21 PM on July 29, 2016 [4 favorites]


He beats himself up for getting a better paying job and not promptly prioritizing paying down the debt. Instead, he took care of himself for a while and did a bit of living. I am guessing that is why he was able to eventually make this a priority. I think a lot of discussions completely overlook or vastly underestimate the toll it takes on a person to live hand to mouth for a long time. You get nutrient deficiencies that you aren't aware of. You get physically tired. Etc.

To me, it is just logical that he spent some time "indulging" himself and then one day suddenly had the wherewithal to make this a priority.
posted by Michele in California at 2:21 PM on July 29, 2016 [29 favorites]


thecaddy: One meal out and you've used up half of that; one drink out and you've used up a third.

I eat out once a week. I don't drink. The bill for me - after taxes and tip - is usually $20, and the bill for my friends who do drink is usually $30-$40.

I am lucky not to have a taste for nice steaks or tasty cheese or alcohol or nice clothes, because any one of those things has the ability to completely blow a budget.
posted by clawsoon at 2:23 PM on July 29, 2016 [5 favorites]


Not everybody gets to fulfill their destiny or live up to their best, brightest hopes.

Flip thing to say when it's not you or your kids.
posted by praemunire at 2:24 PM on July 29, 2016 [25 favorites]


Don't take out college loans if you don't expect to make at least that much from your degree, I guess...
The average 18-year-old has literally no idea of how much he or she can expect to make after college. Literally none. We, as a society, give them no tools to figure it out. It just pisses me off that we blame people for not magically knowing stuff that we make no effort to teach them.
posted by ArbitraryAndCapricious at 2:24 PM on July 29, 2016 [62 favorites]


$500 for food and alcohol

I don't want to nitpick his budget or second guess him but does this seem absurdly high for one person, or is it just me?


It depends where you live. I live alone in Seattle, almost never eat out, almost never drink, cook at home regularly though I'll be the first to admit I rely too much on prepared foods--and my food budget tops $560 a month.

Some places are just really expensive to live.
posted by los pantalones del muerte at 2:31 PM on July 29, 2016 [10 favorites]


College has been the subject of weird middle American inflation, where everyone must go to college. In reality, that's not a prerequisite to a successful life or career, and hasn't ever been.

Dear God, I yearn for the day when this weird fantasy (of primarily non-high-school gradutes) that high school graduates can just work noble jobs with their hands "in the trades" and build a solid economic future dies.

The median weekly earnings of a high school graduate in the US in 2015 was $678. Their unemployment rate is 5.4%, nearly double that of those holding bachelor degrees. During the worst of the recession, unemployment for high school graduates touched 10%.

Whether or not most middle-class jobs should require a college degree...now they do.
posted by praemunire at 2:35 PM on July 29, 2016 [29 favorites]


If going to college doesn't increase your salary in a way that pays for your degree, you shouldn't go!

There are certain professions that I think of as crucial to society that do not, for the most part, pay well, but that require a college degree. Journalism, science, government, teaching. I do not want the next generation of people in those professions all to have come from affluent backgrounds.
posted by gurple at 2:35 PM on July 29, 2016 [14 favorites]


He lost some shitty "friends."
posted by Ideefixe at 2:38 PM on July 29, 2016 [5 favorites]


praemunire: Flip thing to say when it's not you or your kids.

That not everyone gets to fulfill their destiny or live up to their hopes could be flip, or it could be hard-won subcultural knowledge that you're determined to pass on to your kids because you and people like you have learned that earning a living can be a hard thing. Dream-chasing can be a deep pit if your family doesn't have the social or cultural or economic capital to bounce you back up if your dreams don't work out.

I finally got around to reading "A Room of One's Own" recently, and its central point fits: Creative, fulfilling work is much, much easier if you have a steady income that you don't have to scrabble or grind for. We've taught people to follow their dreams using debt in place of steady income, and it's a poor substitute.
posted by clawsoon at 2:42 PM on July 29, 2016 [6 favorites]


Don't take out college loans if you don't expect to make at least that much from your degree, I guess..

It's unreasonable to expect an eighteen-year-old to accurately predict the future job market or to have the tools to make this evaluation. We don't help them.

This is especially true for under-privileged eighteen-year-olds, who are less likely to have family experiences or family wealth to draw on. We really don't help them.

But also, while we scold kids for choosing to go to college when it's so expensive, the earnings gap between college graduates and those who only have a high school diploma is widening. High school diplomas are becoming less and less valuable. Fewer and fewer jobs accept them as their minimum credential.

College graduates have to deal with real hardship. Their degrees don't guarantee financial security. But high school graduates have it even worse.

"Trade school," people say. That's a good choice in many cases, and we should educate more students about this option, but not everyone can go to trade school. And the trades are under attack, too.
posted by Kutsuwamushi at 2:42 PM on July 29, 2016 [20 favorites]


These kids eat out all the time and eat out well. I have no idea all how they can do it

I can only speak directly to my own experience, but I distinctly recall looking around my grad school cohort and realizing that I was the only one living strictly off her own resources. Everyone else was married or had family support.

But, then, it also often turns out that one's anecdotal perceptions of others' consumption turns out to be inaccurate.
posted by praemunire at 2:43 PM on July 29, 2016 [12 favorites]


It sounds like we have at least two ways we can tackle this problem in addition to changes to the student loans themselves: lowering tuition and increasing the number of jobs that don't require a degree.
posted by soelo at 2:44 PM on July 29, 2016 [5 favorites]


That not everyone gets to fulfill their destiny or live up to their hopes could be flip, or it could be hard-won subcultural knowledge that you're determined to pass on to your kids because you and people like you have learned that earning a living can be a hard thing.

"Stay in your place" does indeed have a long history, and the government's seeking to enforce it does, too.

We can do better.
posted by praemunire at 2:47 PM on July 29, 2016 [17 favorites]


Kutsuwamushi: the earnings gap between college graduates and those who only have a high school diploma is widening

It's also true that people with poor parents get a much smaller income bump from going to college. The theory is that you're going into debt for college because it'll raise your income, but the people who need debt the most in order to afford college are the ones who'll get the smallest monetary benefit from going to college, and thus have the most difficulty paying off their college debt.
posted by clawsoon at 2:48 PM on July 29, 2016 [4 favorites]


I distinctly recall looking around my grad school cohort and realizing that I was the only one living strictly off her own resources. Everyone else was married or had family support.

I'm a couple years into grad school as a non-traditional (read: old) student, and this resonates. I have a classmate who's looking to buy a house in Seattle, at age ~25, with family resources. That's great for her! And great for the students that she plans on renting space in that house to at below-market rates. I'm glad she's able to do that.

But the proportion of wealthy students like her in my program, at least from what I can gather, is dismayingly higher than the proportion of wealthy 25-year-olds in the population.
posted by gurple at 2:51 PM on July 29, 2016 [2 favorites]


Whether or not most middle-class jobs should require a college degree...now they do.

Absolutely -- but that's because of the collective fever dream that "everyone has to go to college".

Chicken and egg, and all that, I don't pretend to have a great solution. I think moving away from trying to shove everyone through expensive schooling is probably not a bad idea.
posted by so fucking future at 2:52 PM on July 29, 2016 [1 favorite]


It's unreasonable to expect an eighteen-year-old to accurately predict the future job market or to have the tools to make this evaluation. We don't help them.

Which is exactly why making student loans dischargeable debt is a good idea. Suddenly someone is going to be a *lot* more invested in examining the financial realities of degree cost vs. earning potential.
posted by so fucking future at 2:54 PM on July 29, 2016 [7 favorites]


What if employers had to publish statistics on whom they hire and why, much like institutions of higher education do? There is endless commentary about how college admissions standards are too exacting, but companies' hiring rates are just a force of nature. Perhaps we could tell graduates that the ABC Corporation, looking for employees in a field for which there is currently a "shortage", offers positions to 0.5% of applicants with a degree in X field from a Y-ranked university, and that 50 percent of these have a personal connection to someone at the company.
posted by Ralston McTodd at 2:58 PM on July 29, 2016 [3 favorites]


Well, damn. I'm screwed then. I took on my wife's college loans, they can't be discharged, and we can't get it together enough to work things out civilly. God, why did Bush twist that knife in our backs with those bankruptcy reforms!?
posted by saulgoodman at 3:11 PM on July 29, 2016 [1 favorite]


It's a lot more than $16,000 in my case...
posted by saulgoodman at 3:12 PM on July 29, 2016 [2 favorites]


...a bright kid from a poor family...

♬ Spare him his life from this monstrosity. ♬
posted by fairmettle at 3:18 PM on July 29, 2016 [13 favorites]


But the proportion of wealthy students like her in my program, at least from what I can gather, is dismayingly higher than the proportion of wealthy 25-year-olds in the population.

Wait until you get an actual faculty position. I live in NYC, and literally every single one of my young colleagues has bought an apartment with family money. I make more than them (been there longer plus I've wrangled some raises) and they just look at me blankly and/or quizzically when I complain about being shut out of the housing market here. It's like not coming from an upper middle class background doesn't compute. Having grown up poor makes me a real outlier.
posted by overhauser at 3:20 PM on July 29, 2016 [13 favorites]


$500 a month for food and alcohol.

I know it's just me, but I can't imagine a food budget where you have to include "and alcohol."
posted by lhauser at 3:33 PM on July 29, 2016 [3 favorites]


If you buy your beer and such at the grocery store with your regular shopping and look over your budget based on the charges to you card/account, then it's really hard to separate the alcohol from food.
posted by Zalzidrax at 3:36 PM on July 29, 2016 [3 favorites]


He lost some shitty "friends."

These things are sometimes more complicated than that. I mean, what if a lot of your friends are from cycling or some rec league, and your bike gets stolen and you don't want to pay to replace it, or you don't want to pay the league's fees anymore? You might not see those friends as much after that, and I don't think anyone would blame them too much for being superficial and disloyal, but there's this weird puritanical thing when it comes to money spent on pure pleasure like restaurant meals or alcohol.
posted by Ralston McTodd at 3:53 PM on July 29, 2016 [6 favorites]


My co-workers helped build College Scorecard to provide more information for students about costs of schools, loans and salaries, broken down by income band. It doesn't solve the problem, but at least provides more data.
posted by lorimt at 4:00 PM on July 29, 2016 [6 favorites]


And also, if many of these friends are living with parents, roommates, or in studios, they may have a hard time hosting get-togethers at home and fall back to bars and restaurants. In which case you've got to pay for a meal or a drink to be allowed to gather in the space.
posted by town of cats at 4:03 PM on July 29, 2016 [3 favorites]


Ultimately I think that addressing education and employment in America must be a multi-pronged effort, but one of the most important pieces of that effort is stressing that a college education does not necessarily have to take place at a single institution the moment one graduates from high school. This push to get 18 year-old kids with barely mature lizard brains to figure out What To Do Forever via the modality of major/degree selection is patently ridiculous. And while I greatly value multi-disciplinary education, there is literally no reason for students to get those general education credits at a large university. In the SUNY system that I (mostly) attended, community colleges have generous agreements with four year state universities that allow all Gen Ed credits to transfer directly and without penalty. The amount of money that can be saved by never being forced into college residency is astonishing.
posted by xyzzy at 4:10 PM on July 29, 2016 [6 favorites]


The average 18-year-old has literally no idea of how much he or she can expect to make after college. Literally none.

When I borrowed money for undergrad I was told by my financial aid officer that I should expect to make at least $60,000 a year when I graduated, so my astronomical loans made sense. I remember this figure so vividly, because of what an absurdity it seems now. I graduated a just before the recession hit. My first job was at Chipotle. I made 8.25 an hour.
posted by Lutoslawski at 4:11 PM on July 29, 2016 [16 favorites]


I know it's just me, but I can't imagine a food budget where you have to include "and alcohol

Please enjoy this Moral Superiority point, or something.
posted by Lutoslawski at 4:13 PM on July 29, 2016 [38 favorites]


Oh my god, is this the thread where I can talk about how I'm $80,000 in debt because I got a predatory loan when I was 24 because it was either that or drop out at the last second and be homeless? That one loan isn't the whole $80,000, but it helps. The interest rate is 11%. That is criminal. I was young and panicked. It should not have been legal for effin' Citibank to take advantage of me like that. And then I dropped out anyway because the loan wasn't enough to live on.

Everyone else has been talking about how they're making enough to pay off their loans. I'm sure not! I'm 30 and a full time student on a full scholarship (thank YOU, California!), but the interest payments alone are $300 a month, and I can't afford that. I'm not taking on any more loans now, but I'll still probably be $100,000 in debt by the time I'm done with my BA because of how fast things add up.

I'm not bitter about people wanting to blame the students for their situations, because I made clear and obvious mistakes. But I shouldn't have been able to make mistakes this big. If I stop getting good grades, I can lose my scholarship and be forced to drop out. Then my loans come due. It's all well and good to idly speculate that yes, maybe students shouldn't take in loans, but it's not like anyone chooses to be in debt, and once you're there it's not quite as simple as saying "boy, that sure was a mistake."
posted by teponaztli at 4:14 PM on July 29, 2016 [19 favorites]


Also, yeah, sometimes it gets really old when your friends want to go out and don't seem to understand why you can't afford to spend $30 at dinner because you're massively in debt and also off work with a neck injury. Not that I'm bitter, of course.
posted by teponaztli at 4:15 PM on July 29, 2016 [4 favorites]


I just made the 75th of my 120 payments towards Public Service Loan Forgiveness. The first borrowers will become eligible in October, 2017. I need the program to last until April, 2020. I live in abject fear of the forthcoming headlines on FOX and WSJ, "Government Lawyers Forgiven Millions in Student Loans" which could lead Congress to end the forgiveness plan. Or a Republican controlled Congress which could end it just out of spite for government employees. One of Paul Ryan's Catfood Budgets already proposed capping the amount of forgiveness at something absurdly low, like $56,000. That's less than 1/4 of what I owe, with loans in negative amortization.

I'm not quite half way through, so I need till 2022 (I think) but otherwise this describes me. Not only did I take a pay cut for my non-profit job PSLF-eligible job (which is the job I wanted all along), I also gave up 401k for it. PSLF is my retirement. And I, likewise, am terrified that now that I'm half-way there, someone will fight to take it away. My only comfort is that will screw over a shit ton of lawyers and maybe they'll win the class action.
posted by crush-onastick at 4:46 PM on July 29, 2016


Maybe I'm too cautious about financial matters, but the cost of grad school loans was too much of a risk and burden for me to consider a terminal degree in design/architecture to permit me to teach studio (which I really want to do). So I'm stuck in the branch of my field that actually pays competitive salaries, which is not only wasteful of my excellent studio-based education but also profoundly unfulfilling.

The fact that many professional careers in 2016 America show a similar imbalance in cost of education to graduate compensation underscores both the need for more widespread white-collar labor unions and controls over net costs of education, not to mention control over the rampant inflation of 'required' credentials to be qualified for a job. Most people don't enjoy having to find a new job to get a promotion or raise, and the churn isn't doing employers any favours either.
posted by a halcyon day at 5:18 PM on July 29, 2016 [4 favorites]


As I get older I realize that my parents paying for my college education and handing me down a reliable car, and being on good enough terms with them to crash at either of their places if I need makes me very privileged and wealthy in a way that isn't really apparent from my bank account.

The highest paying position I have ever held is "graduate student RA" (albeit in the hard sciences with the additional benefit of unionization) and the closest I have come to worrying about money was the last semester of college when I had to drop my on campus job to focus on finishing my degree and spent a couple days eating oatmeal while I asked my mom for a bit of money to see me through.

Financial security is not that expensive, and yet we insist on squeezing people for every last drop of profit, mortgage people's futures by letting banks and interest and debt eat up every bit extra they might earn from getting an education and a better job, all the while those same people are the ones doing all the work and taking all the risk. It is disgraceful.

Those people who want the government to be run like a household? Great. Then they should want the government to do for all our children what my parents had the opportunity to do for me, and that's pay for a full education for those who need it, and make sure everyone has a bit of support in getting off to a good start, and to fall back on if times are a little rough. Because the interest I have not had to pay over the years for the advantages I have gotten is a real big sum of money. And that sort money should be in the pockets of people who need it and will use it, not in the hand of financiers playing for ever bigger numbers.
posted by Zalzidrax at 5:28 PM on July 29, 2016 [30 favorites]


The median weekly earnings of a high school graduate in the US in 2015 was $678.

Yikes. I make just under that, and that's with a master's degree, and I'm supporting a husband and two small children and paying off $17k plus his $6k in student loans. I need to get a better job.

I didn't finish my BA until I was 30. I had worked in middling admin jobs before going back to school and never made much money, and then went straight to grad school after. I just quit grad school last year and had no idea $50k a year is sort of low average. Now I'm almost 40 and can't help going into a panic spiral when I think of all of that lost income.

My parents were self employed and we were always poor. I don't really understand how being a middle class person works.
posted by apricot at 5:33 PM on July 29, 2016 [4 favorites]


I'm not sure that the existence of Debtors Anonymous is well known, but it should be. A friend asked me to go with her to a meeting, in support, and I discovered to my surprise that it was very relevant to me and my relationship with money. It's not for everyone in debt, but some people get a lot out of it (I don't know if it's like this everywhere, but at least in Los Angeles it was interesting to see that a large proportion of people in DA meetings, having trouble with debt, were in creative fields).
posted by jjwiseman at 5:34 PM on July 29, 2016 [4 favorites]


I don't want to nitpick his budget or second guess him but does this seem absurdly high for one person, or is it just me?

It's absurdly high compared to the cheapest you can possibly eat for, but it's reasonable for "mostly home made reasonable and healthy food, occasional restaurant or bar" -- you can save money better if you're not miserable and hating the restrictions you've placed yourself under.
posted by jeather at 5:35 PM on July 29, 2016 [5 favorites]


I can only speak directly to my own experience, but I distinctly recall looking around my grad school cohort and realizing that I was the only one living strictly off her own resources. Everyone else was married or had family support.

This is such a big deal. My parents didn't help me financially with my education at all, but they'd drive out to visit me every couple months and take me grocery shopping and I'd buy ridiculous amounts of everything.

However, the importance of a dual income can't be underestimated. If I had had a partner at about my same income level while I lived in San Francisco, we could probably have bought a home, or one of us could have gone to grad school. That support system is so important but, more and more, it needs to be financial.
posted by bendy at 6:18 PM on July 29, 2016 [4 favorites]


I don't want to nitpick his budget or second guess him but does this seem absurdly high for one person, or is it just me?

Looking at Mint, it seems like we have around $1200/month categorized as food and alcohol, for two people. Figuring that there are things that are being missed (because Mint is kind of terrible and I am not fanatical about correcting erroneous categorizations), let's say $1500/month for two people, in an expensive area and not really trying to limit spending on this category other than mostly cooking at home. So cutting that to $500/person looks, from my perspective, like some decent budgeting, without being hard core. That's a budget where you could still eat out a lot, or have lots of gourmet foods at home, and you would not feel deprived.

I can only speak directly to my own experience, but I distinctly recall looking around my grad school cohort and realizing that I was the only one living strictly off her own resources. Everyone else was married or had family support.

I saw that also when I was in graduate school. And I also saw people taking on huge loans to maintain what seemed like unrealistic spending levels -- it was like the lifestyle norm was set by the people with family money, and everyone else followed.
posted by Dip Flash at 11:27 PM on July 29, 2016 [2 favorites]


I don't recall exactly how deeply I went into debt to get through a few years of school, maybe 12 grand, 15, I don't know. Nothing like so many of you, nothing like one of my best friends, who is in over 120K. She'll never, ever dig out.

Anyways, I don't know what I owed them, what I *do* know is that I got letters from those bastards telling me that I was off schedule, and that I now owed this, or that, and they need the money right now, and on and on. And to call them is a horrible nightmare, absolutely no accountability, no one would give me their name, their phone number, an employee number -- nothing. Toward the end it was email addresses, will you give me an email address and oh goodness no, we won't send an email to you detailing what we'd just agreed to in this marathon telephone conversation.

But they would agree to something, finally, and then a week later another letter would come saying that I owed this much now. There literally was no accountability, everything was shifting sand. I hate those rat bastards. Every one of them. I wish them ill.

One of the best days of my life was sending those student loan jerkoffs a check that said "Paid In Full" in the memo line. It was in 1999, I was saving the world from Y2K, and making a decent buck finally, and better to come, until of course everything came tumbling down a couple of years later. But that's another story of course....
posted by dancestoblue at 2:45 AM on July 30, 2016 [1 favorite]


Stories like this and all these programs to mitigate poor financial decisions could be greatly reduced by a little reality check in advance.

Most community colleges provide a good cheap education. The courses are held at times which allow you to have a job at least part-time. I mean, basic chemistry is basic chemistry and not any better when taught by a TA at a prestige university. If you chose wisely, you can transfer to a perfectly fine state university for the final years of your degree and save thousands or even pay nothing. There are many grant and scholarship programs out there. Many high quality graduate programs are basically free. Mine actually paid a stipend. What kills you financially is the lifestyle - alcohol, eating out, high rent, and - a major drain - a car. Learn to live frugally, as the author ultimately did years too late. In the final analysis, if you are a graduate from, say, GW or Brown versus UVa, does that really make a difference? I'll answer that - no.

Source: debt-free UVa graduate whose kids also graduated debt-free.
posted by sudogeek at 6:26 AM on July 30, 2016 [2 favorites]


What kills you financially is the lifestyle - alcohol, eating out, high rent, and - a major drain - a car.

As other people have mentioned above, it kills your social life if your friends have more money than you do (or are irresponsible) and you try to live frugally. At 18 or 21, frontal lobes aren't even fully formed yet so it's easy to give into temptation. Your parents probably taught you a certain set of financial values (or, they were profligate spenders and you wanted to do the opposite); not everyone has that background. It's silly to make this a moral issue any more than, say, obesity.

[Note: I agree with you about community colleges and we should make more of an effort to steer kids towards them.]
posted by AFABulous at 7:40 AM on July 30, 2016


It was not intended as shaming or some moral screed. For some of us, with no money and no family money, it was simply reality. Live poor or spend excessively then live poorer.
posted by sudogeek at 7:45 AM on July 30, 2016


I mean, basic chemistry is basic chemistry and not any better when taught by a TA at a prestige university.
That is really, really not my experience, for what it's worth. I can't force them to do it, but I urge students who have taken introductory chemistry at community college to take our placement tests and retake the class if the test doesn't indicate that they've mastered the material. Students often place into introductory chemistry even if they got an A or B in the same class at community college. If the insist on moving on, those students rarely do well in more-advanced coursework.

Source: natural science and pre-med advisor who works with transfer students.
posted by ArbitraryAndCapricious at 7:48 AM on July 30, 2016 [9 favorites]


One of the arguments which was very successful in the long slog to forbid the death penalty for juveniles in the United States (as well as the one which removed the possibility of automatic life without parole for juvenile offenders) was neurological research about decision making and impulse control, and the juvenile brain's ability to truly understand both permanence with regard to consequence of action and the reality of a lifetime in terms of years and self. (Google results on juvenile death penalty neuroscience. It's fascinating stuff--I had colleagues working on the issue.)

Anyway. The same ideas about future self, permanence, and the juvenile brain--I would imagine--are also at work in these issues about accruing student debt.There was a lot of stuff int he neuroscience used in the juvenile law cases that the brain does not really get full maturity until our mid-20s when the prefrontal cortex--which helps inhibit impulses and helps form plans--finally stops developing. Basically, you're still an adolescent in decisional capacity well after most of us have graduated from college.

I mean, I'm just a lawyer and all the stuff I've read about this is very much simplified for non-scientists, but it seems that if there were real guidance available to students in need of financial aid to pay for college, as well as real protections of their interests with regard to this sort of lending, we'd have a much more just society.

In my mind, it goes along with those articles on choice/lifestyle/empathy and how we don't see our future self as something we have a stake in. Although that may well be a ignorant statement from a neuroscience point of view!
posted by crush-onastick at 8:01 AM on July 30, 2016 [1 favorite]


Looking at Mint, it seems like we have around $1200/month categorized as food and alcohol, for two people.

That's 20 dollars a day for food. My annual grocery + dining budget is $3.2k for one person.
posted by pwnguin at 9:10 AM on July 30, 2016


So my university was a pretty well-regarded engineering school with a very tough 2 year intro that was supposed to "weed out" people that just weren't meant to be engineers. They also gave out a ton of "merit-based" scholarships (gave 'em out like candy) that covered most of the absurdly high tuition. The catch? If your GPA went below a 3.0 you lost your merit-based scholarship. The professors were grading on what was basically an actual curve, which meant that a lot of people were getting C's and D's.

So what this all added up to was that a lot of my cohort were faced with the decision, in their 1st or 2nd year, of whet to do when their GPA dropped below 3.0 and they lost their scholarship. Do they drop out of college or take out private loans to pay 40,000 a year in tuition and fees? These were smart kids that were doing "all the right things" - majoring in STEM, going to a good school, doing internships, and they were still completely fucked over because professors still thought that 1/2 of the class should get below a B and that happened to be incompatible with the terms of their scholarships. The ones that got the loans and stuck it out mostly got jobs after, but have 100K+ in debt, which, even if you're making 50-80K a year out of college, is still a ton of money. It was very sad.
posted by permiechickie at 9:40 AM on July 30, 2016 [10 favorites]


Pwnguin, that's half their budget and you've got no idea if you're literally comparing apples to oranges. I can cut my grocery budget 40% one month because we eat vegetarian during Lent, and we're cooking at home all the time and I don't have any household restocking done in that month because I count the usual cleaning products and toiletries purchased at the supermarket on grocery runs under the same budget category. But the next month - a kids' birthday party, eating out at fast food a couple of times because I'm exhausted after weeks of cooking, restocking the pantry and eating meat again and bam, my monthly groceries skyrocket.

If you have kids, food issues related to health or weird work hours, spending money on food is where you can buy back time and sanity.

(I may be slightly touchy about this because I have had to argue about buying food for kids vs buying candy for them)
posted by dorothyisunderwood at 9:47 AM on July 30, 2016 [2 favorites]


I've been trying to think about why these discussion make me so angry. Here's what I think the reason is. I see a lot of students make what I think are bad decisions. I think those choices are going to make it more likely that they'll have a lot of debt and less likely that they'll graduate. But I almost never see students make bad decisions because they're self-indulgent twits who aren't concerned with their financial future. Nine times out of ten, they make bad decisions because they are trying to be responsible. They are trying to train for high-paying careers, even if they aren't interested in or good at the classes that are required for those careers. They are trying to graduate early to minimize debt, even if that means taking a course-load that pretty much nobody could handle. I don't see a lot of students majoring in underwater basketweaving because they are part of the generation where everyone got a trophy. I see a lot of students failing Biochem and Microbiology because they're trying to finish up all the prerequisites for pharmacy school in two years, and then flunking out or taking five years to graduate because they were trying to take four tough science classes in the same semester.

This is not a problem about individual responsibility. The kids are not, for the most part, irresponsible. They are doing the best they can in a system that is not set up to help them achieve success, and I don't think that's a problem that can be solved with better budgeting.
posted by ArbitraryAndCapricious at 9:50 AM on July 30, 2016 [25 favorites]


"Trade school," people say. That's a good choice in many cases, and we should educate more students about this option, but not everyone can go to trade school. And the trades are under attack, too.

Our area used to have several dedicated vocational high schools. Districts jumped on the "Trades suck, everyone needs to go to college!" bandwagon and closed them. There is now one regional vocational high school, and the high school in my district offers vocational training.

Both Monsters took vocational programs - Elder Monster in Culinary Arts, Younger Monster in Engineering. Elder Monster is now a chef at a local joint - isn't gonna get rich, but he's happier than a pig in shit to be doing what he really loves. Younger Monster tripped over a job at Libbey Glass while trying to decide whether to go to University. He now makes more money than I do, and is about to become the youngest person to join the Hot End team. (They're the guys who work with the molds, production machines, and molten glass.) He will probably be a Master Glassmaker before he's 25.

Younger Monster's fiancee is currently majoring in Early Childhood Education, and she's having a hell of a time finding compatible work because no one wants to accommodate her school schedule. Even a WAH job like mine is proving elusive for her, because while we have plenty of third shift openings - her preferred shift - all training is done on 1st shift. No training classes met all summer, next one starts in September. She can't take the time off for training, she'd lose her (meager) scholarship. We yell "College!" at these kids, but then they can't get simple accommodations to be able to pursue a degree and still be able to eat more than ketchup soup.
posted by MissySedai at 11:42 AM on July 30, 2016 [2 favorites]


That's 20 dollars a day for food. My annual grocery + dining budget is $3.2k for one person.

So? With very careful planning, I can do that for 4 people for an entire year.

Can. And in fact, have done, often for years on end. But I'm not aware of any kind of moral superiority contest for spending as little as possible on food in a year, so I won't when we have the money to eat better than that.

Food is a small pleasure in a mean world. Let's not begrudge people the little pleasures in order to feel superior, eh? They're not hurting you by not adhering to your standards.
posted by MissySedai at 11:49 AM on July 30, 2016 [22 favorites]


The Onion: woman a leading authority on what shouldn't be in poor people's grocery carts

"If I were on food stamps, I’d just buy two whole chickens and a bag of potatoes—you could feed a family for a week on that and still have money left over.”
posted by teponaztli at 11:56 AM on July 30, 2016 [9 favorites]


But I'm not aware of any kind of moral superiority contest for spending as little as possible on food in a year, so I won't when we have the money to eat better than that.

I didn't read that comment as moral superiority at all. One of the things I like about these discussions is when people are willing to name numbers -- it's not necessarily any apples-to-apples comparison, but it is still super interesting to see how people make those choices.

There have been times we have needed to budget tightly, including groceries, and times like now where there is the space to make choices more on preferences and health than budget. And similar to what others have mentioned, I don't track the spending closely enough to really be able to know how much is being spent on food with any precision -- household and pet supplies get mixed into the same category, I don't track cash purchases, and then there are work expenses that later get reimbursed but in my crude budgeting still show up as in the same category.
posted by Dip Flash at 12:18 PM on July 30, 2016 [3 favorites]


Marx explains:

"The less you eat, drink and read books; the less you go to the theatre, the dance hall, the public house; the less you think, love, theorize, sing, paint, fence, etc., the more you save-the greater becomes your treasure which neither moths nor dust will devour-your capital. The less you are, the more you have; the less you express your own life, the greater is your alienated life-the greater is the store of your estranged being."
posted by anotherpanacea at 2:54 PM on July 30, 2016 [25 favorites]


I didn't read that comment as moral superiority at all. One of the things I like about these discussions is when people are willing to name numbers -- it's not necessarily any apples-to-apples comparison, but it is still super interesting to see how people make those choices.

Thank you for the defense. It was not my intent to shame anyone on MeFi about their spending, just to contribute my additional datapoint regarding whether the gentleman's budget represented a sacrifice. From my point of view, I don't feel particularly deprived. Actually spending $500 a month feels like a Brewster's Millions scenario, but there's many oranges in my apple barrel:

1. No sales tax in Oregon. My food budget is proportionally lower as a result.
2. I largely cut out carbonated beverages from my diet. Water's cheap and plentiful here. It's amazing how many dimensions this stuff is bad for you on given it's near ubiquity, as my dentist can attest.
3. Pretty much zero budget for drinks. One, maybe two mojitos a year. Not a conscious decision or moral judgment, I just can't really stand the taste of alcohol. Or coffee for that matter.
4. I work walking distance from the cheap student food row adjacent to campus. I never pack lunch, and pay $3-$5 on average. These places usually have customer loyalty programs, which is usually another 10 percent off.
5. I don't actually buy a lot of fresh fruits & vegetables. Never had a lot of them growing up, really.
6. I do actually try to categorize purchases carefully. I do have a travel reimbursement category, on the few times a year that happens, and if I make major non-food purchases at Fred Meyer I'll make sure the split transaction represents it.

IMO, $16k of debt is really not all that much of a hole to dig out of. I think we all agree the $6k CC debt is bad, but the standard repayment plan for student loans is 10 years. There's no need to moralize the way Dave Ramsey does about debt. I stopped paying attention to /r/personalfinance after I realized I had learned all I could from the sub, and that there were approximately five types of posts:

1. I have crossed a significant net worth threshold: 0 / 10k / 100k!
2. I need money tomorrow. Help?
3. I have a thousand dollars from my summer job, how do I invest that into like a million?
4. This bill is bullshit, how do I protest it?
5. My masters degree came with a huge debt for negligible additional income, how do I afford move out of my parent's house?
posted by pwnguin at 3:21 PM on July 30, 2016 [1 favorite]


I stopped paying attention to /r/personalfinance after I realized I had learned all I could from the sub, and that there were approximately five types of posts:

1. I have crossed a significant net worth threshold: 0 / 10k / 100k!
2. I need money tomorrow. Help?
3. I have a thousand dollars from my summer job, how do I invest that into like a million?
4. This bill is bullshit, how do I protest it?
5. My masters degree came with a huge debt for negligible additional income, how do I afford move out of my parent's house?


There's also another type of post there, the total trainwreck. Some of them have to be fictional, but others are probably true, and describe things like "my mom drained my retirement account and spent it on blow" or "I invested in an online scam and now I am being evicted along with my deadbeat boyfriend, and I think I'm pregnant."
posted by Dip Flash at 7:56 AM on July 31, 2016 [1 favorite]


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