Any hope for ever paying off huge student loan debts?

[EnglishTeacher]

I owe a very large amount in student loans, due to graduate school. (If I could do it all over I would never have gone back to school if it meant going into debt like this, but that’s another story–I was young and didn’t fully understand what huge debts do to your life.) Today, I was looking at my payment history, and it says that over the last year, I have paid about $450.00 in principal and about $2,500.00 in interest. That just makes we want to cry. There really is no hope for ever paying it off for the rest of my life, that I can see, unless my circumstances change in some dramatic, unforeseen way.

My job doesn’t pay much, and I will soon be starting a second job that will bring in some extra income, but it’s all I can do to just keep my had above water financially, much less make enough to pay more than the minimum on my loans. (I don’t teach at this time, despite my user name, by the way.)

I don’t suppose anyone has any advice or knows of any programs or jobs where they will pay some of your student loans? If I had the proper skills, I would go west and work on the oil rigs.

 

[Burt_Macklin]

I don’t suppose anyone has any advice or knows of any programs or jobs where they will pay some of your student loans? If I had the proper skills, I would go west and work on the oil rigs.

What about working the oil rigs for a few years? I know several people who gradated without degrees in any STEM field who went on to work with some of the larger oilfield service companies(Schlumberger, Haliburton, Weatherford, Baker Hughs, BJ Services) for a few years to pay off student loans. I had one friend who just moved all his stuff to storage and worked for Schlumberger until his loans were paid off. With no money needed for rent or meals you can pay down your loans pretty fast.

 

[pensmama87]

I owe a very large amount in student loans, due to graduate school. (If I could do it all over I would never have gone back to school if it meant going into debt like this, but that’s another story–I was young and didn’t fully understand what huge debts do to your life.) Today, I was looking at my payment history, and it says that over the last year, I have paid about $450.00 in principal and about $2,500.00 in interest. That just makes we want to cry. There really is no hope for ever paying it off for the rest of my life, that I can see, unless my circumstances change in some dramatic, unforeseen way.

My job doesn’t pay much, and I will soon be starting a second job that will bring in some extra income, but it’s all I can do to just keep my had above water financially, much less make enough to pay more than the minimum on my loans. (I don’t teach at this time, despite my user name, by the way.)

I don’t suppose anyone has any advice or knows of any programs or jobs where they will pay some of your student loans? If I had the proper skills, I would go west and work on the oil rigs.

Oddly enough, I racked up all my student loan debt becoming an English teacher - and I never had a full-time teaching job. I subbed short and long term for a while and it was seriously depressing realizing that I had paid all that money to earn minimum wage.

Here are my suggestions:

• Work as many jobs as you possibly can while still being able to function. It doesn’t matter what they are as long as they are reliable sources of income. For a while I had a daytime office job and then worked nights at a fast food place, and the nights I didn’t work I tutored. It wasn’t glamorous but those extra few hundred bucks a month came in handy.
• Have an extremely low cost of living. Live in a studio apartment, or split living costs with a roommate or two. Learn to love spaghetti and rice. Buy a few extra sweaters from the thrift store and turn down the heat in winter. Figure out if you are eligible to negotiate rates on your electric and gas or switch providers (in my state you can). Buy all of your clothes secondhand. Scout Craigslist or Freecycle in your area for offers of free stuff - you’d be surprised what people give away.
• See what you have now that you don’t absolutely need and sell it. Even though you’re worried about the debt, you absolutely need an emergency fund.
• Is it a possibility you could return to teaching? There are areas with low costs of living that need teachers. A salaried day job with free summers and evenings (I know there’s lesson planning, but teacher schedules do offer some really, really nice flexibility for outside jobs) would be great. If you work in an eligible district, you may be entitled to some loan forgiveness. I believe that’s a federal program.

Truthfully, $3000 a year ($2500 interest + $450 principal) does not sound unbearable by itself. It’s not the desired ratio, but if $3000 a year is making you feel like you can’t live, there’s a situational change that needs to happen. More work, lower cost of living, or both. There’s a lot that can be done to remedy that.

(When I earned my Masters in 2009 I was sitting on about $80,000 in debt. Five years later, I’ve got about $46,000 to go with plans to be debt-free in three years. It IS possible. But oh yeah, it stinks, really, really bad.)

 

[pianistclare]

Maybe Dave Ramsey has some tips for this… He’s the go-to person for money problems…I have a dear friend in the same situation. She got a Masters in Pastoral Theology and is a Spiritual Director. But it has ruined her financially. Praying that you will find a workable solution.

 

[1ke]

I suggest you go to NSLDS, sign in, and use the repayment calculator to see if income-based, income-contingent, or pay as you earn would be a good option for you. As long as you make on time payments, the balance will be forgiven. If you get a better paying job, you can switch to a different repayment plan.

Working as a teacher or for a 501c3 (or certain other professions) can make you eligible for loan forgiveness and you can couple that program with the income based repayment programs.

Depending on when you took out the loans, consolidation of some or all of the loans may even benefit you due to rate fluctuations (but can impact the repayment timeline and eligibility for other program so proceed with caution).

All of this can be modeled at NSLDS with the repayment calculator. There are trade offs between payment, total repaid, timelines, etc. So, review all your options.

This assumes you have federal Direct, Stafford, or PLUS loans. Private loans, of course, are not eligible for such programs.

 

[pensmama87]

Maybe Dave Ramsey has some tips for this… He’s the go-to person for money problems…I have a dear friend in the same situation. She got a Masters in Pastoral Theology and is a Spiritual Director. But it has ruined her financially. Praying that you will find a workable solution.

Yes, these are situations where he is very helpful. You don’t have to buy a thing. You can listen to his radio show for free online (or locally if a station carries it) or borrow his books from the library.

There are lots of great websites for budgeting and shopping with very limited means.

 

[Catholic1954]

My nephew did OTR truck driving for a few years to pay off law school, the other one lived in a studio apartment, walked to work as a waiter and paid off his loans, until his really big dream (government) job came through, the year after graduation. My daughter’s ex-fiancé joined the Air Force and paid off his HUGE student loan in just one enlistment. There are ways to do it, you just have to be creative enough to think of it and disciplined enough to follow through. Check out the oil rigs anyway, you may get lucky and find someone willing to train you.

 

[whatsmyname]

If it were me, I would sit down with some financial books from the library (no sense wasting money that could be sent in to pay off the student loan).

I like Dave Ramsey because that’s what I used to become debt free. I like his radio show and his Financial Peace University, but I thought his books were pretty awful. Beth Kobliner’s “Get a Financial Life” is great. Suze Orman’s books are good, too.

Then, once you have some sort of knowledge of general finances, if you don’t already, you have a few choices. You can buckle down for a year or two with extra jobs and a spartan lifestyle and devote your life to paying off that student loan debt. You can plan your life around those payments and take the next 30 years (or however long the loans are for) to pay them off. Or you can do something in the middle.

First, you must write out a budget. Write down how much you have coming in and exactly how much is going out, even if it is just the few cents you spend on a candy bar from a vending machine. It isn’t fun, but you have to take control of your money and tell it what to do.

If you spend more than you earn, figure out a way to make more money and cut expenses (another job, a cheaper living situation or a roommate, cook from scratch and don’t eat out, cut coupons, get rid of cable, change cell phone plans, shop at Goodwill, etc). Once you have every dollar named, send every extra penny to pay down the principle of the student loan debt. As the principle payment gets bigger, the interest payments should get smaller.

Do you have your teaching credential? If so, there are government programs where you teach in an underserved area for a year or two and get your loans forgiven.

 

[Cricket2]

Really, all I can suggest is paying a little extra. Try for $25 over each month. Also, you have to review your needs versus wants. So here are some things I did (whether I liked it or not):

No more new clothes. If I needed something I went to second hand stores. I can sew as well, so this made it possible for me to make stuff much cheaper if I found material on sale.

No more eating out. None at all. The money I was going to use to eat out went to the loans. And yes that went on for several years.

If you are in an apartment with a single room, downsize to a studio. If your renting a house, well get something smaller. Then every dime you save in rent use for the loans.

Stop using your credit cards and consolidate them. Start with the smallest balance and work up. And once you pay off the lowest one: cancel it. I had 7 cards. I now have two and will never have more again. It took 7 years.

If you can’t buy it with cash you don’t need it.

I even cut meals down to twice a day, ate less meat and stayed away from treats. So anything you can do, to collect an extra 10 bucks or 50 bucks you do, and then you put it on the loan.

Yes, keep the 2nd job. And plan on doing that for a couple of years to pay off even more.

 

[3DOCTORS]

If you’re young enough and your situation permits it (whether or not you’re married, have kids, etc.) definitely check in to the several ways in which you can work in a job that will lead to the loans being forgiven. The Peace Corps is one, I think; working in impoverished areas teaching as others have mentioned is another, the military . . .

I feel your pain because I tried for decades to find a place in the world and a decent career (due to psychiatric difficulties of various kinds, the worst being anxiety) and in the late 90s I did the student loan thing. I didn’t rack up that much debt as some folks, yet given my difficulties with employment it still is an overwhelming amount and now I’m on a low income on disability.

Scrimping and economizing - they do help. However, do make a point to find things that are no-cost or very cheap “treats” so that you don’t feel like your life is insufferably bleak throughout this time. Whatever is your thing - going to the art museum, walking in the park, playing pickup basketball with your buds, woodworking, who knows. Just something that’s a reward and a thing to look forward to. Make some kind of a chart showing your repayment process and have the delight of seeing the line get closer to the goal mark.

 

[UbiCaritas]

Are you open to teaching? If so, would you consider Teach For America/Americorps? In exchange for teaching in generally poor (economically and academically) schools, you’re a) paid and b) eligible for a certain amount of loan forgiveness every year.

 

[Rau]

I owe a very large amount in student loans, due to graduate school. (If I could do it all over I would never have gone back to school if it meant going into debt like this, but that’s another story–I was young and didn’t fully understand what huge debts do to your life.) Today, I was looking at my payment history, and it says that over the last year, I have paid about $450.00 in principal and about $2,500.00 in interest. That just makes we want to cry. There really is no hope for ever paying it off for the rest of my life, that I can see, unless my circumstances change in some dramatic, unforeseen way.

My job doesn’t pay much, and I will soon be starting a second job that will bring in some extra income, but it’s all I can do to just keep my had above water financially, much less make enough to pay more than the minimum on my loans. (I don’t teach at this time, despite my user name, by the way.)

I don’t suppose anyone has any advice or knows of any programs or jobs where they will pay some of your student loans? If I had the proper skills, I would go west and work on the oil rigs.

Can you put this into context by stating the $value of the debt and your gross income?

The solution adopted by wealthy families is that the parents pay out the student loans of their children. In this way, it can be understood how high fees for education disenfranchise those from less well-off backgrounds.

 

[Xantippe]

Can you put this into context by stating the $value of the debt and your gross income?

Yes, the ratios are very important.

I remember there was a poster here a week or so ago who was CRUSHED by the size of her student loans. Come to find out, it was only $20k.

 

[PrayerShark]

I’ve rewritten my response to this several times now and to sum it up, this the best I can say.

Is the average American any better than a serf these days? It is said that education is the silver bullet to conquering a lot of society’s problems (poverty, violence, inequality, etc.) yet it seems to be that to get one is increasingly harder and incredibly punishing when one does.

 

[1ke]

I’ve rewritten my response to this several times now and to sum it up, this the best I can say.

Is the average American any better than a serf these days? It is said that education is the silver bullet to conquering a lot of society’s problems (poverty, violence, inequality, etc.) yet it seems to be that to get one is increasingly harder and incredibly punishing when one does.

well, of course you only see people on here talking about their problems. you don’t see all the people who don’t have this problem.

Some people have large student loan debt because they had few other options. Some, though, made lifestyle choices and took out more student loan than necessary and spent it-- on vacations, on cars, on whatever. So, there is a mixture of different situations when it comes to student loan debt.

Some also did not take options that cost less, such as state schools versus private schools, working vs. loans, living at home while going to school, scholarships, etc.

So, it is difficult to generalize.

It seems evident at this point that the easy-money policy of federally guaranteed student loans coincides with the rapidly rising tuition rates and one would be blind not to recognize the connection.

If people had to pay for their own schooling, as they primarily did 20-30 years ago, it would not cost what it does today. Dorms would not be palaces as they have become in the last 10 years. And, the federal taxpayer would not be subsidizing all this.

 

[1ke]

Let me also add, before anyone jumps on me, that I do understand the intentions behind the federally guaranteed student loan program. However, it-- like many well intentioned programs-- had unintended consequences that have now created even BIGGER problems than those that they set out to solve originally.

 

[EnglishTeacher]

It seems evident at this point that the easy-money policy of federally guaranteed student loans coincides with the rapidly rising tuition rates and one would be blind not to recognize the connection.

If people had to pay for their own schooling, as they primarily did 20-30 years ago, it would not cost what it does today. Dorms would not be palaces as they have become in the last 10 years. And, the federal taxpayer would not be subsidizing all this.

This is all very true. Our system of higher education is messed up.

 

[EnglishTeacher]

Can you put this into context by stating the $value of the debt and your gross income?

The solution adopted by wealthy families is that the parents pay out the student loans of their children. In this way, it can be understood how high fees for education disenfranchise those from less well-off backgrounds.

The loan debt is over $100,000. It started out in the 98,000 range, I think, but there was a time when it was in deferment, so the interest accrued very fast.

My current gross income is about $25,000.

I do try to live frugally, and am going to cut back still farther. I don’t have cable; I have a cheap phone plan; and have been buying clothes second-hand. I have a one-bedroom apartment and am looking to switch over to a studio with cheaper rent.

It just seems hopeless, though. Any cuts that I can make in my expenses, even with an additional job, will still not even make a noticeable dent in a loan debt of that size. Living frugally (although I intend to continue doing so), even for the rest of my life, just isn’t going to cut it. But I will look into the suggestions made here, including the NSLDS site.

 

[Burt_Macklin]

The loan debt is over $100,000. It started out in the 98,000 range, I think, but there was a time when it was in deferment, so the interest accrued very fast.

My current gross income is about $25,000.

I do try to live frugally, and am going to cut back still farther. I don’t have cable; I have a cheap phone plan; and have been buying clothes second-hand. I have a one-bedroom apartment and am looking to switch over to a studio with cheaper rent.

It just seems hopeless, though. Any cuts that I can make in my expenses, even with an additional job, will still not even make a noticeable dent in a loan debt of that size. Living frugally (although I intend to continue doing so), even for the rest of my life, just isn’t going to cut it. But I will look into the suggestions made here, including the NSLDS site.

Your monthly payment on 100k, at standard 10 year payment plan, would be about 1000 dollars a month. That would mean half of your income is already going to pay student loans, leaving you very little to live on. I do think you are at the point where you simply aren’t earning enough income. There is no amount of creative budgeting can make up for that.

 

[Xantippe]

Your monthly payment on 100k, at standard 10 year payment plan, would be about 1000 dollars a month. That would mean half of your income is already going to pay student loans, leaving you very little to live on. I do think you are at the point where you simply aren’t earning enough income. There is no amount of creative budgeting can make up for that.

Yes. Dave Ramsey would not lean on you at all about your spending–he would concentrate 100% on increasing your income.

It’s the income that’s the primary problem. Do whatever you can to morally increase your income and don’t let it get bigger.

One solution that comes to mind is working abroad teaching English. China is an option, although I’m not sure what the salaries are. I know people make a lot of money working in Gulf Arab countries, although that comes with special dangers and sacrifices. But you are in a real pickle.

Good luck!