Bringing up student loans is kind of like bringing up STIs: it’s an uncomfortable topic we’d rather ignore and you can never be sure who has them. Sadly, because loans are such a taboo subject that is wrongly tainted with a certain degree of shame, the knowledge of those who have dealt with the realities of student debt is often not shared. When I took out $20,000 of student loans I didn’t have a resource to help me better understand just how debt could affect my life post-graduation. I graduated five years ago and I’m still paying off my loans. Occasionally I wonder how my peers are dealing with debt. So I set out to hear the stories of other millennials who graduated five-seven years ago with debt balances at graduation ranging from $10,000 – $90,000. Here’s what some of them had to say.
Madame Noire: How has student debt affected your life?
Sarah: Student debt has definitely affected my life in a huge way. One major aspect is the fact that I am still living with my parents in order to pay off my debt as fast as I can. Over half of my paycheck is going towards these loans and this is what makes it so difficult to move out and start my life. So for now, I am living with the feeling that life has yet to begin for me.
Dylan: I’ve talked about [debt] with my current girlfriend as we’ve gotten more serious. After we decided to move in together, we made a decision to live in a smaller apartment than I might otherwise if I didn’t have debt. I made a conscious decision to not take on other large amounts of debt, like a mortgage, until I can pay off what I currently owe.
Mike: Student debt has definitely been a burden since leaving college several years ago. It’s had a direct impact on where I live, the type of car I drive, the number of vacation trips I take, and just the overall financial quality of my everyday life. I lived at home with my parents for five years after graduating, rather than getting an apartment. I bought my first real car three years after graduating college. [My wife and I] actually just moved to a more modest apartment to get some extra cash to pay off [debt] faster.
MN: How do you feel about debt now?
Sarah: I feel debt is stopping me from fully living life and I don’t want this feeling to linger on when I get married and have a family. I like the feeling of knowing that everything is fully paid off. It’s a feeling of freedom. I would definitely borrow money if I had no other choice. However, this would now be my last resort as opposed to a few years back before graduating college and really understanding the power of debt.
Dylan: I think if you’re smart about it and don’t take on more debt than you can handle, it’s an effective tool to be able to purchase things that you may not be able to otherwise. I’m in favor of debt, but I think that people need to be better educated about debt, especially going into college. It’s not a good idea to take out $200K of debt if you don’t have a career path in mind that wouldn’t allow you to pay off that kind of debt.
Mike: We’re committed to not borrowing money again, except most likely a 15-year mortgage. We avoid debt and credit cards like the black plague. We believe that “the borrower is a slave to the lender” (Proverbs 22:7), and are going to cancel our credit cards as soon as the balances hit zero. We plan to save up for everything and pay with cash.
MN: Was borrowing worth it and would you do it again?
Sarah: Although I want to say that I wouldn’t be where I am today without the degree that I received and the debt that I took out to pay for my college, I don’t think this is true. I know many students that went to a public college for their undergraduate and then a private college for their graduate school and they still got to where I am in the very end. The thing is that I loved my experience at the college that I went to and I wouldn’t change that for anything. I would definitely do it over again just for this reason.
Dylan: Given that my graduate degree (which is what I took on debt for) is completely different from my undergraduate degree in liberal arts, I absolutely wouldn’t be where I am career-wise without debt. I absolutely would take on the debt again, because I have a career that allows me to repay the debt at a reasonable pace.
Mike: It’s hard to say. I’m of the mindset that everything happens for a reason but if I had to do it all over again I would not have borrowed any money for college. I was the first in my family who even had the option of attending a four-year college, so I believed that I had to do whatever it [took] to go to a big school and graduate in four years. I think the best path to take is to pay your own way through college, even if that means community college for two years then attending a four year college after.
If we solely focus on the economics of borrowing money for post-secondary education then, as reported by The Atlantic, in the long run school loan debt is largely a good decision. However, the thing that I drew from the conversations with my peers is that there are so many other highly subjective variables that determine your perception of how worthwhile it is to borrow. My economist friend shed light on possible factors such as the cost of worrying about not having enough money to make tuition payments on time if you don’t borrow, or on the flip side, the cost of choosing a career path you hate but need in order to pay off your incurred debt. Yet despite our unique dispositions and circumstances that influence our feelings about debt, the single unifying theme from all whom I spoke with was that we wished we had received more education on debt earlier on in life: things like refinancing options, fixed vs variable rates, what is a good interest rate, the concept of compounding, how interest payments work, what it means for your take home pay etc. One friend said, “[He] should have taken a more proactive view of the realities of lending starting at age 16.”
Was your student debt worth it?