You are competent, smart, and sure of yourself in most areas of your life. You picked a major, maybe where your passion lies, or perhaps in a field with a growing workforce. You worked hard and earned a degree. Your family is so proud of you. The first job you obtained is good or maybe just steady and the pay is decent. But at the end of the month, you have that thought once again, where did all my money go? It feels as if you make a payment, exhale, and before you can breathe in again another student loan payment is due.
May 23, 2011 was the day I encountered our generations “new normal.” I remember sitting at my parent’s dining room table, calling each lender I borrowed from in college to find out how much I would have to pay on a monthly basis. $274 dollars a month? For how long? 5 years? Seriously? That was my first call to Sallie Mae, three more lenders to go. By the end, I couldn’t believe what I owed. Oh by the way, I didn’t have a job at the time. That college, with the 98% job placement, placed me back in my parents’ house. The panic I felt sitting at that table was overwhelming. I’ve paid $640 per month every month since August 2011 for student loans, $39,040 in total at the time of this blog post. As a comparison, a 2016 Mercedes-Benz C300 can be yours for $641 per month, with no down payment. A $100,000 30 year mortgage with zero money down and a 4% interest rate will cost you $478.00 for principal and interest. And I’m paying $640 a month, for the potential to get a job? Something seems off about that.
Research performed in 2014 by the National Center for Education determined 50% of first-time full-time undergraduate students at public institutions received student loans, the percentage increases to 78% for people like me, who attended a private “nonprofit” institution. Per statistics provided by The College Board, the cost of tuition and fees has risen from $10,088 in 1975-1976 to $32,405 in 2015-2016 for private nonprofit four year institutions. For perspective, $10,088 in 1975 equals $16,213 in 2015 dollars.
Seventy percent of seniors who graduated from public and private nonprofit institutions had an average of $29,000 in student loan debt in 2014 and that number continues to go up every year. For some that may be shocking, for the majority of us that is reality. How many generations started their careers knowing their net worth would be negative for at least 5-10 years? But now, student loan debt is the price of admission for the American Dream. Think about this, besides repaying student loans, what can you say with certainty you will be doing for the next 10 plus years? Most likely not still working at the same job you obtained upon graduating. Our generation averages three to four job changes during the first ten years of our careers. Well, love lasts forever…right? Perhaps you married your high school or college sweetheart and you two plan on living happily ever after. A study conducted in 2012 concluded the average marriage lasts eight years before divorce. Sallie Mae will outlast your sweet lady. That is a sobering thought. Actually, a sad one. What did I get myself into?
Now, I know, there is the built in retort of “if it’s too expensive, don’t go there.” First, don’t be that person. Second, the institution a student chooses to attend should not be determined solely by dollars and cents. Other factors must be considered when deliberating, such as, which university is the best fit for me? There are many fine public institutions, but they are not for everybody. I know personally, coming from a tiny high school with a graduating class of 27, three months later attending a public university such Ohio State with 40,000 plus students would’ve been catastrophic. I would’ve gotten lost in the shuffle, and the parties, and anywhere else you can get lost. I may have been stuck there for six years trying to earn a bachelors. I needed the smaller classrooms and focused attention a private university affords you. I’m not a private school snob, turning my nose up at people who attend public universities, I’m just saying they aren’t for everyone.
Thirdly, save the “you don’t know what having it rough is” rhetoric. “In my day” is the politically correct way of calling a 20 something lazy. I am not whining about how hard we have it, my goal is to illuminate the struggle we are facing. The challenges life presents to us today are different, times have changed. But I think our generation is at times inappropriately labeled as lazy, stubborn, and entitled among many other things. I also know every generation has their cross. We cannot compare one to another, the burdens are not the same. Having $40,000 in student loan debt is not the same as growing up in the Jim Crow era. But the weight of this student loan debt is still heavy and we carry it every single day. Many of us are the firsts in our families to go to college, which is not easy. The financial burden student loans place on young adults only amplifies the pressure. As an 18 year old, you have no understanding of how signing on that line will determine where you live, what you drive and when you can say I do to the person you love.
I would love to hear your personal take, or your story regarding student loans in the comments section. By the way, I did get a job two months after graduating. The only people happier than me were the lenders.
Thanks for reading.