I’ve Spent $60k to Pay Back Student Loans and Owe More Than Before I Began | Hacker News Reader

I’ve Spent $60k to Pay Back Student Loans and Owe More Than Before I Began

nytimes.com

21 pointsjaredwiener36 comments

I'm sorry I take issue with these articles written from the perspective of they are a victim. They took $78k in loans to get a degree whose prospective returns were abysmal.

They made the choice to defer resolving their debts, and let the interest be added to principal while not making payments.

I'm not saying that the system doesn't do everything it should to help people understand. But the contracts they sign for the money spell it out.

I went through the same, it took me several more years to complete my education than it could have, but living on borrowed money, at the rates that were offered were foolish.

I know my view on this is likely different from most, but reading this article most of what I see is a person, making bad choice after bad choice and then somehow surprised when they are worse off than before.

I feel for the person, as I do for so many that took that route, but it wasn't like they didn't have everything they needed to realize this was a series bad choices.

It seems heartless to agree but also level-headed. A bachelor’s in biology can only be obtained if you have quantitative reasoning, and understand compound growth and the fundamental insecurity of the natural world, so this seems especially egregious. If they were reporting on their own life as a journalist, what agency do they give themselves in making their own choices?

Why borrow at least 1.5 years’ gross salary and start their adult life with such debt? I as a taxpayer helped loan them that money, I’d like it back at some point.

A Bachelor's in biology doesn't earn you much either!

I have a feeling this is the dilemma the article's author found as well. There really aren't many decently paying jobs for someone with an undergraduate biology degree - at least not compared to the number of people with said degrees. So, do you double down and get a graduate degree in hopes of increasing your earning potential?

I found myself in that same situation, with the same degree, and decided it wasnt worth taking on debt for a graduate degree (nor spending the 2-3 years it would have taken). Problem is, while the potential jobs for someone with an advanced degree are better, there are even less of them, and the competition is tough.

It’s all what you make of it. I never got my bachelor’s, because I ran out of my parent’s limited funds and we weren’t going to borrow.

My family is lucky in some way because I’ve paid for my wife’s and one kid’s college so far. But saving so my kids could complete their education was a major life goal, achieved due in part to a lack of bad luck.

But sometimes that’s life when you are young. Making bad choices after bad choices. This is a predatory system. My soft European brain can’t even compute how such villainy is not only allowed but also the status quo

Agreed. The take you're replying to is logical and true but with sympathy and not empathy. In practice, the kids making these decisions have no business making them, full information or not. The numbers are so foreign and the outcome so distant, while they haven't even ever left home.

Further, not all kids making these decisions have strong families or networks that can help set them straight. Instead, all they hear is "college is critical" and accept on faith there's an ROI.

What villainy?

The terms are clear, the real issue is how many people take on such massive debt without reading the terms or having a plan other than "it will work out."

From an economic opportunities perspective I'd much rather be a young American than a young European from any country but Germany.

The true villainy is the impossible situations a young Spanish or Italian adult is thrown into knowing there is no career prospects for them in their society and that they'll end up living in their parents house till their mid 30s

"When I finished school in 2007 — with an undergraduate degree in biology and a master’s in science journalism — I owed $78,060 in federal loans."

According to [1] the current avg salary for a journalist is approx. $41K. Assuming some inflation since the author graduated the author accrued 2 to 3 times her expected yearly salary in debt to get her 'dream job'. I think the root of her problem was she had no education in financial literacy, took the terrible advice of 'follow your dream' and now expects those bad choices not to continue to bite her. College is bet and she made a bad one. I don't think this is a good argument for debt relief, but its a great argument for promoting financial literacy and directing young adults to accrue only what debt they can reasonally pay back with their chosen profession. If your dream job pays nothing and is uber expensive to attain then maybe you shouldn't follow that dream or accept you are making a bad financial decision in the first place.

1. https://www.salary.com/research/salary/recruiting/journalist...

Still, the odds of the college bet became way too bad for too many degrees. I mean we are talking about a STEM subject (biology) and a masters in a subject that is directly related to a job (journalism), also with the added benefit of it being science journalism which needs people with her knowledge of sciences (biology). So, yes, it appears that there is a sense of responsibility that she should have (and she has it, she paid of 60k). But the more urgent question is structural: college does not pay off anymore (anecdata about CS etc. notwithstanding) and that has a lot to do with the jobs market but also that college inflation rose a multiple times that of general inflation in the last 30 years. We can blame individuals all we want (and feel good about it from afar) but that doesn't solve the structural problems.

How are structural problems solved other than by the aggregate choices and decisions of individuals? Isn't abstinence from the entire situation a choice? Isn't the decision to pursue this career a choice? Can we not rightly critic those choices to highlight how to recognize and avoid the structural problems to begin with? And might ask how can the author practically solve any of these 'structural' problems? I would argue she wouldn't care, and rightly so, if her debt was discharged which is what bankruptcy reform could do.

As for the 60K she paid, the gov. gets their money either way. If you don't pay they will simply garnish your wages, take your tax refunds, and put lien on your property.

LOL, I half-expected commenters to rail on how unfair student debt is, and how debt forgiveness would solve problems like this (which it would, but create new ones for generations to come), but I was surprised and pleased that there are others like me who are taking what I think is a more common sense approach.

Parents and educators should be teaching young people fiscal responsibility from a young age, so among other things, they don't get caught in debt traps, and they understand the evil of "minimum payments".

Fortunately, the author is only 38, and has the opportunity to change her financial situation. Not an easy task, not without a lot of sacrifices and discipline, but hey, that's what I'd call real adulting.

The fact that the author wrote this article, journalist going to journo, without recognizing her own culpability in the sitution indicates to me that she really hasn't learned anything which would allow her to 'right the ship'. If anything she is doubling down on the habits that caused her trouble in the first place. If she were a bit wiser she would have written an article advocating for bankruptcy regulations to be reformed to allow the discharging of student loan debt as once was allowed. (the change in this policy was another gem from the George W. administration). Then she could say she's willing to accept the hit of bankruptcy to clear the slate to turn her financial life around. Instead her plea is 'give me money, no questions asked, because I make poor choices and I'm not willing to accept it'.

This article is about COVID relief to Federal student loans repayment and interest rates. Her FFELP loans are effectively Federal even though they are owned by a private company because they are guaranteed by the Federal government. These are not private student loans though they are currently owned by a private company. So she can consolidate her way out of the situation I believe and then take advantage of the 0%.

She's asking for basic fairness for govt backed loans nothing more.

Fairness does not remove the underlying math of her situation. Even at 0% interest she still has more than 100K in debt which is approximately 3 times her average salary. Treating this like a mortgage (3 times your yearly salary is a good ratio when buying house) she may be able to pay this off in 25 to 30 years. Thats basically the rest of her whole working life. So no asking for simple fairness will not alleviate her plight, bankruptcy on the other hand would if she could discharge the debt.

People seem to blame the people giving out loans or the people receiving them. However, isn't this all the colleges fault for dramatically increasing their tuition over the last 20ish years?

Student loan forgiveness would be nice for the people who currently have student loan debt, but tomorrow, a whole new group of young people will be signing these loans and so what then? If the cost of higher education is allowed to rise unchecked, we are just going to continue to have this problem, no matter how many times we forgive loan debt.

IMO we need policies similar to rent control on college tuition.

Idea: make universities fund the loans. Then they have an incentive to monitor student progress and make sure the student graduates and has a reasonable plan to make money to pay back the loan. If they make a lot of bad loans, they'll need to fire some of their cushy Dean and Assistant Dean jobs.

Slightly more radical idea: Universities get paid a percentage of your earnings for a set number of years after you get out. Forces them to care that you're prepared to get a job when you get out.

Education is free in many countries. Tax money goes direct to university places and subsidisation...

It's not entirely free, but rather the costs are spread among all taxpayers.

Can someone tell me the reason of all loans only student loans are non bankrupt able?

I think student loans should be 0% interest forever.

There needs to be a meaningful repayment schedule, though. Otherwise I can run up the debt and never pay it back, thus making it free. Accumulating interest at least keeps you “interested” in paying back sooner than later.

I'm sure the IRS can figure out a way to keep people interested. We already get a deduction for interest so I'm sure they can incentivize repayment.

then all student loans would be be via the government, as why would any financial institution loan the money at 0% even more so now, with the level of default that high?

Is that possible, certainly, is there enough will from the people of the U.S. to make it a priority to pay an increase in taxes, no.

I think people should be responsible with their choices and that these sort of debts should require a class be taken before you have access to this level of debt.

>then all student loans would be be via the government

They already are effectively.

Private student loans are for the difference between what the government will loan out at for the tuition/cost of living costs. The government doesn't guarantee them. The problem is you can't discharge private student loans in bankruptcy. So they are personal loans that get special treatment.

There could be a case made for educated people paying more taxes over the years, so in that respect there could be some "externalities" to support a zero interest rate.

That and the fact that large institutions are paying very little to borrow money nowadays.

So maybe there is an argument for a "wholesale" interest rate.

I thought it is also impossible to default on student loans.

From the banks perspective to make the money back, that it takes for a lot of people to payback their student loans, means they end up charging massive interest.

I don't like to see people placed in a financial situation that is a massive hardship, but the details were there, they weren't tricked, it's not like they are people loan sharing these loans. The people go to them, have the terms presented and seemingly take the loans that put them in a world of hurt.

Many of these loans, have you building interest the whole time you are in school. So you end up owning principal + 4 years interest the day you graduate, that's a bad deal that students take every semester.

And you can't easily discharge the debt, but tons of people just don't pay their loans back. And many more that take 10 times as long as they agreed to.

I think something like this might be a more reasonable approach than forgiving student loan debt completely. There is little risk to banks servicing federally backed student loans, so interest rates should reflect that. There is a cost to servicing the loan, and banks should be compensated for that, but I don't think student loans should be a large government backed profit center for banks.

Zero risk isn’t zero cost. Banks pay interest to depositors, pay for loan servicing, have staff and marketing costs, etc.

0% would just be another handout to those least entitled to deserve one. The average college graduate will make roughly double the lifetime earnings of a high school graduate. Why should high school graduates pay more in taxes to make college loans cheaper for their bosses?

The college graduate will pay at least double in taxes. Will hopefully also deliver more in terms of innovation a competitiveness.

It could be easily seen as an incentive.

The college graduate only pays more in taxes because they make immensely more. If your wages were doubled, would you complain about paying a quarter of the new earnings in taxes?

They will contribute innovation regardless, why should they be allowed to foist their education costs on their subordinates?

Yeah... I would even be fine if the govt covered the cost of servicing the loan to keep the interest at 0%.

The federal government used to subsidize the interest on some student loans. Isn't this effectively making the interest rate 0%.

Just run the program through the IRS.

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