The Tale of Jay‘s Student Loan Story
The Tale of Jay‘s Student Loan Story
Going from the life of a student to becoming financially independent is a long journey. Everyone makes difficult choices when trying to decide their career, figure out loans, and find housing, but by sharing our stories, we can avoid the same pitfalls.
I recently interviewed someone who just went through these decisions and decided to share his story. For the purposes of anonymity I’ll name him Jay.
Jay started his journey studying social science and physical science at his state’s flagship university with a $10,000 national merit scholarship. Although he initially received help from his family to cover expenses during his first year, his father soon lost his job. Jay took paid work during summers, work-study during the school year, and a year off to start his own business, helping to increase his financial resources. With help from the university’s low-income assistance program, Jay was able to graduate with $20k in student debt.
To begin paying off his debt, Jay was promoted from work-study job to a permanent position after graduating, eventually moving on to more fulfilling non-profit work and later a higher-paying job as a government contractor. As a contractor, Jay aggressively worked to pay off his student debt as quickly as possible, and as a consequence, he lived at home to save money on rent. His commute into the city was anywhere from 60 to 90 minutes each way, diminishing his quality of life.
Like many young professionals, Jay wasn’t completely happy with his current position and decided to go back to school for a law degree. Rather than work for a big law firm, his goal was to go through law school and then work for the government for 10 years until student loan forgiveness could pay off his debt. Jay used a scholarship to pay for about half of his first year of tuition, but as the years went by, the price of tuition and the cost of housing increased, but the scholarship did not. As a result, he finished law school with $200k in additional student loans.
Jay now has a government job and a recently purchased home, but is still dealing with $250k in constantly increasing debt. Until his debt is forgiven, he’s locked into a government job with an uncertain future, and is just paying toward interest every month. $250k is a lot of money to be based on a change in politics. Congress made student loan forgiveness laws, and they can just as easily change them or remove them. Based on the administration, Jay might find himself having $200k of debt handed to him with no alternatives. (Trump has already talked about ending the student loan forgiveness program here)
Here’s his advice for people in a similar situation:
- Don’t let student loans take over your life. As you pay off student loans, make sure to keep other financial goals in check
- Avoid long commutes to work, travelling for 3 hours every weekday is both miserable and expensive
- Exhaustively look for scholarships, as they can be tremendously helpful in alleviating student loan debt
- The world is constantly changing in both economics and politics. Just because money is easy to earn now, doesn’t mean it’ll be easy to earn in 10 years. Stay aware of the environment you live in and be prepared for changes.
We all make choices, but we can make them responsibly. By talking with Jay I learned more about how student loan debt can affect one’s financial life. That seeking student loan forgiveness puts one at the mercy of the government and politics. And that we live in a changing place where for better or worse, careers and salaries won’t stay constant.
