A Cautionary Tale: Makings of an Angry Grad

You may be wondering who The Angry Grad is, and why she wants to bring together a ranty community of fellow victims of the Great Student Debt Con of the millennium. Before I dive in to the heart of the matter, allow me to share a little bit about how this angry grad became The Angry Grad.

The Angry Grad’s spirit animal. Clearly professional-quality image by The Angry Grad.

The Angry Grad’s Story

My student debt woes are largely self-imposed. Sure, there was the economic and social pressure to obtain an advanced degree, and the crash of 2008 pretty much drowned the job market… but still, a choice was made. My choice was to attend a fancy shmancy law school with a price tag of nearly $60,000 per year. After 3 years, that comes to an unthinkable $180,000 for the degree. And before we move on, let me acknowledge that this may be a pittance compared to your own debt. At Johns Hopkins, as of the writing of this post, an undergraduate degree — let me repeat, UNDERGRADUATE degree — for the 2017 academic year comes to a whopping $52,000 per year. And medical school? Don’t even get me started.

If this owl could snarkily raise an eyebrow (eyefeather?) at university price tags and accompanying student debt, it would. Oh yes, it would.

I wanted to find a visual to demonstrate the absurdity of these numbers, but I couldn’t find one I liked (or trusted, for that matter)…

… so I made one myself. You can tell by the clearly professional high-tech look and feel of said graph that I probably don’t make graphs for a living. There are a few questions I ask myself when I’m getting to know a strange graph I haven’t met before — and so should you.

Q: Where did these numbers come from, Angry Grad? How do I know I can trust them?

A: Fantastic question, my friend. Never trust numbers blindly. I am pleased to report that I harvested these numbers for you straight from the source — the Department of Education’s National Center for Education Statistics, in the Digest of Education Statistics from 2015, Table 330.10. I encourage you to confirm them yourselves.

Q: But what about inflation? It’s easy to make a graph look bad if you don’t account for that.

A: You are so right. That’s why this graph depicts all numbers in constant 2016–2017 academic year dollars, as calculated in the Dept of Ed’s Digest of Education Statistics.

But I Digress…

The graph above paints a pretty dire picture, and I (along with many of you) am one of those contributing statistics. After a year and a half of law school, I had the sudden realization that if I was miserable in the company of my peers and the work I was doing today, that this situation would not improve 10 years down the line when I found myself working alongside the same peers and plugging away at the same work.

I escaped prior to graduating, but not before accumulating $115,000 in debt and a serious mental health issue. $10,000 of that $115k was the interest that had accumulated while I was still in school, and which now had the dubious honor of being promoted to full-on Principal, courtesy of the Policy of Capitalization Upon Leaving School. Because who doesn’t love paying interest on your interest?

The Downward Spiral Continues

Due to aforementioned serious mental health issue, I was:

1. Extremely unemployed
2. Remarkably unconcerned about said unemployment
3. Bereft of any day-to-day economic plan, much less a comprehensive schedule to repay $115,000

I limped from one day to the next by waiting tables and various other odd jobs, but these, needless to say, did not help me vanquish my ever-climbing debt. Just like making graphs, displaying a saint-like level of patience while waiting tables is not one of my fortes, and I did not last long at any of these places. I managed to file my taxes and submit said taxes to my loan servicer each year, thus keeping me afloat via an income-based repayment plan I knew very little about, other than the fact that it kept my monthly payments at $0 for a few years, and then rose to $7 after that.

Every month, while I blithely paid the legal minimum payment of $7/month on my loans, they were growing at a rate of nearly $8,500/year. By the time I had made it through my mental health crisis, my loans had ballooned to an unreal $150,000.

The Slow Climb

It took years to find an even keel, but by that point I had also managed to land a well-paying job that provided, for the first time since dropping out of law school, reliable income and health insurance. I had consistently remained current with my loan payments, but had never really taken a hard look at my long-term repayment plan. I told myself that “They’ll get forgiven one day, if I make enough payments — it’ll be fine,” and left it at that. I was, as many of you know, so very wrong.

I remember the day when I said to myself, “Angry Grad, I have some good news for you. You’re an adult, you finally have a stable income, you have sought help for your mental health issues, and things are going pretty darn well. The time has come to face your student debt sitch head-on.” And I did. God help me, I did.

Over the course of several mind-boggling days, I deep-dove into those murky waters:

• I educated myself on the loan basics.
• I demanded the service company send me my complete payment history for auditing.
• I created a giant Excel sheet with automatic payment forecasting, courtesy of the PMT function.
• I then realized how inadequate the PMT function was in navigating the unique world of IBR (Income-Based Repayment, for those new to the game).
• I angrily stomped around the room.
• I spent several hours creating a home-grown calculation solution that combined the specific capitalization rules of IBR and the PMT function.
• I separated out my payments into their separate “token” buckets (which, yes, is a real thing and makes a big difference. More on that in a later post.).
• I completed a second stomping tour. It helped. A bit.

After a few days of non-stop research (and even more stomping), I felt like I had a decent grasp of the terrifying situation and was ready to formulate The Plan.

Formulation of The Plan

I created an aggressive, $2,000/month, 7.5-year repayment plan, starting from that day’s date. It wasn’t pretty, and $2,000 of pure loan repayments each month would be a stretch, but I could do it. While on this loan journey of rediscovery, I realized a few things:

1. No one is ready for this. No matter how much preparation you do, you will never know enough to responsibly take on this much debt.
2. The rules are hard to find, and this is on purpose.
3. Loan servicing companies are not on your side (I mean, duh… but having this proven to me over and over was galling).
4. Even if you know everything there is to know right now, there is so much that is simply out of your hands that you can never expect to make a plan with perfect information. (How about that looming tax balloon payment on non-public service forgiveness? As of this post, that is still on the books, and is on Congress to change… and we can probably guess how well that will go.)

So these are the Makings of The Angry Grad, and I encourage you to share some of your own journeys. Over the next few stories, I’ll continue to rant and rail against this extremely unfair, illogical system we find ourselves in. I’ll share the mistakes and the discoveries I’ve made along the way, in the hopes that this will empower you to find new and unique ways the system will screw you over, rather than falling into the ones I’ve already suffered through.

All I can say is good luck, my friends, and hang in there.

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Read more from The Angry Grad

Student Loan Debt: A Sad State of the Union

The Dark Side of AutoPay