How do you pay back an $87,500 student loan with a $22,000 per year job?

[HamYankee]

Totally agree. The girl made a common mistake. She didn't think about how she would pay back the huge debt with a mediocre career. Everybody thinks college is a right and also necessary in today's economy. I don't think so.

If she'd gone into a skilled trades apprenticeship, it's possible she would have gotten paid while going to school and earned 2-3 times her current salary when she got out.

 

[hornadylnl]

Start your 529's for your great grandkids now.

 

[Que]

People never believe college is a good choice until their factory shuts down and the requirement at another job is a college education. A new graduate may start out with meager pay, but it doesn't have to remain like that. A degree and five years of experience says a lot.

 

[hornadylnl]

People never believe college is a good choice until their factory shuts down and the requirement at another job is a college education. A new graduate may start out with meager pay, but it doesn't have to remain like that. A degree and five years of experience says a lot.

That's why you go work for an employer that's too big to fail.

 

[calcot7]

Go back to community college for free under barry's free tuition plan then get a job you are specifically trained for and then when you get laid off you can go on unemployment?

 

[TiMMaY]

I watched an interview on the news one day with a student load expert. She said that high school students should rethink getting a job in school and use that time looking for and apply for grants and scholarships. There is a lot of money available, free money, that all they need to do is apply for.

Another avenue that kids can get help with is through the Indiana Department of Veterans Affairs. If the kid has a parent who is rated with a service connected disability they can go to a state sponsored school like IU, Purdue, Ball State and Ivy Tech. They will pickup the cost of tuition, but you will still have to cover the fees, book rental and room & board.

My wife applied for every grant and scholarship she could find when she was in high school. After 4 years at Ball State she graduated with 3 undergrad degrees. After she was done, she owed nothing and she paid out of pocket nothing. She then went to IU for her graduate degree and after two years she owed nothing, but we did have to paid out of pocket less than $2,500.

 

[bobbittle]

I thought the student loan reform made it so that barnone, you could never be required to pay more than 10% of your gross income per month.

Should be some sort of income-based repayment option available, you have to fill out paperwork with your student lender.

This. There are limits on what can be required to pay. Payments just go forever.

What is the degree in? There are loan forgiveness programs out there.

She can have her loan reduced to 10% of her gross income.

Some portion of these have to be private loans, which are not covered under any of the government programs. The max you can get in federal student loans is $31k/$51.5k depending on whether you have family support or not.

Income based repayment might help some, but it doesn't stop interest from accruing, so he total loan amount could increase significantly while she was paying the agreed upon amount.

Loan forgiveness programs are a joke (in most cases).

 

[GodFearinGunTotin]

People never believe college is a good choice until their factory shuts down and the requirement at another job is a college education. A new graduate may start out with meager pay, but it doesn't have to remain like that. A degree and five years of experience says a lot.

I remember when I started out as an engineer, my salary was less than that of a journeyman electrician. On top of that, I had to take on some debt (not anywhere in the ballpark of $87K) and other than when I co-oped, I didn't get paid while in school. So, an apprentice that topped out the same time I started was very likely money ahead of me...and was for several years. Fast forward 30 years, at the time I left, I was probably at 2 times of a journeyman (base salary vs. a 40 hour check).

I forget exactly how it went but when I started out, the school of thought was something like a degree would end you up a million dollars ahead of somebody that didn't get one. Of course, that was before the everybody needs a degree and so many companies started requiring degrees for jobs that don't really require it.

 

[MCgrease08]

The outlook isn't as bleak as you might think. I work in corporate communications and I walked a very similar road. The following are practical steps she can take now to get some real experience that can help her land a job. I have done all of these tactics, and they work.


First, she needs to read this... The Well-Fed Writer: Financial Self-Sufficiency as a Commercial Freelancer in Six Months or Less: Peter Bowerman: 9780967059877: Amazon.com: Books
It is required reading. Buy the book for her if she can't afford it. It is the best career investment under $20 she can make.


Find a non-profit and volunteer - Non-profits always need help getting their message out to the world. She can offer to write press releases, blog posts, fundraising letters, work on social media campaigns etc. This can get her tons of real-world experience quickly and she will start to build out her network and interact with other local professionals and businesses.


Partner up with a local graphic designer in the area in a similar situation - This can be a student, or someone else just starting out. The point is that the two of them can team up to build out their portfolios. They can trade services with each other. The designer will need a copywriter to round out their work, and she will need a designer to round out hers. Start collaborating on different marketing pieces and building up a portfolio.


Look for bad communications and make them better - When I was starting out I scoured the web looking for bad writing and then I would fix it. Once I found one with terrible writing I made it better. Then I had a comparison document I could take back to the company and say, "the writing you have on your website is terrible. Here's how I fixed it." Sometimes they would hire me to fix the problem, sometimes they told me to take a hike, either way, I had a clip for my portfolio. (You don't always have to get paid to get a good clip.)


Learn photography & video editing - These are two more skills that will make her more well-rounded and attractive to a communications team.


Find a PR firm that will let her shadow for a few days/ a week - Most corporate communications teams will farm out some of their work to a PR firm. The more she understands about this world the better, so she can speak intelligently about it when she lands an interview and talks to a hiring manager about a job.


Know social media - This doesn't mean having 500 Facebook friends. It means knowing what businesses do social media well and knowing what type of campaigns they are running. It means understanding what metrics businesses track, what type of interactions and conversion rates they are looking for. It means following the thought-leaders of the industry who are on the leading edge of digital communications.


Network, Network, Network - Go to local events for young professionals. Get involved in the local county Chamber of Commerce. Scour the internet for free webinars focused on the skills she wants to build up. She needs to get out there and understand the landscape of the industry.


Use LinkedIn - If she doesn't have a LinkedIn profile she essentially doesn't exist in the business community. She will use LinkedIn to connect virtually with all of the people she met at the real-world networking events above. This will expand her network exponentially.


There are hundreds of other techniques she can use to build up her skills. Most of them can be found in the book I linked to above. I used these techniques myself and went from a job making $26,000 per year to a job that paid triple that in about three years. It's hard work, and it takes time, but it works.


Longbow, I've sent you a PM with my contact info. I'd be happy to offer this young lady some additional advice if she wants to get in touch.

 

[Leadeye]

Hear this way too often these days and it always grates on me. The education/industrial complex has cheapened the high school diploma by lowering the bar and at the same time made college more expensive. Only advice I can give is find the best paying job you can and keep expenses as low as possible.

 

[spec4]

What is interesting to me is that at some point between zero debt and $87K, this person and her hopefully more mature and experienced parents would do a reality check. To incur debt like this and end up in a job paying what she gets is insanity. I know my comment isn't offering a solution, wish I could.

 

[KittySlayer]

Great at advice from McGrease.

People never believe college is a good choice until their factory shuts down and the requirement at another job is a college education. A new graduate may start out with meager pay, but it doesn't have to remain like that. A degree and five years of experience says a lot.

With all the college degrees out there having one to get a job interview is almost like the minimum threshold of a High School degree that many of us were familiar with years ago. It still has to make economic sense and still takes hard work to come out of college with an employable major and a minimum debt.

For young women there are piles of Title 9 money out there. You don't have to be a terribly talented to get an athletic scholarship. Spend all four years in high school in a sport. Work hard, show up for all practices, train in the off season, stay out of trouble.

 

[BehindBlueI's]

She has a business degree in corporate communications. There are a glut of people with that degree and even more out of work that did it in the past. She has no experience and gets killed when she goes against experienced job applicants.

A nursing degree is cheap and can lead to a good paying job quickly. Nurses don't just work the floor forever, and an additional degree could get her into management or admin pretty quickly.

My first wife had a degree in chemistry. She ended up getting a degree in nursing very quickly with a BS to RN to BSN program using her existing degree, then tacked on a degree in psychology, and was quickly making near 6 figures with the potential to do much more.

 

[CathyInBlue]

Start your 529's for your great grandkids now.

Yeah. Someone's gotta pay for Obama's free CommColl for everyone else.

 

[ArcadiaGP]

My short answer: Don't get loans like this. If you can't afford it, don't do it.

College is becoming more and more pointless.

 

[Miller Tyme]

What is her degree in, most people with high student debt did it to them selves by getting degrees ( sometimes Masters) in stupid things like opera or religious studies, which last time I checked didn't pay to well.

 

[eldirector]

My short answer: Don't get loans like this. If you can't afford it, don't do it.

Totally agree with this.

College is becoming more and more pointless.

I could not agree less. Masters in some random esoteric subject? Yeah, pretty worthless, unless you are the one person in the world with that knowledge, and there are a few thousand people that are willing to pay you for it.

But, there are MANY community college programs, 4-year programs, and even 5/6-year programs that are very inexpensive to graduate from, and pay out VERY well. Healthcare is still doing quite well. Many IT programs are still doing fine (be selective, though). Some business programs are doing very well. In the end YOU still have to have the drive to DO something with it, though. A degree just opens a few more opportunities. It is up to YOU do make something of it.

So, back to the OP... How to pay off $87.5K on 22K? It will take 40 years. Assuming no interest, and no career advancement. If you don't want to live in your parent's basement until the end of days, start making better choices. Like, right now. You are only making about $10/hr. Get a job at WalMart (or similar) and bust ass. You'll make more. Get 2 jobs. Eat rice and beans. Walk to work. Use every windfall you get (bonuses, tax refunds, inheritance, etc...) to pay down your debt. Life is going to be a little hard for a while. But, I bet you learn more in the first year than most do in a decade!

 

[drop45]

Marry a rich, fat, Greek guy......wait did I just say that out loud?

 

[yeahbaby]

I have two nieces that got their UG in early childhood development. Basically pre-school, kindergarten. The oldest hates her job and is lucky to make $25K per year. Maybe getting a masters might get them into an administrative position making a bit more money. The thing is it appears they never received advice from my brother and his wife on career directions to take. Not telling them what they should do for the rest of their lives. Just some good ole common sense hey if you are choosing this path expect this. Plus there are a lot of career centers associated with universities. I am all about following your passion. But you need to have a reality check of what you are getting into. If you are cool with that, wonderful.

 

[CountryBoy19]

She, and her parents, didn't make a smart cost/value calculation before signing for all those loans. Sorry, but it's like borrowing $50k for a car that's worth $20k - you just won't get a payback on that investment.

Would be interesting to hear what she studied, as not all degrees are worth the same in the real world. Have to decide how much you want to invest in a degree where the jobs only pay $20-30k a year.

Summed it up very nicely. Don't pay insane amounts of money to go to college for a job that won't pay off. If the job market is over-saturated in the career field you want then it's time to look to other career fields or be prepared to have a long, hard fight to earning a good wage.

1st...do not go to college and get a degree that leads to a 22K a year job.
2nd....refer to #1 and things will work out.

My niece was doing much the same in here course of studies and BIL pulled his help. She has since changed course.

+1