I’m going to be completely honest with you, dear reader, and talk some personal finance numbers as a means of illustrating a point. If that makes you uncomfortable, come back tomorrow for something less personal.
About a year into starting up my freelance business as a web developer, Sarah, my wife, determined that it was time for a career change from medical receptionist to becoming a school teacher. She’s had a passion for teaching for a long time, but it took a while to come around to the idea of doing it officially. We scrambled to make up the loss of her income in our budgeting, but with some tightening and the support of student loans, we were able to make things work while she got school.
She hadn’t really planned to get a masters, just a certificate, which would take two years. But after two years, nobody in Colorado was hiring teachers, and we weren’t prepared to move at that point. So in she went for the Masters degree, substitute teaching to make a little money on the side. By the end, I think we accumulated three-ish years of student loan debt for Sarah. No big deal, we were thinking. Teachers make better money and have better benefits than medical receptionists. It will be worth it.
The total for her Masters is way over $30,000. The monthly payments, if I’m reading the paperwork right, will be $650 per month. Combined with her existing undergraduate loans and mine as well, we will be paying $900 when those new loans begin to come due. Sarah’s student loans for her masters in Education are about to come due and I’m worried sick about the burden on our budget. That’s roughly 1/4th of our total personal budget, not counting all my businesses expenses. That’s right. We’re spending 25% of our income to maintain student loan debt. (Not to mention the $400 a month we have to spend in gas living in the middle of nowhere–but that was a personal decision to avoid living in Leavenworth).
Her pay here in Kansas is such that, once the loans come due, she will bring in approximately the same amount of money she was bringing in as a receptionist. It’s a wash for now–taking on the debt allowed her to make a career move, but any income gain is wiped out by the debt payments. Maybe in ten years, she’ll be making enough for it to have made financial sense. Of course there are other reasons why you do these things; Sarah had a passion to teach and wasn’t challenged enough by medical receptionist work. I’m still glad she did it, even if I don’t get to see her as much as I would like. Before, she was home at 4 every day. Now she leaves at 7 AM, gets home from school at 7:30 PM, and spends three hours a night on the couch grading. I’m pretty sure if we total up the hours, she’s making roughly minimum wage for educating our nation’s youth. I could never work those kinds of hours. I now know what real job passion and determination looks like.
So financially, we’ll get by okay, with more tightening and more hustling for work on my pay. We can consolidate her loans into 20 year loans and get the payments cut in half, pay them down on our own schedule as money allows, but if we do that, she loses any debt forgiveness for teaching in low income schools which could be potentially helpful.
We really wanted to have a kid and buy a little house in the next year or two. I don’t see how both of those things will be possible, fully comprehending the effect of these loans on our budget. Instead, the money I would have spent on those will likely go to paying back as much debt as I can. Scramble to escape it as fast as possible I guess. We’ll be limping along with our old cars as long as humanly possible as well. Debt is the enemy.
I’m not complaining. We made our decisions, and we’re living with the consequences. I just wanted to offer us as an anecdote on what student loan debt does to families. If you’re wondering why people are putting off major life decisions longer and longer, look no further than federal loan assistance. And if I ever hear anyone complain that teachers get paid too much in my physical presence, I am afraid I will Hulk out and smash everything in a mile radius, including the person saying that.
You’ve been warned.