Living With Student Debt: “No Way Out Unless I Win The Lottery”

Ann received her undergraduate degree in 2017. Eight months later, she started a master’s program, which she finished last December. “I graduated with a total of $114,000 [in debt],” she says. “I’ve been working full-time since January.”

Right now, she earns around $2,400 a month and has $109,000 of debt remaining. Her federal student loan payments are paused thanks to the COVID-19 suspension, in effect until January 1st 2021, but before that, she paid around $600/month in private loans and $300/month in federal loans.

When she received her first $900/month bill after graduating, she was shocked. “I knew what I had gotten into, but I’d never expected it to be so much per month,” she says. “I did try to lower it, but I was told I was ineligible for multiple types of repayment plans. With my private loans, I tried to get my payment reduced, but they told me I couldn't because not all of my loans were at the same place in repayment status.”

Getting a lower monthly payment or refinancing the loans has been difficult, because there’s often a backwards logic applied to who qualifies. “I’ve tried to refinance through multiple companies and banks, yet no one will refinance me because of my debt-to-income ratio. But my only debt is my student loans — which is what I’m trying to fix.”

Right now, she has about $3,500 in savings. “I had more, but I put a large chunk of that towards my loans.” Knowing she has around 20 more years of being in debt is a huge weight. “[My partner and I] talk about the future. We want to buy a house. But my loans kind of hinder everything,” she says.

Her priority initially was to overpay as much as she could. But COVID-19 put the brakes on that. “I’m feeling pressure to put more in my savings, because when the pandemic first started, I got a huge decrease in hours for about three months,” she says. “I definitely felt that decrease in my income and relied on my savings. If this were to happen again, would I have enough money?”

“This is such a harsh reality a lot of people are facing,” she says. “When I think about my job versus my school, it’s kind of sad. Because of course I knew I would come out with debt, but now that it’s here I’m like, ‘Why did I do this to myself?’”

Blaming people for having student debt is a common refrain among those who see the issue as a personal failing and not a national crisis (the total U.S. student debt is over $1.75 trillion at time of writing). But when asked whether she ever felt like she had a choice about going to college, Ann answers, “Not really. I debated community college briefly. But I knew what I wanted my career path to be, so I knew that that meant a four-year university, most likely graduate school.”

What would she do if all her student debt were gone tomorrow? “Oh my gosh,” she says. “I don’t even know. Be very excited? Probably start looking into going back to school for my PhD — because that’s what I truly want to get out of life.”

Charlie graduated in 2019 with around $30,000 in student loan debt. Now they have around $28,000. 

Their monthly payment is $195, which means that at this pace, it would take 12 years to pay the debt off. The monthly payment makes up about half of Charlie’s current income. “I don’t make that much money right now,” they say. Before COVID-19, that was maybe a third of their income. “I’ve only been in the workforce for a little over a year now, so I haven’t found a ‘real job’ yet. I’ve just been freelancing and working retail and hospitality. My income right now is very not-fixed. So knowing I have fixed things I need to pay, but not a fixed income, that’s very stressful.”

Before COVID-19 hit, Charlie was living in New York, paying $850 a month in rent. Because they’re in Texas now, they had to buy a car to get around. And though right now they’re staying with their parents and federal student loans are suspended, it feels a little like the calm before the storm. “I know the next time I move out, I’m going to be completely paying my own rent, so I’m going to have to find a place I can afford on top of car payments and my student loans.”

They’ve looked into refinancing options once before, but the monthly payment and interest rate wasn’t all that much lower. They have around $5,000 in savings right now, but would like to have $10,000, especially before moving back to an expensive place like New York.

“[Before COVID-19], I wasn’t saving. I was saving $20 here and there,” they say. “I only had $1,000 in my savings. And then I started getting unemployment, and because I wasn't paying rent and wasn't paying utilities or my dad was paying for groceries, I started putting almost all of the money from unemployment directly into my savings. That's kind of the weird part — that I have more money now than I did before COVID.”

“[Debt] makes graduating bittersweet,” they point out. “It just feels like a cloud hanging over you. I have close friends who have to make all their decisions based on making their monthly payments. Being in debt makes you feel guilty when you get something for yourself. You’re like, I could put this money toward getting rid of my debt, but I really wanted a new pair of jeans.”

“I think a lot of older people don't realize how much debt our generation is in,” they continue. “It’s not possible to work your way through college anymore, because it’s so expensive. It just tarnishes the excitement of graduating college and going off into the real world and being a ‘real’ adult.”

Vivienne currently has over $100,000 in student debt. She chose “Vivienne” as her moniker for this article, because “Vivienne seems like the kind of girl this would not happen to.”

She’s nervous about what the internet will say about her debt, having seen the vitriol directed at people who talk openly about their student loans. “Last week there was someone who did a TikTok about her debt,” says Vivienne. “Some people [in the comments] were like, ‘Yeah, it sucks,’ but everyone else was like, ‘You’re terrible! This is your fault.’ And I’m like, it’s not her fault. It’s a structural issue.”

The TikTok she’s referencing is by @swankysquirrel1, who tearfully describes how student debt can become a hole impossible to climb out of:

It’s a situation Vivienne relates to. She graduated with her master’s degree in 2010, with about $80,000 in student loan debt. “Now I have $124,000, and I’ve been paying consistently for about seven years,” she says. “I graduated during the last Great Recession, so there were just no jobs. In the early years, when I had no money, I couldn’t pay my loans. I rang up a lot of credit card debt that just destroyed everything.”

She remembers how, during those years, she couldn’t afford to do anything. “The majority of my twenties, I felt terrible about everything. I was living on my mom’s couch,” she says. “I went through a really bad health crisis too. Because of all the stress, I ended up getting adult acne. I remember one time I had my brother's car, and I had to pay for the gas to get me to a job to pick up a paycheck — I paid with a bunch of coins from my coin jar. That was the worst.”

Last year, though, she finally joined the public service loan forgiveness (PSLF) program. “I’m working for a non-profit and that’s been a game changer, because it finally feels like there’s a way out,” she says.

She’s been at her non-profit job for four years, but it took her a while to apply for the loan forgiveness program because the process is so complicated. Last year, a report by the Government Accountability Office found that 99% of applicants to the PSLF were rejected. “I didn’t think I could figure this out on my own,” Vivienne says. So, upon a friend’s recommendation, she hired a lawyer to help her through the process. Even with the forgiveness program, which kicks in after 10 years of steady payments, she estimates that she will have paid close to $200,000 toward her initial debt of $80,000.

Vivienne doesn’t tell anyone about her debt. “Some of the industries that I've worked in, people have come from money. So it's hard to talk about,” she says. She’s found online communities to be helpful. “I feel like I can connect with people in a way that I can’t in my real life, because I never would want people I know to judge me.”

Now, with the federal loan suspension, Vivienne has been able to save for the first time, though she’s still paying about $400/month in private loans. “But the $450 I was paying to federal loans, I’m now just putting straight into an emergency fund, which I’ve never been able to do,” she says. “I need to save up as much money as possible. Because this might be the only time in the next 10 years that I ever save money.”

“I would never want anyone to go through this,” she says. “I just know how it is, and how you cannot live a full life. This feeling of incredible shame makes your body sick.”

How will she celebrate the 10-year mark, when her debt finally disappears? “It’s weird, because I wouldn’t want anyone to know,” she says. “But maybe in 10 years I’d feel different and be like, ‘I paid this off!’ and have a wedding for myself — a giant celebration where everyone can talk about their debt. I’m getting a peek now [with the pause]; it feels like you can take a deep breath for the first time, and you realize that you've been on the point of tears for 10 years.”

Lillian makes around $46,000 a year, and has over $200,000 in private student loans that have gone into default. “I was having bad luck after graduation and getting part-time jobs, or a full-time job and then getting laid off. Finally, [my husband and I] decided that we needed to file bankruptcy, so we did.”

But their attorney didn’t help them pursue a discharge of student debt at time of filing. “By the time the case was done, all of my loans were in default and the cost to get them out and keep them out of default was something we couldn't pay.” They would have to reopen the case for additional attorneys’ fees, and even then, discharging student debt through bankruptcy is notoriously difficult.

“I would have to give them my entire check every two weeks, and we can't live off my husband’s income,” she continues. During the pandemic, she has at least been able to pay off her credit cards, an achievement she’s proud of. She and her husband have a decent amount of money in an emergency fund, but it wouldn’t make a dent toward the defaulted student loans. “My family and even my husband don't know the extent of it,” she says. “Private loans need to be forgiven in bankruptcy. A couple in Colorado just had $200,000 forgiven, and I’ve emailed the attorney they used but haven’t heard back yet.”

Like many others who deal with debt, the shame is an overwhelming source of pain. “I know people read these articles and say, ‘you did this to yourself, you went to college, pay it back’ but it’s not really all that black and white,” says Lillian. “How do you deal? How do you continue living life and get up to go to work when there is no hope and no way out? It’s hard to have a dream in this nightmare. I can't buy a home; I decided to not have children because we can't afford them.”

“I remember calling Sallie Mae back in college just to talk about loans and repayment programs. They assured me I would be okay. And then when things got bad and I was in trouble, they couldn't have cared for a minute,” she says.

Keeping the truth from her husband has been extremely painful for her. “I’m managing my husband’s private and federal loans to keep him safe from default,” Lillian says. “He knows we both have student loan debt. He probably doesn't remember mine is defaulted, and he has no clue the number is so high. How do you tell someone how ugly and bad your life is? If it were me, I would run from the person I love — there’s no way out unless I win the lotto.”

The fact that her debt is over $200k makes every possible lifestyle adjustment seem futile, like a drop in the bucket. “Yes, I could cut a car payment or not go to the gym,” says Lillian. “But I need a car, and I need the gym to stay sane. At this point I live my life like I’m okay. I go to dinner, or I get makeup from the mall, I pay for it and I move on. [Not buying] that $30 foundation isn't going to help me get out of debt.”

“Sometimes I feel guilty that I do a weekend trip or save up to go to Key West for a week every other year,” she continues. “[My therapist] reminds me these things help me smile, and it’s all I have. It feels very isolating and alone. It would be so nice to have someone else to talk with that has a large amount of defaulted debt like me — just to vent or cry.”

Debt can do immeasurable mental and emotional damage to us, and Lillian’s financial situation is a main feature of her therapy sessions. “I talk to my therapist about it every week. I need help. I pray for help. I cry at my desk thinking about it,” she says. “Talking with my therapist helps a little; she reminds me I’m a kind person with a good heart, and I’m doing the best I can in life.”

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