Posts Tagged ‘Graduating with debt’

The reality of life after graduating with $50,000 in debt

Thursday, June 20th, 2013

A guest Blog from Sarah at 20somethingbudget.com

When my husband and I first met in 2008, he was finishing his education at Rochester Institute of Technology (RIT), a private college with tuition costs of over $25,000 per year. Needless to say, he graduated with a ton of student debt – over $50,000 to be exact.

He also carried about $5,000 in credit card debt and a $20,000 auto loan… giving him a grand total of $75K in debt the minute he left college. (Holy crap, right?)

My husband was very fortunate in the sense that his paid internship turned into a full-time job upon graduation. Few people are given that opportunity these days. Still, even with both of us working full-time, shelling out $1,000 per month (minimum) towards his debt was an incredible burden for both of us… both financially and emotionally.

What exactly does it feel like to be that heavily in debt?        9694511_s                                                 

Being heavily in debt means working three jobs and cutting back on every possible expense, for the sole purpose of making loan payments. Yes, we have found ways to have inexpensive fun… but knowing that your entire paycheck goes to bills and loan payments is an incredibly unfulfilling way to live.

 It means not being able to take risks – like changing careers, starting your own business, or taking time off to travel the world – because the thought of losing even one paycheck makes you physically ill.

 It means putting off major goals like buying a house, having children, or saving for retirement… while listening to constant reminders from friends and family that “your biological clock is ticking.”

 In short, being in debt means putting a lot of things on hold until that burden is gone. (And yes, some graduates will still be paying off their student loans well into their 40s.)

Four years after graduation, we have paid off my husband’s credit card and auto loan in full. We’re definitely proud of these accomplishments, but still have a long way to go. Despite making all of the minimum payments on his student loans on-time, we have made almost no progress on that front because the majority of our payments go to interest. (Example: One private loan started at $7,000 and is still at $6,975 after 40 payments. How is that even possible?!)

 In summary, if anyone tries to tell you that student loans are “good debt” or “an investment in your future,” ignore them. Even if you are fortunate enough to land a great job the minute you step off-campus, having a significant amount of debt right out of college is a burden that you don’t need.

 Yes, tuition costs are rising well above the rate of inflation. Yes, it’s becoming more and more difficult to pay for college on your own every year. However, it can be done – and the sooner you start planning, the better.