October 2, 2007

We have choices, do we not?

In my early years of college, I worked for Sallie Mae - the folks who do student loans. I did collections, skip tracing and customer service. It was a GREAT experience and I learned lessons in how to treat people that still benefit me today. For example, I rarely have issues with customer service because I actually treat CSRs as if they are humans with feelings - imagine that. The experience at Sallie Mae also taught me to be very careful when it came to getting student loans - I learned that it was very important to only take out as much loan as you could actually pay with your starting potential salary when you actually graduate. Notice how I emphasized a few words such as "actually pay" and "starting potential salary"? Meaning, NOT the salary that you will make after being in the work force for several years. After Sallie Mae, I went on to work at KU's Student Financial Aid Office for a few more years. There, I learned, a good financial aid office will help the student determine the amount of loan that could be taken out, according to your potential salary. For example, most liberal arts majors realistically should not be taking out $100,000 worth of student loans.

So, when I came across an article bemoaning the rising cost of education and how student loans costs could haunt the economy, my hackles got risen. So to speak. This section, in particular, pissed me off:

Kristin Cole, 30, who graduated from Michigan State University's law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, is scheduled to jump to $800 in a year or so, confronting her with stark financial choices. "I could never buy a house. I can't travel; I can't do anything," she said. "I feel like a prisoner." A legal aid worker, Cole said she may need to get a job at a law firm, "doing something that I'm not real dedicated to, just for the sake of being able to live."

WTF? She chose to take out those loans and now she is complaining about having to work in a firm, something that she is not "real dedicated to"? If her dream was to be a legal aid worker, she should have rethought the loans. Holy crap, it is not rocket science to figure what a legal aid worker can look forward to in the terms of salary.

Then, there is this story:

Dr. Paul-Henry Zottola, a 35-year-old periodontist in Rocky Hill, Conn., faces paying $1,600 a month on his student loan on top of a $2,300 mortgage payment and $1,500 on the loan he took out to start his practice. His credit record remains solid but he owes more than $300,000 in student loans as he and his wife, Heather, an elementary school administrator, raise two young children. "It would be very easy to feel crushed by it," Zottola said in an interview. "All my income for the next 10 years is spoken for."

I know that getting an education to be a doctor or lawyer is expensive. But in Zottola's case, what did he expect? And besides, he can see an end to the means. Is it not worth the investment of 10 years to put his family towards a better future?

I did take out student loans, I did get a little money from my grandma and I did have a job during college. I did not, however, fulfill my lifelong dream of being an anthropology major or a linguistic major. Nor did I ever feel it was my right to pursue those degrees. I certainly did not dream of being an accountant when I was a little girl, but I did pursue accounting because I knew that I could make a decent living at it. In that vein, I did get a few student loans to ease the financial load and to pursue my master's degree.

Yes, a college education is getting expensive, but we still have choices. Personally, I think we are a lucky bunch of fools here in the US that we even get the opportunity to take a loan to further our education. My India-born husband from a poor family had to study his balls off for a standardized test, sweat out the results and then had to move away from his family where he only got to visit them once every few years. When his mother died, he had not seen her for 2 years. However, if he had not made those sacrifices, he would not be here because a "student loan" was not an option for his family.

So, no. I did not particularly enjoy paying off my loans. In my early years of working post-college, I would cry at the beginning of every month. It was so scary to be alone and trying to make ends meet. Furthermore, it did not help that I had to use my credit card way too much because I had to buy a brand new wardrobe for my Brand New Professional Life. But I did pay it off, little by little. And to this day, I still view the fact that I could even take out a student loan to further my eduction as a privilege. Because it was one.


Modern Day Hermit said...

Wow. I am dumbfounded by the attitudes expressed here. I wonder if they chose these quotes due to how ridiculous they sound or if these types of comments were standard.

Cagey said...

No, I think these folks truly are feeling the desperation of having such a mound of debt over their heads. When I worked in collections, these sorts of comments were standard. Maybe that is why I have grown such a cold, cold heart towards them.

-qir said...

I have that numbing cloud of debt. Oh the phone, she rings and rings.

But the other side of the issue is a pretty blunt question -- how much should economic issues shape the path to employment? Imbedded in that are other questions; for example, do we want industries to be filled only with those people who had the financial means to get there?

This is one area where I don't think a purely economic approach to a broad social concern works very well. They high cost of an education is extremely problematic, but I think limiting education to those who can afford to pay up front has worse consequences.

Shalini said...

I had to take out student loans for my Master's degree in music with no real assurances as to what my future income would be. In our field, the range of possible salaries is very wide (from a someone who teaches private students out of their house to those who are lucky enough to performs as soloists all around the world) and scholarship money at private music schools is extremely limited. Yes, I probably could have moved out of New York City and gone to a state school that would have cost less, but I wouldn't have had the same opportunity to study with incredible teachers and perform with other musicians of an exceptionally high level. Luckily, I have been able to get to a point in my career where paying off my loans is doable but I know that's not how it is for many others in my field. However, given a choice between accruing massive debt while pursuing my dream and dropping out of music to do something else because I was told my potential salary may not be enough to pay off the loans? I have to say I would always choose the former.

I agree with the comment from -qir that the real problem is how much education in this country costs. I realize some people bite off more than they can chew with the loanswc, but sometimes you do what you have to do to get where you want to be in life.

Cagey said...

Oh, I am not saying that student loans are a bad thing - not at all! I can offer up so many examples of folks who took advantage of student loans in a responsible manner. I also know so many folks who worked their way through school, little by little - my parents for example. Not an ideal to get through college, but it can be done.

I just do not think everyone is "entitled" to get their dream degree at their dream college then go on to have their dream profession. Not unless they actually want to pay for it. Why did I go to KU, a state university? Why did I get an accounting degree? Because that is what I could afford.

Some of these articles I have read concerning the inability to meet student loan payments totally smacks of "I deserve to have that education".

Monkey McWearingChaps said...

It reminds me of the predatory lending scandal in the mortgage industry. I can see both sides to the issue.

I enjoy the once-in-a-while sigh about my student loans but I've always said how privileged I feel to live in this country, where good educational opportunities and career possibilites abound.

I think it's easy to think "DAMN, next X years" and think life will never happen. But I think of it this way. When I'm 36 years old, I'll be debt free and all the money I pay for loans goes as additional savings. And for the doctor in the example, that is DEFINITELY a lot of money. Even for me, with federal loans, it's an extra 6K a year. If I didn't have the degrees I took out loans for...I wouldn't have the projected salary and current salary I currently have...not on my B.A.. That's what it means to make "an investment in yourself". But you have to be smart about that investment, from the very start, at the age of 18. Sometimes that means going to your state school because you know medical school is down the road or whatever.

I'd also say that when I was looking at post law school jobs I was using the calculus of (Paper Salary - Tax) - (Student Loans) to figure out what "Paper Salary" had to be for me to eke out an existence. Because that (-Tax) factor sure does make a difference!

Cagey said...

I did think of you (and QIR and Monkey, too) when I was writing this post. I was hoping you would reply because I was curious what you would think and say.

Your comment "but sometimes you do what you have to do to get where you want to be in life." is a responsible, reasonable way to look at this. One that I agree with. I am not saying that folks should not take student loans out in such a manner. What probably rankled me most about the article was the "Woe is me" attitude - keeping in mind that for over 2 years, I heard that same attitude while working at Sallie Mae.

Monkey McWearingChaps said...

Before what I say comes off as "let the poor eat cake"-I just want to say that I MYSELF gave up (okay, was forced to give up) Cornell and Northwestern because my parents correctly saw that since I was only going for a B.A. in the arts, and had told them in no uncertain terms that I did not want to go into anything quantitative, that the loans were going to be way too burdensome. I'm not suggesting everyone make the choice I did, but going to your state undergad is not going to be as important if you want to go to go on graduate school. I would only recommend the "dream college" to kids who can afford it, are going to get the connections they need (like say if the school is Harvard), or have no intention of going on to graduate education.

Cagey said...

You hit the nail on the head for me. Some perspective is needed when one signs the dotted line for a student loan.

Yes, when I was in my mid-20s staring down the shotgun barrel of no more School Deferment, it sucked ASS and it was scary. But, here I am, 36 years old and they are paid off. ;-)

Working said...

Looking at the figures, it seems that both of them will probably pay off their debt in 30 years. I don't have student loans myself, but I can see why that would be overwhelming. I've seen the tuition my students pay, and those figures don't seem out of the ordinary. They probably do feel lucky that they were able to pursue these careers when they didn't have the financial means to do so without loans, but I can't imagine people running around saying how grateful they were to have this kind of debt.

Monkey McWearingChaps said...

I also want to say that sometimes when I see people going on awesome trips (I used to belong to a travel messageboard) I get sad because all the money I spend on loans, I'd be able to take a trip on that. Because fun always looks more awesome than the daily grind, so I can understand why they're whining. But, I always remind myself that I catapulted my salary and income potential by taking the education over the RTW trip. I ensured that I will never have to get married solely for financial support (though being part of an economic community would be awesome). I will have money to live on nicely in the future. Without my education I would not have anything. Also, I would still be answering phones and I'm not good at that.

I will say, though, that for law school, it's...a bit more deceptive than other industries. I mean, no one goes into teaching for the big bucks, but law is generally sold as a "money" profession and law schools tend to be really cagey about their employment stats. Plus, I do genuinely think it s*cks that you basically have to be a rich kid to work for a non-profit or a small town lawyer. It's like in the end all the stuff for poor people who need legal services will be undertaken by big firm associates who want to pacify their conscience temporarily (j/k biglaw lawyers, don't hate me!). To that end I'd like to see more loan forgiveness programs for people who go out of their way to help the indigent-especially in medicine and law. Realistically, it is becoming impossible for anyone except the Kennedys.

Mojavi said...

Did I want to go to college in Kansas? No. Did I want to go to NYU? Yes. Could I afford NYU? Hell no! SO I skipped my happy ass to Kansas where my GI Bill from the Army could pay for my education. I didn't like having to take out loans for my Masters but hell, I don't like doing a lot of things. I am just happy I was able to do it. So while I don't have the 100k's of loans a doctor or a lawyer whould have I sure as hell ain't makin' their salary now or ever. However, I do recall many students taking out and maxing their semester loans so they could go shopping or drinking. I also didn't do that. Life is about choices and they should just be damn happy they had the choice to make.

Modern Day Hermit said...

I, too, don't think education should be something only the wealthy can afford. BUT, at the same time it is what it is and given that fact I find it a little odd for the individuals quoted above to make the decision then complain that it puts a cramp in their lifestyle.

These particular quotes stink of being spoiled and irritated that they have to repay a loan that they signed up for. Especially the lawyer who can't do anything fun and has to get a job she doesn't want to pay the bills...how many people have jobs they don't love because they have families to care for or other responsibilities. It's called life.

There are so many outlets telling us to get something or do something because we "deserve" it. That it is owed to us just for breathing the air around us. That we need it and we aren't whole people unless we acquire or do the infamous *it*.

Every choice you [metaphorically] pay the price, a lot of folks like to make decisions forgetting the consequences behind them.

I just think a lot of folks need to look at the positives instead of the negatives all the time. Not that it is bad to complain...I certainly do my fair share and I think it's healthy to do so every once a while. There are so many that have it a LOT worse. Too many people want it all now without putting the work and sacrifice that is required to allow plans to come into fruition.

J said...

You know what my biggest concern is? These people who are quoted are most likely saving nothing for retirement. If it takes someone 20-30 years to pay off their college debt, when are they ever going to retire? Their own kids are going to be even further in debt, if their parents can pay nothing toward their educations, since at that point they'll be needing to work even harder to have a hope of ever retiring.

I certainly hope they realize how valuable social security and medicare is going to be to them one day and vote accordingly.

It's also interesting to ponder the differences between paying here and say England.

Celebrate Woo-Woo said...

The comment from the doctor isn't nearly as bothersome as the one from the lawyer. His sounded more like it could get him down, but he hasn't let it.

The lawyer's "woe is me" attitude really did get to me. So, she okay with accepting money to get into her dream profession, but she thinks it's unfair that she'll have to work in a particular field of that profession that isn't her dream so she can pay that money back? Isn't that what she agreed to do...pay the money back after getting that education?!? It reminded me of someone that applied for my job before me. He'd just graduated from a local public university and wanted to start his employment as a manager making $75,000/year. That business management degree doesn't entitle you to start managing employees when your only employment history is a pizza delivery driver. While that lawyer wants to be in a lower-paying field and still survive, the lesson for both her and the manager-wannabe...sometimes you need to start where you don't want to in order to end up where you do want to.

Sister Big said...

I got the degree I didn't want the first time, worked five years and put myself through graduate school to get the degree I did want the second time. It was harder than going straight to grad school, but I'm glad I did it that way, because I didn't have any additional student loans on top of the undergrad ones I inherited when I married my husband.

School is way too expensive, but you can make it a lot worse by taking out too much in living expenses, too. It helps to have a job while pursuing graduate degrees - I'm not saying it doesn't suck - but it helps.

Stephanie said...

I've got just about $100K in law school debt hanging over my head, and sure I whine about it occasionally (okay, frequently), but I really wouldn't have it any other way. Yeah, it's about a quarter of my monthly salary, and sure, I'd rather spend that money on vacations and decorating my apartment and such, but I'm not going to be in debt forever. For me, the trade off of going to the law school I wanted and (eventually) landing in a job I love are worth it. I still reserve my right to complain though, because damn that's a lot of money. :-)

I know I could have gone to a lower priced school or one that gave me more grants and scholarships, but I was really sold on the location and programs offered by the school I chose to attend. Sometimes I wonder why I didn't just suck it up and go to another very good school in the same city for practically free. But I don't regret the choice I made because I'm happy and I'm making do with the salary I have. I mean, it's not like I'm starving or anything; I'm just having to delay some of the luxuries some of my other friends have these days.

Anjali said...

You hit the nail on the head with respect to law school loans. Law schools tell you about all the money you're going to make, and how the more reputable school you go to, the better your chance of passing the Bar and getting a better job. Well, my friends who took about $150K in loans started working at big firms, and then realized that these high-paying firm jobs basically suck the life out of you -- you end up working 100 hours a week for a decade, and before you know it, you forgot to get married and have kids when you needed to.

Every single one of my friends who have huge loans, left their high-paying firm jobs and now work for the government because they want a life. And their loans are killing them.

(And in my opinion, anyone one who works for legal aid or other nonprofits after law school should have most of their loans forgiven.)