Student Loans: a cautionary tale in today's environment

[u/calonmawr10]

I got into my dream school with a decent scholarship a couple weeks after the stock market crashed in 2008. My parents had saved diligently for myself and my twin sister in a 529 account, but we saw that get cut in half overnight. Despite all that, my mom told me to pick the school that would work best for me and to not worry about the cost because "we'd figure out a way to make it work". I applied for hundreds of external scholarships, but didn't get any. So, I chose my expensive private dream school, signed my life away to Sallie Mae (the solution to pay for it after my savings was exhausted, which I didn't know in advance), and started college in fall of 2009.

I was lucky to graduate with a good job thanks to the school's incredible co-op program, but also saddled with $120k worth of loans ($30k federal, the rest private). I met my amazing husband while there, and he was in the same boat. Together, we make a pretty decent living, but we currently owe more on our student loans than we do on our house. Even paying an extra $1k/month (our breakeven with our budget), it'll still take us many years to pay them off. It's so incredibly frustrating watching our friends from school (most of whom don't have loans) be able to live their lives the way they want while we continue to be slaves to our loans for the foreseeable future. No switching jobs because we want a new career, that doesn't pay enough. No moving to a different city, can't afford the hit to the salary in cheaper areas, or the huge cost of living increase in more expensive ones.

I'm happy with my life and that I was able to have the experiences I did (I absolutely loved my school), but not a day goes by that I don't wonder how my life would have been different if I'd made better financial decisions. Parents, don't tell your kids to follow their hearts if the only way there is through massive student loans, particularly if their career will not let them have any hope of paying them off. Students, have those conversations with your parents. If they say don't worry about it, question what that means and what the plan is. Now is the time to be having those discussions, before you've already registered for classes and are looking to pay that first bill. Don't make the same mistakes we did.

Edit:added paragraph breaks

Edit 2: Wow, I did not expect this to blow up so much! Thank you for the awards! It's reassuring (and a bit sad) to hear so many of your stories that are so similar to mine. For all the parents and high school students reading this, please take some time to go through the comments and see how many people this truly affects. Take time to weigh your college financial decisions carefully, whether that be for a 4 year school, community college, or trade school, and ask questions when you don't know or understand something. I hope with this post that everyone is more empowered to make the best decision for them :)

[u/rubixd]

Another thing I might add is that college/university is not for everyone... and that is not to say you're "less than". It means that who you are, your personality, and what you like to do is something that must be considered.

I know a really smart guy, who likes to work with his hands. He's in a union job, making $80k with amazing benefits and he's under a year in.

EDIT: I also want to add that college/university might also not be for you right after high school. For social growth and general how-to-live development it helped me... but I didn't know what I wanted to do when I was 18, I still didn't when I graduated with my degree. If I went to school now, I'd have gone for something else.

[u/Noinipo12 → u/rubixd]

It's a real shame we pushed 4 year universities and shamed trades for an entire generation of people.

[u/Neyvash → u/Noinipo12]

Seriously. Here in NC we have a shortage of plumbers and electricians. My employer has a "university" where they hire people (I think $15/hour) with no experience, train (and pay) them to be a plumber or HVAC tech, have them certified, and then they have a job waiting for them already. All because these professions are scarce here.

[u/Frundle → u/Neyvash]

Anecdotal, but a friend and I started school at the same time in our late twenties. He went into the electricians’ union and I went to a 4 year on the GI bill. Both of us got back into the market at the same time. I started at 50k a year and he landed in a guaranteed job making ~120k a year. He was earning money the entire time, and while I have no debt, he is much much further ahead. I may never catch him.

[u/[deleted] → u/Frundle]

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[u/Frundle → u/[deleted]]

I’m certain, but that is an extrapolated figure. He is hourly, and it is based on his first month of pay including overtime x 12. That was more than a couple years ago now, but he spent more than a year on that site and his hours stayed pretty steady.

Regarding the data: its not uncommon to see 6-figure total earnings for people in the trades in a year. The range for the professions you listed are just really wide. An electrician, for example, can range from hourly guys in small towns working for manufacturers to guys that own a contracting outfit and still perform all their own work. I assume thats why you specified non-owner. I spent my first couple years out of school working in payroll for a big west coast contracting firm, and now work in data analytics for a firm that serves the industry. You’d be blown away what guys are making on all the data* center jobs around the US right now.

[u/[deleted] → u/Frundle]

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[u/BirdLawyerPerson → u/[deleted]]

Everyone I know who hit 6 figures in a non-college-required job did it on overtime, not on base pay. That's a good way to get a ton of money in a short amount of time, but it isn't really sustainable beyond the age of 35 or so.