According to BGR lore, Kitty and I met as randomly assigned freshman year roommates at college. We came from different backgrounds, had different interests and goals. But we had two things in common:
- Clothing size.
- Student loans.
The former meant that our wardrobes essentially doubled in size while we lived together. It was a rude awakening when I moved halfway across the country from Kitty only to realize the only shoes I owned were hiking boots. Gone were the days when I would get drunk and traipse around our apartment in Kitty’s four-inch-high red heels! Now I would have to buy my own grownup shoes!
But I digress.
The latter was the seed that sprouted into this very blog.
We each graduated with student loan debts in the tens of thousands… a fact that lands us squarely in the average of our millennial age bracket. And the year was 2009… a year after the 2008 recession and subsequent dismal job market. Fun times!
It was our joint effort to pay off our considerable student debt ahead of schedule in an unwelcoming economy that taught us the importance of financial literacy. It was a painful process, and having that debt in the first place set our financial independence back by years.
But this is not simply the origin story of your humble Bitches. It is the story of thousands upon thousands of young Americans. The current reality of student loans is a source of controversy and curiosity. And it’s time we set the record straight.
The student loan crisis, by the numbers
When student loans are discussed, there seems to be a fundamental misunderstanding about how the playing field has changed over time. So let’s look at some statistics.
Between The Yeares of Our Lorde 1987 and 2016, the average cost of a four-year undergraduate degree, including tuition, fees, and housing, has increased 161%. Meanwhile, the average salary for a college graduate in the first two years of their career has increased 2.3%. That’s all adjusting for inflation.
Thanks to our friend Student Loan Hero, we also understand the following:
- There is $1.48 trillion in total U.S. student loan debt.
- There are 44.2 million Americans with student loan debt.
- The average student loan debt for Class of 2017 graduates was $39,400, up 6% from the previous year.
- There is a student loan delinquency rate of 11.2% (meaning the borrower is more than ninety days late with a payment or their loan is in default).
- The average monthly student loan payment for a borrower between age twenty and thirty is $351.
- And the median monthly student loan payment for those same borrowers is $203. (Fun fact: that was literally my exact minimum payment back when I had student loans.)
To put things in perspective, in 1987 students took out nearly $10 billion in Federal student loans. These days, that number is one trillion dollars. The catastrophic recklessness and base greed represented in these statistics transcends cartoonish supervillainy.
But wait! It gets worse!
The cost of higher education has surpassed the cost of living and medical expenses by leaps and bounds. Tuition rises at an average rate of about 5.6% every year. Compare that to the halcyon days of the 1980s during which tuition increased 4.5% every year, and the even halcyonier days of the 1990s, when it rose 3.2% a year. It’s been a’risin’ for nigh on forty years!
And while it’s easier than ever for anyone to go to college thanks to all the handy student loan programs out there, the availability of these loans has fueled the rising cost of higher ed by lending too frivolously. In other words, schools know there’s money to be had in the form of student loans, so they’re charging more to get at dat sweet, sweet loan money.
As a result, a college degree that was once a coveted golden ticket to the middle class is now devalued because of the increased number of college graduates flooding the job market. So your prospects of a high-paying career right out the gate have dropped. AND YET those prospects are still better than those of someone who didn’t go to college or—worse yet—dropped out of college because they couldn’t pay the bill.
The reality of a student loan
I graduated with $28,000 in student loans, which—let’s be honest—is not that bad, compared to some of my peers (my husband, for example, who graduated $45,000 in debt). Two of my three loans were Stafford Loans with interest rates at 6.8%, and the third was a private loan at 11%. I had a ten-year repayment plan.
To illustrate just how out-of-touch older folks are with the reality of a Millennial or Gen-Zer’s student debt, I shall quote my dear friend’s mother, who said to me recently, “At least student loans aren’t that high interest. What were yours, 4%?”
Fortunately, I was able to pay my student loans off in five years instead of ten, which I brag about here:
As you all know, I struggle a bit with mathly pursuits (though I do pursue them with a literal vengeance). Nevertheless, I shall attempt to paint you a number picture of my debt if I had paid it off on schedule. (For the love of Bob someone please check my math.)
I had three loans at 6.8%, 6.8%, and 11% for a total of $28,000. If I had paid the minimum of $203 every month for ten years, I would have paid a total of $33,859.64. That’s $5,859.64 in interest alone. And it’s $33,000 I wasn’t able to save within my first ten years of post-college employment.
- Even adjusting for inflation, the cost of college has skyrocketed while wages have remained comparatively flat.
- The amount of student loan debt and the number of Americans who have said student loans has also risen faster than a soufflé in a hot oven.
- The worth of a college degree has dropped because of high attendance, making college practically a prerequisite to many middle class careers, rather than a rare but effective route to getting ahead.
Running the gauntlet
The student loan debt crisis would be an easier pill to swallow if it weren’t coated in corrupt, unethical shit. In fact, there are various hurdles in place making it that much harder to pay off student loans.
The Navient scandal
Remember Navient? Or one of the other many names they called themselves in order to outrun their tarnished reputation as one of the most brutal, unfair, and corrupt servicers of student loans the world has ever known?
Yeah, last we heard of them fuckers they were in hot water for allegedly cheating millions of student loan borrowers by making “”””mistakes”””” that resulted in driving up loan repayment costs for individuals. They “mishandled loan payments, buried critical information in fine print and set obstacles for borrowers trying to release co-signers from their loans, among other failings.”
The bait and switch of government reimbursement
In an effort to incentivize public service, the American government started a program that would pay off the loans of nonprofit workers. Called Public Service Loan Forgiveness, the program worked like this: you get employed at a low-paying nonprofit, pay the minimum on your student loans, and after ten years the government will pay off the remaining balance on your student loans.
Sounds like a pretty sweet deal, right? The kind of thing that might strongly encourage a young person to sacrifice a higher salary and choose to work super duper hard at a do-gooder nonprofit with the understanding that it’ll all literally pay off in the end!
Except that last year the reality of the program was completely up in the air. Journalists were calling it the “student loan bait and switch” because, as The New York Times wrote, “borrowers could not rely on the program’s administrator to say accurately whether they qualify for debt forgiveness. The thousands of approval letters that have been sent by the administrator, FedLoan Servicing, are not binding and can be rescinded at any time, the agency said.”
So imagine banking on this loan forgiveness program, only to find out like eight years in that the rug has been pulled out from under you. And all that time you spent laboring for low wages and making minimum payments on your student loan was just a huge waste of time.
It sounds like the Department of Education has sorted things out a bit since the bait and switch initially occurred, which is a relief. Except that there might not be enough money to go around, and borrowers who previously were told they were approved for the program might not actually be qualified anymore.
What’s that saying about once bitten, twice shy… ?
There’s no way out
You can declare bankruptcy to clear almost any kind of debt. And while it’s neither a fun nor easy process, it’s near impossible when it comes to student loan debt.
Which is kind of… illogical? You can declare bankruptcy after making mistakes during your adulthood—buying more house than you can afford, making a bad business investment—but not after making a decision in childhood to pursue an education to start a career and get ahead in life.
In essence, we are punishing our youngest and most financially vulnerable citizens for the decision to better themselves. And why? Why is it so damn hard to declare this kind of bankruptcy and not others? According to some (a coupla nobodies who just happen to be attorneys general), it’s because predatory lenders specifically want it that way.
And there’s fuck-all student loan debtors can do about it.
Stupid shit people say about student loan debt
The student loan debt crisis might not be so painful for individuals and a generation at large if it wasn’t used to bludgeon us over the heads as evidence of how much we collectively suck.
Besides the fact that generations are bullshit, being a millennial is actually something I’m pretty proud of. But Student Loan Debt Crisis Deniers juuuuuust don’t seem to get why belittling the hardships of student debt is pretty fucking ignorant. Not to mention cruel.
“It’s not THAT expensive to go to college…”
“Expensive” is fucking relative, you mealy-mouthed carbuncle on the big toe of humanity.
The difference in college tuition affordability between a first generation college student with no parental support and a middle class student whose parents went to college and can afford to foot even part of the bill for tuition is astronomical.
Even the more affordable college options—community colleges and state schools—are raising tuition prices. It certainly doesn’t cost nothing. And it’s kind of a dick move to judge kids for their uninformed decisions while making no mention of the system that asked them to make said decisions without the proper resources and education.
“You don’t HAVE to get student loans to get a college education…”
And the Hindsight Award for Most Unhelpful Timing goes to… this guy!
It’s certainly true that you can get a college education in the United States without student loans. But even to cover the costs of a community college or two-year program, you have to have some money. Even the most generous scholarships rarely cover the cost of books, lab fees, food, or living expenses.
And assuming you don’t have parents helping you pay, that means you’ll need to get this advice when you’re young enough to start applying to scholarships like mad (see above). Because the part-time and summer jobs high school students work certainly won’t cover the bill.
“Well IIIIIII worked during college and got a job right after…”
My dude, so did I. And so did millions of others who went to college in the last twenty years and still ended up deeply in debt. Tuition has gone up while wages remain stagnant. A summer job is no longer sufficient to pay tuition.
I made $20 an hour working as a part-time nanny during my undergrad. It was a great job, and I was paid in cash under the table. Most of that money went to food, transportation, and school supplies. And while I managed to graduate with enough savings to move across the country for a job opportunity… the money ended there. There was nothing left over for tuition.
And that first job right out of college? It paid $23,000 a year including benefits. Don’t tell me all I needed to do to easily pay my loans and save a big chunk of my income was “just” get a goddamn job.
“You signed up for the debt so now you have to live with it!”
It is mystifying to me that we expect people to make major financial decisions with long-term consequences at the age of seventeen. And that we then mock them for those uninformed, youthful decisions when they are old enough to understand what they’ve gotten themselves into.
We’ve written about it at length:
- High School Students Have No Way of Knowing What Career to Choose. Why Do We Make Them Do It Anyway?
- The Actually Helpful, Nuanced, Non-Bullshit Way to Choose a Future Career
And not to point too many fingers at the older generation, but those people told us going to college was a good investment. They told us we’d be able to get lucrative jobs when we graduated. Operating under that information, fuck yeah student loans seemed like a good idea!
“You should’ve just learned a trade.”
Again, give me the use of your time machine and I’ll be happy to oblige.
But can we just talk about the myth of the easy career in a blue collar trade for a minute?
For one thing, you still need to go to a trade school, pay for training, or get certified for a number of trades (I don’t know about you, but I like knowing my electrician isn’t going to zap us all to kingdom come). All of that costs money, albeit less than traditional higher education. And it’s not easy.
For another, life is not all sunshine and roses for those who forego a college education in favor of a career in the trades. Financially speaking, a lot of those hard-working people are falling further behind their college-educated peers.
And for the record, I have never heard this condescending anti-advice from anyone who actually works a blue collar job.
“Maybe instead of majoring in women’s studies with a minor in origami you should’ve studied engineering!”
I studied publishing in college. I now work in the publishing industry. My degree led directly to a career path. But again: when I chose my degree and career path, I was young enough that I had no concept of the value of a starting salary under $30k. I made my bed and I have to lie in it, sure. But I can’t be accused of choosing a useless major.
And I certainly wasn’t familiar with the idea of calculating return on investment. If I had, I would’ve found out that it would take me nearly five years before my annual salary matched my annual tuition.
But maybe this kind of dismissive, sexist, myopic comment should best be directed at the high school guidance counselors, parents, career counselors, and professional advice-givers who tell inexperienced teenagers “It doesn’t matter what you study in college, so long as you get a degree.”
I know several million English majors who might want a word with those folks.
What can we do?
Back to our superhero origin story.
We Bitches made mistakes and learned the hard way. If it wasn’t for comparing notes with Kitty, I’m not sure I would’ve succeeded in paying off my student loans when I did.
We don’t want you, our readers, to suffer because of student loan debt. This blog is not simply a repository for our favorite dog gifs and dick jokes about money. We are writing about money shit for you.
Ironically, the only way to save young people from the crippling effects of overwhelming educational loans is… education.
We need to educate people about their options and financial responsibilities before they apply to college. We need to make sure they understand the realities of the job market, salary potential, and compounding interest so they can make informed decisions about colleges and majors.
Consider this a direct refutation of everyone who has ever criticized our juvenile tone! We’re trying to reach the young’uns! References to Sailor Moon and Disney Princesses are the only way we can convince them to read about ROI! Suffer the little children to come unto we!
It’s not all doom and gloom, of course (despite what our frequent detractors might say of our general Eeyoreism). Kitty and I are both examples of Millennials who busted their asses to pay off student debt in record time. So it can be done. Paying off debt is, after all, a pretty simple process.
But just because something isn’t complicated doesn’t mean it isn’t hard.
So let’s hear your student loan stories. Successes, failures—we want it all! We even want it from our Gen X and Baby Boomer readers. Tell us of the halcyon days of yore in which a college degree was both rare and affordable!
And by all means, if you know of any Blacke Magyck for paying off student loan debts faster, share with the whole coven!