The Nightmare Of Student Loans

How they can all but wreck your life


Have you ever been sitting down watching TV or reading a book, and a fly starts buzzing around you and won't go away?

That's what student loans feel like. Only instead of a fly, it's more like a 50-pound pit bull that bites you on the leg and doesn't let go for years. In a way, these are the worst types of debt because you can't sell them to get rid of them, like a house or a car. Once you've gone on a date with Sallie Mae, you'll get stuck with a check that usually takes years to pay off.

A good example is a recent New York Times story that follows Michael Wallerstein, who graduated from the Thomas Jefferson School of Law in San Diego. The job market for lawyers isn't too hot right now, and he's surviving with on-and-off jobs as a legal temp. In the meantime, he has $250,000 in student loans, collectors calling at all hours, and no real money-making prospects on the horizon.

"It could be worse," he says. "It's not like they can put me in jail." Indeed.

We're not saying that you should give up your dream career. It's great if you want to be a lawyer, doctor, pastor or some other field that requires a lot of education. It's awesome if you want to run a small business. What you need to do is make that dream fit within your parameters. If you can't afford what you want to do, either find a creative way to make it happen, or put it off until a time when you can.

Another reason you should avoid huge student loan debt is that there is no guarantee of employment or huge income once you graduate. You might spend $60,000 getting some sort of specialized degree, but if you are unable to land a job right away and have to wait tables, you'll end up with no money and angry collectors calling you. Along with several years of payments that will cripple your ability to build wealth or have a life.

Don't pay too much or go into debt to get an education, start a small business, or find your calling. You can have it. Just have it the right way.

Reader Comments (8)

A "rule of thumb" on other financial sites is that SL debt should be no more than 1 years salary of your perspective career. Me? I pay cash and don't have to worry about it.
Member at 11:01 AM, January 18 2011
I also went to lawschool after years of undergrad. If I were to pay my student loans off on their schedule I will RETIRE before they are paid off. With DR we will have mine and hubby's MBA done in next 4 years.
Member at 3:19 PM, January 18 2011
I wish I had heard of DR before I went to school. I too would be retired before completely paying them off if I followed their schedule. If my paycheck went completely to my student loans and nothing else and I mean nothing would still take me over 4yrs to pay them off! It's the last of my debt. And it feels like it will never go asway.
Member at 4:33 PM, January 18 2011
I agreed with Dave in Principle. In practice there is no easy way around them. Here was my dilema. I found out I got into dental school in May of 2010. I was making 50k at the time with 25K in savings. I spent 12k to get married and kept 13k for living expenses. We were gifted 3k for 16k total. My wife works so we can cash flow many of the bills. The trouble is that every semester we have 10k in educational expenses x 7 semesters = 70k. It would have taken me 3-5 more years working at 50k to save up the extra for all living expenses. Hopefully I will make at least 80k after graduation as a Dental Therapist. 3 years at 80k vs 50k is 90k. It didn't make sense to stay in a job that I hated for that long to avoid student loans. Only time will tell, but there is truly no easy way around this one.
Member at 7:50 PM, January 18 2011
So true, wish he had been around years ago...Finally starting to see light at the end of the tunnel on these loans.
Member at 1:36 PM, January 19 2011
Agree with everyone. I have 54K for both undergrad and graduate degrees. Would really like to go back and get a doctorate however a) do I really need one? Debatable. b) I am either going to pay cash, obtain grants/scholarships but I AM NO LONGER willing to incur any additional student loan debt. Good Luck out there.---Michelle.
Member at 7:58 AM, January 22 2011
I have $66K in Student Loans from Law school and I don't even practice law. If I knew then what I know now (post DR and economic situation) I NEVER would have gotten this JD. I have paid, and am still paying, for these DUMB debts!!! (12 years and counting!) I will make sure my kids don't make the SL mistake I made!!! Great way to graduate from school-already in DEBT!!
Member at 11:23 AM, January 22 2011
We are killing our student loans right now (about half way through $65k). One thing I know, my children will NEVER take out a SL! I'll work with them to save, work and find scholarships to make it work without going into debt.
Member at 2:19 PM, January 23 2011