Nearly $110,000. I’m only 22 years old and that’s how much student debt I’ve racked up. I could have bought a three-bedroom house back home in Latrobe, Penn. for that price.
No, I’m not a law or medical student, I’m a graduate student at the Columbia Journalism School. I have two degrees, a double bachelor’s in communication and in sociology from Saint Vincent College, in Latrobe, Penn., and in a week I’ll be graduating with my master’s.
“Seventy-one percent of college seniors graduate with debt.”
– The Institute for College Access and Success
I’m not alone. Student debt is a real problem for the millennial generation. Seventy-one percent of college seniors graduate with debt, according to The Institute for College Access and Success. That’s at least 40 million college grads nationwide. Their average load is nearly $30,000. That’s roughly what I had in student loans a year ago, before I started graduate school. In New York State, however, student debt is below the national average with 60 percent of its college seniors graduating with outstanding loans. The average student debt load in New York is also lower than the national average by roughly $4,000, according to the Institute for College Access and Success.
It’s a crisis that is crushing the middle class. When college graduates flood a job market that is over saturated, it’s no surprise that even with a college degree it’s not as easy as it once was to find a steady job. Because of this, graduates are having a harder time buying houses, saving for retirement, and starting families compared to previous generations, according to the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, and the Treasury department.
As millennial borrowers struggle, the government is “reaping profits” from their student loans, according to the latest Government Accountability Office report. The report estimated the government would make $66 billion off of student loans issued between 2007-2012 with high interest rates locked in.
In 2013, both parties decided the interest rates on federal student loans were too high at 6.8 percent and lowered them for new borrowers this year. Nothing was done to help existing borrowers. Last week, Democratic Senator Elizabeth Warren from Massachusetts introduced a bill to help students stuck with high interest loans.
If the bill were passed, it would allow all student loan borrowers to refinance their federal loans down to the low rate (3.86 percent) that was offered to new borrowers this school year. It also would allow borrowers in good standing to refinance their high-interest private loans into the federal program. This would have a huge impact on student borrowers like myself.
The majority of my student loans are private. I borrowed nearly $60,000 from Discover Loans over the past five years, with an interest rate of nine percent. Having the ability to refinance those loans down to 3.86 percent (for my undergraduate loans), and 5.4 percent (for my graduate loans) would alleviate a chunk of my $110,000 financial burden. And in six months that large burden will turn into a $1,300 monthly burden. That’s more than I pay in rent right now near Central Park North.
No, I don’t have a job yet. And, yes, I’m trying to stay in New York.
Right now, I have a part time job at a radio station that pays my rent, and I’m working a minimum wage retail job on the weekends to pay for my MetroCard. I used the money left over from my loans toward groceries from Trader Joe’s and four dollar weekend Rolling Rocks. When I need a haircut, I put my trust in the students at the Carsten Institute to chop my locks for 20 bucks. But that emergency fund ran out last month. Right now, I’m living paycheck to paycheck. And as far as full time employment goes, I haven’t had much luck in finding anything that will pay the rent and pay back my school loans.
According to my Federal Student Aid Exit Counseling, I’ll need to make at least $55,000 a year to afford the cost of living in New York and my monthly loan payment. The chances of that happening to me? Slim. According to Career One Stop, the median salary for a reporter in New York is $53,000.
Luckily, federal student loans have two different income based payment options that lower your monthly bill – and after 25 years, what you don’t pay back is forgiven.
If you’re in a situation like me and don’t know how you’ll be able to pay back your student debt, visit the Student Debt section on the Consumer Financial Protection Bureau’s website. The interactive guide will help you determine what options are best for you.
Personally, I’m hoping I’ll be able to find a well-paid full time job and that I’ll be able to cut down my monthly loan payment with an income-based repayment plan. But if not, it looks like I’ll have to pick up a third job as a waitress or bartender to keep the bill collectors from knocking on my door.
