2 Decades, 2 Degrees, and 6 Figures Deep in Student Loan Debt

…and why that debt is so #WorthIt

Like millions of freshmen before me, I took out student loans to attend college. It didn’t seem like a big deal at the time, especially since my plans were to get a double major in chemistry and mechanical engineering.

I was going to make bank, right? At least, that’s what the high-flying 90’s taught me.

However, also like millions of freshmen before me, my plans didn’t exactly work out. My grades tanked, I dropped out, and I spent years taking on interest before finally graduating.

And then I got married, had a kid, and went to grad school.

Here is my student loan story.

Undergrad — The First Time

My student loan story begins over two decades ago, in the fall of 1999.

That was a wonderful time in my life, as I was just starting my freshman year at Butler University.

I was listening to Live at Luther College by Dave Matthews and Tim Reynolds while setting up my new dorm room, a tangible sense of excitement and newness in the air.

The poster sale on the mall saw me purchase a trifecta of posters for my dorm room.

The obligatory Einstein poster (a must for all science majors).
The oh-so-clever periodic table of “mixology” (I was a chemistry major).
The movie poster for The Matrix (still the only movie I’ve ever seen multiple times in a theater).

My classes were lined up, scholarships and grants covered most of my tuition, and confidence was at an all-time high. What could go wrong?

Well, a lot could go wrong.

In fact, a lot did go wrong.

Suffice it to say, three and a half years and many poor choices later, I decided to drop out of school. My grades were horrible, I barely qualified as a junior, and all my scholarships were pulled.

All told, I took out $23,575 in subsidized student loans during my time at Butler. And right then, I had no degree, no job, and no place to live.

Shit.

So, the inevitable happened; I moved back in with my mom.

Like all boomerang children have experienced to some degree or another, the shame was palpable, almost to the point of overbearing. Sure, my mom was cool about me moving back in, but that didn’t lessen the guilt I had for, what I thought, wasting my one shot at college.

As for my student loans, well, I was up to my eyeballs in deferments and forbearances. You see, I had made the glorious decision to leave college right after a recession, with over 2 million jobs lost during 2001 and 2002.

I can’t remember the payments (nor do I have the history), but I probably made only one out of every three monthly payments over the course of the next three years.

Total Borrowed: $23,575

Total Owed: $23,575

Undergrad — The Second Time

After three more years of working shitty jobs, I decided to go back to school part-time. This time I attended a state school, Indiana University-Purdue University-Indianapolis (IUPUI, and yes, it’s a real place) and majored in mechanical engineering.

Part of my financial preparation for going back to school involved consolidating my old loans. So in April 2005, I took the five small loans I had and rolled them into one large one of $20,870.

It was then that I realized I had only paid off $2,705 in 2.5 years.

That sucked.

While my tuition was free at state schools due to being a child of a disabled veteran, I took out more loans to repay my mom for the Parent PLUS loans she took out while I was at Butler.

Repaying those PLUS loans with my own loans added a cool $16,000, giving me a total of $39,575 in student loans.

(Side note: I am more than aware that I could have gone to IUPUI in the first place without tuition rather than Butler. That was a dumb decision that was made by my 18-year-old self who existed literally a lifetime ago.)

I worked for the first two years as a 3rd shift lab technician at a chemical plant testing copper supplements in feed stock for cows. (Yeah, that’s what 70+ credits towards a chemistry major gets you.)

My plan was to work full-time and go to school part-time for 6 years.

However, in the summer of 2007, I was offered a part-time job on campus with Housing and Residence Life that paid me with free housing and a $2,000/semester stipend.

That job meant that I could finish school in two years’ less time.

Pretty sweet deal, if you ask me.

I took out a total of $27,344 in loans to assist with living expenses over the next two years (I still had to eat and pay for car insurance) but figured that debt would be more than offset by the sweet engineering salary I would get upon graduation, right?

Wrong!

By the time I finally graduated in May 2009, the Great Recession was in full swing. When I consolidated all of my undergraduate loans in 2011, my student debt looked like this.

Total Borrowed: $66,919

Total Owed: $87,275

The Great Recession, Grad School, and PSLF

As the class of 2020 recently discovered, graduating into the middle of a recession completely sucks. Not only is your immediate future in doubt, your career earnings will also take a dive.

In 2009, the job market was horrible.

And that shiny new engineering degree? Well, that got me three part-time jobs for the next seven months, none of which were remotely related to engineering.

I got jobs teaching SAT preparation at KAPLAN, assisting the Residence Life program I had just left, and as a secretary at another university office.

A full time job didn’t come until mid-2010, a full year after graduating.

But that’s not the whole story.

Like so many others, I decided to go back to school when the opportunity costs were low (read: I wasn’t passing up a super-high salary due to the abysmal economy).

In this case, I went for my MBA starting in January 2012.

The good news: I tested out of some classes and avoided paying that tuition.
The bad news: I got married and had a daughter in the previous three years, so I needed to take out loans to help with the cost of living. I added an additional $40,660 to my student loan principal.

In the middle of my MBA program, I found a job with the State of Indiana that was a slight reduction in salary but qualified me for the PSLF program. Given my ballooning student loan balance and horrific post-recession job growth, I decided PSLF was my best option.

Total Borrowed: $107,579

Total Owed: $136,251

The Future

After a couple of job changes and a big promotion, all in government, I am just over the halfway mark with 63 payments into the required 120 for student loan forgiveness. Also, I haven’t been paying my student loans since March 2020 due to the CARES Act and subsequent extensions.

No, I don’t earn as much as I could in the private sector, but that’s by design. One way of thinking about PSLF is to add 1/10th of your forgiveness to each year’s salary.

That means I am getting an additional $13,500 post-tax, or almost $17,000 pre-tax (assuming a 20% tax rate) each year on top of my salary.

So where do I go from here?

Work like hell to keep my current job. That will be a little tough, since government revenues will be down across the board, and that’s what funds my salary. Plus, each month I keep my job adds another payment to PSLF.
Keep working on my side hustle. I’ve had a modicum of success writing on Medium, but I need to treat it as an actual source of income and not treat it as merely a hobby.
Update my resume and keep my contacts fresh. Up to 85% of all jobs are filled by networking, and I can’t let personal connections slide, especially in a social distancing world.

(I actually had a new, much better job lined up in early 2020, but the HR process dragged on until a hiring freeze started due to the pandemic.)

The Takeaway

I don’t mind my six-figure student loan balance.

In fact, I kind of like it.

Student loans gave me the ability to attend college when I otherwise would not have been able to afford it.

Yes, I made several mistakes along the way that increased the overall cost of my education, but my lifetime earnings will ultimately overcome that additional cost, and then some.

Using the PSLF program is the key to my overall laissez-faire attitude, as well. Once I reach the 120 payments, I will have paid about half of the original $107,000 borrowed.

Not a bad deal.

My plan is to keep my student loan payments as small as possible while working towards the 120 payments (using the REPAYE plan), then celebrate when the loans are forgiven in December 2025.