Reality of Excessive Student Loan Debt
A lot of students, not all students, graduate college with student loan debt, and I knew my wife took out a lot of loans to pay for her school. Since she is done with college, those student loans are going to require regular payments starting in July. When I started my career it was nice to have a decent income, until I realized I had to pay all my own bills with it leaving not so much money. I started making payments on my student loans in December of 2005 and have made some progress from their original principle balances since. Now we have to consider my wife’s student loans.
Rather than sugar coat it and give the run around, I’ll use numbers because it is a lot. Check out this table:
| Her’s | Mine | ||
| Lender #1 | $61,179.00 | $13,519.35 | |
| Lender #2 | $45,860.00 | $7,004.75 | |
| Totals: | $107,039.00 | $20,524.10 | $127,563.10 |
From what I calculated out, her monthly payment will be around $700 and mine is only $175 so it wasn’t a huge impact. I want to get my credit cards paid off so I can focus the roughly $300 I pay on them per month to help destroy my student loans with larger payments.
I realize that there is no way she will quickly (less than 30 years) pay off these loans on her income alone. The big issue I have is she needs to at least cover her minimum payment and contribute to our household income to pay those normal bills the mortgage and utilities. Teachers do not make a whole lot of money either, so the road is going to take some time. It’s going to take additional income and bigger payments to get rid of these loans.
Student loans cannot be bankrupt no matter what happens, the principle must be paid. Sometimes lenders can reduce the fees and interest on them, but the original principle must be satisfied. Credit cards have to get paid off too while we’re at it because those balances are lower and the APR is higher. It feels like we have two houses, one in debt and the one we live in.
I never thought I would hear of anyone that owes as much student loans as I do. However in addition to student loans I have a mortgage for roughly the same amount. My student loans (as a teacher) are a burden that I can not even think about. I am on a single income so I would need two full time jobs to make decent payments on my loans. My parents are hoping that if I stay in my new home long enough, when I sell it I can use the money to pay (something) towards my student loans. My student loans are still in deferment and forbearance and to be honest… I wish they would just stay that way for ever….. I need a plan….
Sidebar- if your wife has federal loans, if she teaches for 3 years in a high needs area or subject (they may include all teachers now, I think) she can receive a reduction in her student loans by $15,000.
Over a hundred grand in student loan debt! What would she have done if you guys weren’t married?! What were you, her knight in shining armor? Her gravy train?
Tell her to take care of that Coach bag and wallet as they will be vintage by the time she can afford to have you buy her another one!
If you let her loans pay off in 30 years, it will be financially and emotionally devastating to both of you. Theoretically, you should be able to pay off her loans much more quickly if you devote her income to debt repayment. Can you get her to sit down and show her the different pay-off scenarios?
Curious…why don’t you include her student debt in your net worth?
I figured this post would get some scrutiny. Even though my student loans are much smaller, I never expected her end to be five times that. Those won’t be on the 30 year plan because that would end up being $250k, almost 2/3 in interest alone over and above the principle at the end of 30 years, no thanks.
She’s a teacher without a permanent position yet. We contemplated moving closer to the city of Chicago, and depending on which area she could do a program to help reduce her student loan debt. I believe it is something like a 5 year commitment though. Not sure what would happen with selling our house and changing the situation around. Brands like Coach and such are an image she likes to present. She is watching way too much “Real Housewives of Orange County” on Bravo lately because she is jealous of their frivolous and carefree lifestyle.
chitown - I don’t consider her debt in my net worth. At some point I may set up a chart with both of our stuff. There is nothing that is in both of our names right now. I’m a sole mortgage holder, have my own student loans, credit cards, car, etc. I brought this issue up because it is something that will have an impact on me as we are married.
Wow. What is the interest being charged on that 100K?
That’s really quite a phenominal amount of debt for a job that isn’t going to pay out all that much. This woman is going to ruin your life. You’ll be paying off your debts while she runs up hers and continues to spend. She won’t even attempt to pay such an amount down with any priority simply because it’s so an insurmountable! As you say it would take 30 years, so why bother? Might aswell buy another purse, earrings, whatever. The only way you’ll stop the interest drain on your household earnings is to pay it off yourself- which makes divorce look like a very attractive financial decision lol.
First of all congratulations for saving something for retirement at your young age. It’s very inspiring, nevermind being able to buy a very nice house. Also- no car debt is great, makes me think you’ll have the car problem handled for awhile which is good.
Yes, it’s important to get your wife on board but you need to be doing the right thing also and from the retirement savings and no car debt, I can tell you’re trying. In the end though the only person you can control is yourself. Take the lead for your family and maybe your wife will see that and be inspired too. Tracking what I spent is one of the best things I ever did. It really makes you think about purchases. Maybe you could do that and post the results online? Maybe we could help you figure out how to cut corners and still ultimately get what you want. Keep your chin up and try not to get discouraged.
So to sum up you have…
-An income around or less than 50k,
-a wife with no job
-$13,000 in credit card debt (plus your wife’s new dept store card?),
-$175,000 in mortgage debt
-$130,000 in student loan debt
-and an emergency fund of $50 bucks
In 30 years, including interest, you will have paid about a million bucks.
Jim,
My husband and I have about $100K in student loan debt. It’s something we, too, will be dealing with for a long time. The issue here isn’t her income - it’s her attitude towards your debt and finances. Your posts show a lot of frustration about your differences in attitude.
Of course there are two sides to every story, but you seem to be on two completely different pages. I think until you have the same point of view, your progress is going to be stunted. It’s not going to be easy, but we’re here for you.
JvW
Comments are mixed on this one which I expected. When we started college it wasn’t like the intention was go 100k in student loan debt. If the average college graduate earns 1M more in their lifetime, I think the difference will be made up in the 900k.
A lot of this does have to do with attitude. Ignoring it doesn’t make it go away, but dwelling on how bad it is doesn’t either. It is what it is and we must do something about it. Credit card debt has to go first before we can seriously tackle the student loans. For now we’ll just be making the standard payment on them. Buying nice things does slow down this progress, so that kind of stuff needs to stop. I’m not so worried about paying off the house right now as that comes much later.
$107,039.00!!!!!!!!! to be a teacher?!?!??? that’s how much you spend on medical or law school! wow.
My wife is also a teacher, her student loan was $21,000 going to a local university (one of top 5 in Texas). She’s a teacher with one of the highest paying districts in our area in she makes around 45,000 (10 weeks of vacation a year!). You will probably make more in your area, of course the cost of living is also probably higher.
You need to think of creative ways to tackle this debt asap, I would suggess to the wife to start working, keep living like you’ve been living and put all her salary for 2 years towards the student loan (no more coach purses either!) sacrifice for 2 years! and this debt will be gone.
No kidding, over $50,000 to become a teacher??? What a ripoff education! What kind of school did she go to? Or did she switch majors like 5 times? Anyway, I would know about student loans, I spent about $180,000 to become a lawyer (so far a big waste). Briefly on the career topic, I should have become an electrician like I was going to, then I would have no debt right now, a house and probably $50k saved (and that was just 7 years ago when I switched). Dude, you gotta get your wife’s spending and attitude under control (sorry radical feminists). I have been married almost a year now, and my wife would be WAY in the hole if I didn’t explain to her that she can’t just spend more than she makes. I also have to remind her that her job and her income are important to our survival, so she has to work for now. From your stories, it seems clear that your wife doesn’t care, and you have to make her care, or your finances and your marriage will fall apart. BTW, my brother said that teachers in Alaska are now making like $75k…
Maybe I should clarify the breakdown of things. My student loan debt covers half of my college years of expenses (2 years). The 100k or so that my wife has, roughly 45k went to her regular college degree. The remainder was for her masters program, and graduate programs cost three times more than undergrad. Believe me it would have been better (cheaper) if she picked education during her undergrad. It does bother me that there is so much student loan debt that falls on her. Job outlook in this area for teachers is between 45-55k a year but she has a masters which could be an issue since they have to pay her more. There is so much preliminary stuff she has to do before schools will let her in the door. TB test, background check, physical exam, and a lot of paperwork to fill out for each district she applies. I hope she gets on some call lists as a sub so we will have her income to work with once again. Right now we’re running thin and only basics like food, gas for the cars, and bills. She is cooking a lot more now which I love because I can’t (I just heat things) and not eating out really lowers our average monthly expenses.
The home cooking is a big plus–in one month, it could easily make up for the Coach bag. But you guys have got to have a monthly budget meeting (building in a splurge fund for both of you), and then stick to what you agreed to for that month. Could you find some sort of financial counselor to sit you both down and explain what the different scenarios are (dog food casserole in your 70s vs. cruises and European vacations)? Also, would it help if you chose some sort of short-term system of rewards for debt pay-offs (an extra $100 to splurge with once $1,000 is paid off, or maybe a fun weekend)?
Your situation sounds very stressful. Have you considered making an appointment with a reputable non-profit credit counseling agency? Perhaps your wife would take the situation more seriously if the information came from an objective professional rather than from you. Unfortunately, your debt repayment plan doesn’t stand much chance of succeeding unless your wife gets on board.
It sounds like your wife is taking this a bit more seriously than she’s letting on. Having that student loan debt can be sobering. Perhaps it is time to sit down for a heart to heart while her mind is open?
Jim, please make sure you explain the student loan situation in full. You were lucky enough to have a settlement from an accident that paid your entire first year of college. Then, in your remaining three years you only had to pay room and board because you received financial aid for tuition. I on the other hand did not qualify for any financial aid. In addition, I chose a private school for graduate school due to a limitation from my undergraduate GPA and the fact that I could get done faster at this school.
Thanks for jumping in and commenting. (But could you come up with a name of your own?) I look forward to your becoming an active participant on the blog and sharing your point of view.
I started with just under 6,000 in student loans. Twelve years later, I am just now seeing the beginning of the end. That was at about $65 a month. We now have a total of just over 11k in debt (8K car, 1400 student loan, 1400 old credit card), and I’ve been serious about getting out of debt for the past 3.5 months and we’ve been living on less than we make ever since. With me at home and two kids, it’s a very slow, painful process even with an excellent income. Paying $475 a month on debt, we’ll be out in just under two years. As one woman to another, I encourage you to be really aggressive about your debt right now, since once you have a family, it will be that much harder to keep down the cost of living or earn extra money. Plus, having a baby can easily turn into a big multiyear shopping extravaganza (I just recently broke my Baby GAP/Landsend habit), so it’s worthwhile to get things under control now. Good luck!
Keep on shoveling?
WOW! I would recommend that your wife get two jobs! Seriously, she should consider tutoring or coaching or some extra activity outside of teaching to help pay off her student loan debt and your home mortgages.
I can relate to your situation 110%. I went out of state for college (bad idea paying out of state tuition) and finished a double major and decided to go straight to grad school for my Masters. I am now 96K in student loan debt, just got married and our combined income was 85K for 2007. I’m paying $1,100.00 per month in student loan debt. I have my payoff on a 8 year note. Can you work with your bank to get her loan payoff over a 10 yr period vs. 15 or 20 yrs. I looked at paying it off over 20 yrs and it only reduced my payment by $300 per month but added another 50K in interest. We want to buy a house this year, but with my student loan debt it’s just not possible to have a house and put enough into 401K and savings.
It’s incredible how much school costs compared to what you make when you’re done with college. I can’t believe I have so much student loan debt and so little to show for it at 25 years old.
Good Luck and feel free to email me if you need anymore insight. PS. Did my dad warned my husband about my student loan debt when he asked for my hand in marriage
Now my husband jokes that he should have taken the “word of caution” a little more seriously! haha