Paying off more than a hundred thousand dollars in student loans concentrates the mind . . . on student loans. Obviously, my focus right now is on paying off the dang thing. However, one does wonder (especially when throwing 100% of every paycheck at loans): why am I so deeply in debt? Why is law school so expensive? How did this happen? What are other people doing to tackle this problem? How did it happen that I’m paying off so much in student loans that it’s cutting into my chocolate consumption?*
Like every other law school graduate, my immediate reaction to any pending crisis is DO RESEARCH. I thought I’d share with you some of the most interesting results. We’ll start with a podcast because, if you’re like me, at the end of most days the thought of reading anything else after a full day of reading many many many things is horrifying.
This podcast is recorded by the Brookings Institute, a think tank in Washington, D.C., and is an interview with someone there who researches student loans. Her point is that a lot of people think of student loans as a crisis but really student loans are an investment. People who take out student loans, overall, are better off than those who don’t because of the positive impact of education on their salaries. Her data shows that (a) not that many people have huge student loans; and (b) for those that do, it’s usually a good investment. Listening to this interview reassured me that student loan debt is probably not going to sink the economy . . . although it may sink the Good Ship DebtFreeJD.
And with that last point, we get to the part of the interview that is concerning. This researcher made the point that even if student loan debt may not be a national crisis, for some people it is a personal crisis. These are the people that took out a lot in student loans, and then struggled to find a job that paid enough to pay off those loans. According to this researcher, only 7% of young households held over $50,000 in debt in 2010. She thinks this is a reason the country shouldn’t panic about student loan debt. That still seems like a lot of people who are facing a huge challenge to pay back their loans.
All jokes aside, Mr. DebtFreeJD and I are awfully lucky – we may owe a lot, but we’ve got a pretty good joint income — and even more importantly, each other — to take on this problem on. What is truly inspiring is those people who are facing the same amount of debt with much less . . . and still tackling it!
*I do not expect others to recognize the last question as the immense personal catastrophe that I do.