The principles of money

Earlier this month, I received my first student loan bill since the ending of the student loan relief pause. I have not been obligated to pay back my student loans since 2020.  I only have about $10,000 left.  If the student loan relief bill would have passed, I would have had 99.95% of my loan forgiven.  It was worth a shot for me, unfortunately it did not work in my favor.  If I would have kept paying the usual payments, I would have paid my loan off in 2022.  Once the Supreme Court struck down the bill, I resumed my normal payments.  

Big Problems

When I went to make my first official payment, I realize that my payment amount and due date were incorrect.  My payment is typically around $275, my total amount due was $14.83.  Thinking that it could be because I made a previous payment the month prior, I thought nothing of it.  It wasn’t until I began researching statistics for this article that I realized the amount due was an error and it was bigger than me.  Over 400,000 borrower payments were wrongfully miscalculated.  Onboarding borrowers back into repayment has been a disaster.  Many lenders sold loans to other agencies.  The loan amounts are incorrect and customer service representatives are unprepared and overwhelmed with contact volumes.  I sent a message to my student loan provider asking them to review my account.

How I Got Here

I graduated from undergraduate school with no student loans thanks to my dad footing the bill.  In our Psychology program, it was impressed on us that graduate school was a necessity. I took the next year to work and save up enough money to move for school.  In Fall 2007, I returned to school for a master’s degree.  I didn’t have enough money to pay for tuition and support my life, so I decided to get student loans. I was determined to finish my program as quickly as possible to avoid paying more than I needed to.  Two years later, I graduated and entered the workforce in the “Great Financial Recession” with $23,000 in student loans.

Income Based Repayment Plan (IBR)

I was applying to higher paid positions while most companies were laying off or had hiring freezes. Jobs could see 100 applicants for one position.  Having a hard time making ends meet, I decided to defer my loans until I could find a better paying job.  The interest was still accruing on those loans I couldn’t afford to pay.  After watching the loans balloon, I entered the IBR program.  The IBR plan based my loan payment off my discretionary income.  The payments went from $275 to $26.  I was happy to repay my loans back regularly.

Combined Income and Covid

I got married in 2010, during the annual recertification, the Department of Education looked at both of our incomes to decide how much my payments were going to be moving forward.  I no longer qualified for a reduction and had to start remaking my payments in full.  With two incomes the monthly payments were manageable.  I was making monthly payments until the Pandemic paused all activity on student loans.  After 10 years of paying my loans and the accrued interest for two years of non-payment, I saw the end in sight.  When Biden announced he was cancelling $10,000 of student loans I was happy because that was all I had left.  After the Supreme Court nixed the relief bill, I plan to pay off my loans within 12 months.  

Is Higher Education Worth It?

In my experience, I received a lot of value out of my undergraduate degree.  My first job post-undergraduate required a bachelor’s degree for the entry position.  That experience, helped me level up in my career.  The relationships and network I developed in undergraduate school were life altering.  My graduate school experience hasn’t had the same return on investment. My goal was to leverage my master’s degree for a better job.  The jobs that I wanted in management and development, graduate degrees were preferred.  Unfortunately, I graduated at a time where it was an employer’s market.  Jobs were few and companies didn’t have to pay top dollar for top talent.  I regret getting my master’s degree because it didn’t pay for itself.  

My Advice

Always count the cost.  If your career path (i.e. doctor, engineer) requires that you have specialized education, go for it.  If you look around your field and most people are degree-less and experience matters more, you need to think twice.  Companies are willing to pay for people who are good at their job.  Higher education doesn’t make you the smartest person in the room.  Preference is given to those who can do the job most efficient.  You don’t need a degree for that.

Was your degree worth the cost?