Another example of the impact of student debt (Fortune) [$64k debt, $166k/year income in upstate NY]

Seems like a better example of student loan debt problems would be someone who:

  • Grew up in a low income family in rural Pennsylvania, too far to commute to any college.
  • Graduated college with (typical for Pennsylvania, where in-state public financial aid is not very good) $39k student loan debt.
  • Majored in biology because high school counselors talked up STEM job opportunities.
  • Now earns $45k per year working as a lab tech, though at least the benefits are good.

But maybe such people do not complain as much to journalists, because their situation is not as bad off as their parents’ situation. Going from heavily struggling to merely struggling is upward mobility, although not what people tend to envision opportunity should be.

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Just another pro-student debt relief article from Fortune. That tabloid publishes one of these per week, always leaving out pertinent details that don’t support their narrative. It would be informative to know the county in “upstate NY” and of course the debt they carry on their home. There are plenty of counties in “upstate NY” where $166K, even with $64k student loan debt, you can live quite comfortably and have it all.

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Or is it because they wanted to be medical doctors?

The husband’s parents probably didn’t tell him not to major in something that seven years later will only pay $40k. I wonder if the majority of the loans this family has to repay is the result of this. If husband major was in accounting, nursing, engineering or CS the wife would not have to shoulder most of the financial burden of this family.

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Maybe they told him that STEM → well paying job, and he majored in biology


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In 1999 my husband and I had two small children, an income of 60k a year (we both felt it was important I stay at home while the kids were small), 45k in student loans, and we purchased our first home. We had very little disposable income, but we made it work. I’m not seeing how the math is that different? We bought a bigger house over time, had two more kids, we both got graduate degrees, paid off our student loans, put our kids through college without loans, and saved for retirement too. Having college educations gave us the upward mobility to be able to create the life we have now and we couldn’t have gone to college without student loans, so, it is what it is. Are student loans good? No. But, if that’s the only way one can pursue their chosen career path, then it’s a necessary evil. What happens if they cancel student loan debt? Apart from the financial catastrophe it creates for the federal budget, what about the kids starting school now? Is it a one time giveaway? Or is college just going to be free moving forward? How?

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The article doesn’t really create the same level of outrage in me that it seems to have created with others, but I think the couples dilemma boils down to not wanting children enough to make the cost worth it to them at least at the moment. If they really want children, I see lots of options that could help them towards their goal.

  1. Waiting a few more years. She is only 29.
  2. Planning to have the husband be a stay-at-home dad or at least a part-time stay at home dad for the child’s infancy and toddlerhood so that day care costs are considerably lower. Day care usually gets cheaper around preschool age.
  3. If the wife is working from home, they could probably get by with only one car not two (assuming they have two now).
  4. Put less away for retirement and/or liquid savings during the daycare years
  5. Looking at other lifestyle changes that will make their overall cost of living go down such that living on 166k feels more doable for them.

I really think kids are doable on that salary if parenting is a priority, but there is nothing wrong with deciding that you’d rather not have kids given how expensive they are. And that is a fine choice too. But to say that it would be impossible seems silly to me. Also, while it is ideal to have paid off one’s student loans before embarking on parenthood, it is not necessary. Unless people have very high salaries, it is never an optimal time to afford children. The question is more whether they can come up with a budget that will make their financing doable as parents (as opposed to the finances being optimal).

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There are many jobs which are vital to our society that often don’t pay well, even after seven or more years. For examples, social workers, preschool/daycare teachers, public school teachers in some states, some allied health fields, many state and federal jobs. I’m happy that there are people who choose these careers, in spite of lower pay. No one should think they have to earn >$100,000 a year to be a success or to have children. I never made over $55,000 a year and raised 7 children (3 by birth during my married years, 4 adopted as a single mom). I received no child support (mentally ill ex-husband) or subsidies. It’s all a matter of priorities.

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I’m not outraged.

But I am amused that “non-consumptive uses” of one’s earnings (whether for saving or paying off loans) isn’t calculated in the same way that “consumptive uses” tend to be.

I know folks IRL who can obsessively research where to have dinner (must have 50 recent positive yelp reviews) but don’t bother to read the fine print on a loan (or actually take seriously their credit counseling meeting before taking a student loan). It’s important to shop around for the best price on a new phone or a phone plan, but they can’t be bothered to understand the various options for paying off a loan?

So sure, you can’t afford kids. There’s also a lot of stuff in your life you probably can’t afford either- you just don’t know it and are buying it anyway.

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Perhaps the reason Gen Z aren’t prepared to push themselves working 50+ hours per week is because they know that employers have no loyalty to them and the mantra of work hard and you’ll get ahead is no longer assured.

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All of this is very true, and delayed retirements in the leadership team combined with fewer opportunities for growth in the economy explain it.

That is still no explanation for why a couple can’t pay off 64k of debt on an income of $166k in a few years. They should have been paying more than $400/month on the debt during the pandemic. They can correct their mistake now that higher payments will be required soon, but they have missed out on the opportunity to pay the loans off aggressively while all of their payments went to the principal. Their problems sound more like a lack of focus than an opportunity problem.

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And they should pay down the student loans!

I wasn’t suggesting that it was. I was simply responding to twoin18’s assertion that “it does seem that many in Gen Z have a reluctance to work hard” because they were unwilling to work 50+ hours in the office and because they value work/life balance.

If you read my post near the top of the thread I agreed that they should have plenty of income to pay off their debts.

That math also doesn’t work for me. There are many many families with that income who are paying off a $25,000 car in three years while also paying mortgage.

I’m all for student loan forgiveness, but this is not a case for which it’s justified.

BTW, We didn’t have an student loans, but we were able to “afford” a kid on far less than what they are making after they would have paid off their student loans. Either they don’t actually want kids, which is OK, but don’t blame student loans, or they want to “raise” kids, but only if they can afford 24 hour childcare, 365 days a year, from birth to college.

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Dang! How much was the wedding?

What the heck do they do with all of their money?

Stop the Grubhub, Netflix, HBO, new or Electric vehicles, online orders, wine clubs, and everything else that generates excessive bills.
Pay off the loans by adding extra payments to the principal if it’s allowed.

Dang! We all did this and most of us were tight for money when we had kids.
Sorry to be so crass but she’s 29 and she’s physically running out of time, so they will plunk down more money for fertility treatments as she continues to age that biological clock.

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Maybe the husband is a teacher and working hard but doesn’t have time for a second job. Or maybe a musician or artist still trying to establish himself. Really, just last year she was making $60k and he was making $40k, so not that far apart in earnings. Her career took off, and maybe his will too. It sounds like they were living somewhere else but were able to move to upstate NY, to a cheaper COL area, so maybe he had to give a a better paying job (even a waiter in NYC makes more than one upstate) to follow his wife.

It also doesn’t say that the student loans are their only debt. Maybe they also have car loans or other debt.

The government is not handing everyone $20k if student loans are cancelled. The money is already out there, the debt will just not be collected. The former students don’t get the money and can’t decide to do something else with it like buy a car or take a vacation. Some of the student debt was never going to be collected anyway (default or forgiven under another program). Only a portion of the total debt out there is repaid each year.

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The net effect is the same. If someone borrows money without paying it back, they are enriched by that amount.

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Disagree. If someone is not paying the Govt say, $300/mo., they can go purchase a car for $300/mo. Or, save a few months worth of $300 and take a vacation.

Cash is fungible. Cancelling debt repayment is inflationary.

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If the person doesn’t have the $300, they can’t spend it again. It is more likely these borrowers will spend the $300 on food and electricity and not a vacation. In fact, it is more likely the person will only have $100 and will have to refinance by signing up for a deferment program or default on some/all of the debt. The Dept of Ed is not getting the $300 payment.

My daughter only has $20k to repay, and her payments were $240 before the pause. That a big payment on minimum wage. You say why doesn’t she just get a second job? She has one. She drives a 2001 Honda that won’t last much longer, she shares a house with 5 people so can’t possibly live any cheaper. She’ll have to start paying for health insurance when she graduates. She doesn’t want to refinance to extend the loans out any farther than 10 years (she’d only made a few payments before the pause). She couldn’t save the money over the 3 year covid period as she did lose her job and wasn’t there long enough to qualify for unemployment and then went back to school. I don’t think her situation is unusual to have graduated into the pandemic and still not have a job that pays much more than fast food wages (she works at Starbucks for one of her jobs).

This story of making $166k/yr is not the typical person who is having some debt forgiven. If the husband is only making $41k and half of that student debt is his, if he weren’t married and having to pay the debt on his own (minimum wage as someone pointed out) it is likely he wouldn’t be paying enough to service the debt so the total just keeps growing. Sure, it MAY be dismissed after 20 years when it has doubled or tripled, and the whole time the debt shows on the person’s credit report, but it is a risk that the borrower takes that the loans will ever be dismissed. Look at the history of the IBR programs and total forgiveness (it’s not good).

Come September, there are going to be a lot of people who cannot pay their loans.

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Respectfully, if she has a degree and is making minimum wage, that is her choice.
Most people take jobs for the salary to pay their bills. She may not like such jobs, but she likely could get one and service her debt.