Sometimes the fact that Micah has steep student loan debt terrifies me. Sometimes it stresses me. Sometimes I wish he’d taken a more financially successful track. But I’m not angry with him about them–mostly because he’s not this guy.
It’s not just the $265,000 in loans for an undergraduate degree that make me glad I’m not married to him, it’s the reason he got those loans and how he used them. Only $56,000 went to student loans. With the rest, he rented a fancy place, bought a Mercedes Benz ML500, and generally lived a lifestyle that he could in no way afford.
Now, to be fair, it sounds like the writer is starting to realize the magnitude of his situation. He’s got a long road ahead of him.
One of the reasons I was comfortable marrying Micah despite his student loan debt is that I know how he lived while going through grad school.
Housing – While getting his Master’s, he lived with his parents and helped them out with groceries, babysitting, and giving siblings rides. While getting his PhD before we got married, he lived in a tiny 1-bedroom apartment which he split with someone else from the department. His half was around $350/month ($700/month is a very low price in DC, unfortuantely).
Food – It helps that he’s not a picky eater. He probably should have worked more on nutrition, but he ate simply and rarely ate out.
Car – Until about a year before we got married, Micah drove, well, grad student cars. They were normally used and didn’t cost very much. When his car died about a year before we got married, he decided to buy a lightly-used car instead with the plan of making it one that would last us for a while.
His biggest unnecessary expenditure was probably the gas he used visiting me periodically, as we lived 2 hours apart.
And Micah didn’t live entirely off of loans, he worked full time during summers and part-time during the school year, but because he didn’t have a full-time job, he took out loans to cover the part of his tuition and fees not covered by his scholarships and to cover the rest of his living expenses.
He kept in mind what most students do–that loans are there for you to get by, not for you to live well.
It’s almost impossible to declare bankruptcy on a student loan. Given how some people use them, maybe it was wise for student loan companies to lobby for special protections. Otherwise one could live like a king in college, declare bankruptcy, and have it disappear off one’s credit score by age 29.
Unfortunately, if it weren’t for the people who do use their student loans to live like kings, people who should be able to declare bankruptcy could get their loans forgiven as well.
So if you’re using student loans to cover part or all of your living expenses in college, keep in mind that the loans will be with you until you pay them off. Even if you should be able to get a good job straight out of college, the economy may tank again, you may suffer an injury that’s not bad enough for you to get out of paying but cuts your earning potential, anything could happen. The person in the Free Money Finance article was making progress on his loans until being hit by a drunk driver cut him short.
There’s no shame in living like a student if you’re a student. Besides, once you graduate and get a job you’ll enjoy the money you earn more if you don’t have to put a big chunk of it to paying off your college fun.