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.

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Frugal URbanite May 11, 2009 at 8:48 am

How did he even get someone to give him that much? Mr struggled to get the $15,000 a year he needed (and had to work to make up the rest) and he came from a family with nothing.

We’re stilling living like grad students (we even have a roommate from Mr’s job), but if it means getting rid of the extra debt, we’re happy to do it.

Frugal URbanite’s last blog post: But is it really frugal?

mrsmicah May 11, 2009 at 9:19 am

@Frugal Urbanite That’s a very good question. Micah took out an average of $12,000/year between undergrad, Master’s, & PhD. He didn’t have problems at that level, but he also never tried to get more so I don’t know what he’d have run into.

Maybe the student loan companies (the guy notes that these were private loans) knew he couldn’t declare bankruptcy and figured he’d be good for it, even if it took the rest of his life.

Writer Dad May 11, 2009 at 10:41 am

Man, my wife worked three jobs to pay for college herself. It was Ramen every night. What better way is there to learn hard work and frugality? People like that dude are just setting themselves up for a hard appointment with the pavement.

Writer Dad’s last blog post: And the winners are…

RC@Thinkyourwaytowealth May 11, 2009 at 10:24 pm

Sounds like Micah really did things the right way. I took out about 20-25k, and although most of it went directly to school related costs- I probably could have gotten by on a little less- –wish I had though about it more carefully back then.

RC@Thinkyourwaytowealth’s last blog post: A Look at the $8000 First Time Home Buyer Tax Credit for 2009

Kristy @ Master Your Card May 12, 2009 at 1:28 am

Unfortunately, I did a lot of stupid stuff with student loans when I was younger. I’ll be paying for them later, though I’ve tried to curb a lot of that by making payments now as I work full-time. Though I didn’t get a nice place or buy a Mercedes, I did take out almost $20k so I could take six months off of working full-time. I was going to school during that time, but I didn’t do what my intentions were for that time off. I meant to double up on classes and really focus on my personal writing, but one thing lead to another and I never got around to it. I fully admit it’s probably one of my bigger mistakes financially. So, I feel this guy’s pain at his own stupidity (not that I’m calling him stupid, but I understand that he must be beating himself up a bit).

At any rate, if he’s willing to put in the effort, he can come back from this. It’s not going to be easy and he’s really going to have to forgo some luxuries, but he can do it. As far as Micah is concerned, he sounds like a very responsible individual which is always a good one to marry. I know having the debt sucks, but I wouldn’t let it stress you out so much. Micah seems to have a plan for taking care of things. Good luck to you guys!

Kristy @ Master Your Card’s last blog post: Financial Maxims: In Your 40s

TStrump May 12, 2009 at 2:50 am

I REALLY wish I didn’t fully live off my student loans when I was a student.
Unfortunately, I didn’t always work full time each summer – WHAT was I thinking!
I graduated with over $20K in debt and it followed me like an albatross until I finally paid it off 6 years ago.
Live and learn, I guess.

TStrump’s last blog post: Is Going to the Movies Still Worth It?

Doctor S May 12, 2009 at 10:59 am

I financed 4 of my 5 years of college via private student loans. I took out about 2-4k extra every year to help w/ living expenses. In total I had 105k to pay back when I graduated in 2006. I lived at home, didn’t demand much extra from life, and finished my education. Looking back, I wish I had persued finding a part-time job more back then, b/c the 12k extra i borrowed was very uneccessary.

When I read the story about the fellow $265k in debt, I really found it hard to believe honestly that a lender would be allowed to give such a large amount to one since social security number? I am realyl having trouble trying to comprehend it.

We all do stupid things in college but that is taking it to the next level to be perfectly honest.

Doctor S’s last blog post: Sports and Business: Lebron James Meets Kermit The Frog

Charlotte_uk May 17, 2009 at 11:29 am

How on earth did he manage to borrow all that money? I had to beg for £4000 towards rent and even that came through 4 months late! In the end, spending the day at school and weekends and evenings/nights in part time work STILL wasn’t enough to cover the bills on my tiny flat and the lack of sleep made me seriously ill. I don’t have rich parents to fall back on and in the end I was forced to leave after a year to start working full time. Four years later I have managed to pay back the £4k student loan and the £3k I had to borrow for tuition fees/food/bills, but now I am too old to get a proper loan if I did go back and all my money these days goes towards the current rent and bills. I’ve missed the boat I guess! Good luck to the rich kids out there – not that you need it!

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