Reader Story (and Question): Financial Health vs. Mental Health?
Published on - June 5th, 2011 (by J.D. Roth) This guest post from “NotPollyanna” is part of the “reader stories” feature at Get Rich Slowly. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. This week’s submission is a reader story and a reader question rolled into one.
Hi. My name is Not Pollyanna. (Okay, that’s not my real name, but that’s what I call myself at Get Rich Slowly.) I’m 26 years old, three years out of college, and have $79,000 of student loan debt left to pay off. I’m working on it, but I have to tell you: It feels insurmountable.
How I got here
When it was time to make decisions about college, I was severely mentally ill with depression, anxiety, and anorexia. School helped me cope, and I didn’t think I could survive outside of it. No one suggested I take money into consideration when choosing a school beyond my mom suggesting I apply for scholarships, which I really wasn’t able to do. My parents went to a few school meetings about planning for and paying for college and came away with a plan to take all private loans so the loans are all together rather than a mishmash of private and federal. (Note: This is a very bad idea.)
I chose a college two states away. I applied, enrolled, and paid with a private student loan. In the three years I attended that school, I was sent home three times because of hospitalizations for my mental illness, but I remained a full-time student by taking correspondence courses. I attended a community college for a year, and I finished with two years at a third college.
I originally borrowed $86,000 to pay for my education. When I graduated in 2008 with a B.S. in Humanities, my debt total was $106,000. I know now that borrowing so much was very ill-advised, but that wasn’t something I was able to contemplate at the time.
Clawing My Way Out
Three months after graduation, I got a job as a library assistant, paying $25,000/year, where I still work. I live with my parents and spend my money primarily on health care and student loan debt. I keep $2,000 in my savings account and a $2,000 buffer in my checking account as an emergency fund. At the end of each month, I update my money spreadsheet and I put any extra money (income – spending = extra) toward my student loan, prioritizing my highest interest rate loans, snowball-style. My minimum payments on my student loans originally totaled $860/month, but are now $680/month.
I don’t do much of a budget beyond “spend as little as possible”. With the exception of a $5,000 gift from my parents toward my student loan debt, this how I spent my money in 2010:
- 24% healthcare
- 58% on my student loans, (40% on minimum, 18% on extra)
- 18% on everything else: transportation, clothing, phone, my cat, etc.
A chart of NotPollyanna’s spending.
What Next?
Moving out of my parent’s house is my top financial goal. (Some abusive family situations that contributed to my mental illness have not completely ended.) The flexibility I have in my budget isn’t enough for me to pay rent in this area. In response to my extra payment on my loans, my lender reduces the minimum payment amounts. This gives me more flexibility in my budget over time, which gives me more money I would have available for rent payments. In addition to moving out and paying down debt, my third major financial goal is to get the education to become a library conservator, which requires a master’s degree and a training and/or certification in conservation.
I need to stay in my current major-metropolitan area to see my doctors. I spent several years in abusive mental health care, so now that I have a treatment team that is helping me, I don’t want to leave until I am mostly “done”. I have been focusing my money-making energy in finding a new, more lucrative job, since I suspect a new job will be the biggest boon to my financial situation. I do intend to make and sell handbound books and works of embroidery, but have been waiting to throw myself into that or other part-time gigs in favor of my job search. (Is this foolish?)
Since graduating from college, I’ve been as financially responsible as I know how. Am I missing anything? I know that isn’t a very specific question, but I’ve been doing everything I can think of and I am still in a pretty bad situation. I’m really hoping someone out there knows of something that could make a big difference in my situation.
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First, I’d just like to say congratulations on graduating and all you’ve accomplished in spite of a lot of difficulties. And it’s great that you have a job and have already paid off a good chunk of your debt.
You’re doing a lot of things right already, but here’s a few ideas (don’t know what would work for you).
- healthcare – I don’t know if your income is low enough, but is there any state assistance at all? Would it help if you didn’t live with your parents? (if they look at their income).
- moving out – can you rent a room with someone? Or perhaps a situation where you assist an elderly or disabled person in exchange for room and board. I’d look for extreme low-cost options there. Even if the area of the city is a bit sketchy, it might be worth it.
- job/money – is there any extra money you can make through your current job? Overtime or extra shifts at other libraries? If it’s through the city, like libraries here are, make sure to look at other city jobs. Could you do any other casual type jobs – delivering newspapers or pet-sitting or babysitting? I agree it’s good to keep looking for a higher paying job, but getting a bit of quick cash would be good.
- I wouldn’t go back to school until you are debt free. Just because there’s no guarantee of a better job with higher education. You might be able to get a better job without it. Are there really jobs in the library field? It seems it might be a dying industry.
- Are you sick of hospitals? If not, maybe you could combine your own experiences with the library stuff and work in medical libraries/research or medical record keeping. Not sure if this is much of an option, but it’s an idea.
Whatever you decide, best of luck. Would love to get an update on your story in a few months.
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I was wondering if you have brought up the family issues with your family; so that perhaps they can be stopped – because really what you’re doing is exactly what I would do in your shoes. Are these minor issues that you can continue to try to ignore? Or medium sized issues that maybe you could all go to a counselor to work out? Do your parents realize what they’re doing?
I also agree with the #1 commenter about looking into state health care. I’m not sure if they also take debt-to-income ratio into account.
Good luck!
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Really Elizabeth? She’s been hospitalized for her issues, battled anorexia and depression, had to quit school, has a team of mental health professionals, her parents continue with the abuse and you’re asking if she’s mentioned it? What planet do you come from? It’s pretty clear that she’s mentioned her issues to her parents.
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TBH, I’m disappointed that six GRS readers apparently ‘Like’ your comment. Snide remarks do not add in a positive way to the discussion.
“Really Elizabeth….What planet do you come from?”
Too bad there’s not a ‘Dislike’ button.
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I don’t mean has she mentioned her issues at all, but I mean has she sat down and tried to talk to her parents about them. In many cases of abuse, the abuser is not confronted by the abused.
I know that my mother has verbally abused me since I was in my early teens, and we have never sat down and actually talked productively about it. I have issues still to deal with and so does my mother, but we are not currently at the point in our relationship where I feel ready to say we need to tackle *our* issues.
Her mother could know that she battled anorexia and a million other mental illnesses, but she could genuinely not realize that she is part of the cause. Some people do not look at themselves and see what everyone else can see clearly about them.
So sorry that on “my planet” I have not gotten to the place where I think that everyone tells their abuser that they are the ones causing the mental illness.
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In family therapy sessions, therapists have confronted my parents. I have written them letters to name specific things they did (like a day later, not years later), tell them it hurt me, and ask them to change. In the moment, they promise to do better, but they never actually *do* anything to change. After one family session, when we left my mom told me that she was not going to do the things she just told the therapist she would do. I’ve tried working with them, but since that has always made things worse, I try to disengage with them as much as possible, in order to avoid as much hurt as possible.
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Agreed — my father is abusive and my mother is codependent. I can’t tell you how many things my mother has said that she later claims she never said, things that happened that she claims happened a completely different way, etc. As they say, “Denial ain’t just a river in Egypt!”
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Hi NotPolyanna,
Thank you for sharing your story so openly. I know it must not be easy. From what I can tell, it sounds like you’re doing the best you can and applying the principles of prioritization toward your spending, saving & debt payments.
In my opinion, your health is most important, and continuing to receive the care you need as well as to plan for moving into your own living space, is incredibly important. This is paving the way for you living your life as best you can the rest of your life.
You’re already working toward gaining the flexibility in your budget to work toward living where you want. One thing if you haven’t done it already is to make sure you have a complete picture of the costs of living on your own so that you can plan for that. Some of the costs to consider:
-Rent (ongoing)
-Expenses of having your own household (basics such as dishes/furniture/household goods/laundry/cleaning supplies/food)
-renter’s insurance
-moving expenses (one-time)
-potential changes to transportation needs depending on where you move to.
I applaud you for thinking through how to conduct your life in a financially responsible manner and for working to get yourself healthy!
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First, let me say WOW! Paying off that much debt with what you are making in such a short amount of time is AMAZING! That takes dicipline, and you have what it takes to be successful in life and in money. And you are off to a great start!
Getting out of your parents house is important. Further down this thread Heather said something that I totally agree with – roomates. Renting a room or finding someone who needs a roomate would be a good option. Of course, it must be a safe situation so ask friends, co-workers or people at church if they know of anyone with a room for rent. Ask people you trust. Newspaper ads are ok, but a recommend from a trusted source is much better.
Lauren has a good point. Don’t forget to consider all the extra expenses with living outside your parents’ place, including utilities. If you are thinking about moving in someplace, one of the questions to ask is do they want you to pay part of the month-to-month expenses (utilities, phone, cable/satillite) and how much – how much does the power bill normally run?
About getting additional schooling, right now might not be the best time for that. Additional schooling = more debt, and that is counter-productive to your goals right now. Find something else to pour yourself into. If you just need something to put your time into, the needlepoint is fine – it is not too expensive and it is marketable.
If you want professional development, well, you live in a metropolis – network! Go out and meet other people doing your job at different locations. Look for someone who is enthused about the work. What professional organizations do they belong to? (Some offer free continuing ed.) What events do they know about that are related to your field? Help plan and organize the event, or volunteer to work the event. This stuff won’t get you college credit but you will be developing a network of contacts, and you need a network to find opportunities for advancement. Plus, you will be engaged in professional development and adding to your resume, and you might make a new friend.
Whatever you decide to do, you’ve got it going on and you’ll do great. You’ve done awesome so far, just keep it up.
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I don’t have any great suggestions, but I want to congratulate you on all the progress you have made towards both financial and mental health. You have paid off a large sum of money on a small income. I hope you secure a better paying job soon.
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I don’t have much advice for you, just sympathy. Do look into whether or not you would benefit from itemizing your taxes since your health care costs are such a large portion of your income, if you’re not already. Good luck! And keep moving forward. That debt doesn’t have to be paid off overnight.
For people who are helping college students with mental health issues (as a former RA at a very stressful school): Many colleges and universities will refund tuition or partial tuition for students who need to take a medical leave of absence, if said leave is taken before a specific point in the semester. In addition to the school mental health resources, ask mental health practitioners if they offer a sliding scale based on income. If you’re in a university town, look into places where mental health students are being trained– just like with dentistry or hair, you can get certain types of therapy (CBT, for example) at a lower cost as part of a therapist’s training.
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I want you to know, YOU ARE NOT ALONE!
I have about $30,000 in student loan debt, BUT I’m also making car payments and living on my own, so paying rent and all living expenses. Plus, my income right now is $24,000 a year.
I don’t know what advice I have for you because I am still struggling. However, reading Dave Ramsey’s “Total Money Makeover” has helped my outlook SO much.
I am aggressively getting out of debt right now. I do this buy budgeting EVERY.SINGLE.PENNY. I’ve also started shopping at low-cost grocery stores like Aldi, which has cut my grocery budget exponentially. I’ve also cut out anything unnecessary expenses (gym memberships, shopping, etc). I’m slowly but surely getting there!
Good luck to you!
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Dear NP — do you realize how well you are handling your situation?! The student loan situation is awful. It makes me so angry that colleges let students take on so much debt, but you are dealing with it better than I would. Do what you need to do to take care of yourself and keep going! As a MLIS myself, let me encourage you to consider the digital aspects of preservation / conservation. There’s a good market for that and the $$$ is much better.
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I see both sides to the issue of student loan debt. I certainly sympathize with all the former students who are in over their head and barely making it. But what would you have the loan offices do? You can certainly imagine how students would react if a loan officer said, “No, I’m sorry I will not allow you to borrow this, even though you are legally able to.” That would not go over well. And how is the loan officer to gauge who gets loans and who doesn’t? This is not to criticize this person, but a person who majored in engineering would have been able to pay off this amount of debt. Should only those in the sciences or business get large amounts of loans? And when you enter university, you often have no idea what you want to do with your life. I guess I’m just playing the devil’s advocate and expressing that I don’t think you can place the blame squarely on the shoulders of the universities. I’m not sure what other choice they have.
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Most people who work in financial aid offices don’t have time to visit with students, just time to process paperwork. I’m not sure you can blame the lenders as they are doing what is expected in their job. The education has to come before students get to the bank or the financial aid offices. We need to find a way to educate our high school students and their parents on how to consider cost more with a college choice. Starting at a community college or even an in-state public university can save individuals $1,000s.
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I think some students would react badly to not getting a loan they couldn’t afford, but some might be saved. I know when I went to college I had grown up very poor and truly had no concept of how much money a $30k loan was. I figured when I got a high paying job I’d be able to pay it off no problem! I might have considered the state college I was able to get a full ride for instead of someone (parents, loan officer, anyone?) had taken 10 minutes to explain it to me. No, I am not blaming anyone, just saying, some 18 year olds are totally clueless!
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I would have them say this: it is inadvisable to take out a student loan that is greater than your first year (post-education) salary expectation. Simple, easy to understand and quick.
The bank wouldn’t loan me $90,000 to buy a car, why are they loaning poetry majors that much money? Or social work majors? Or undecided majors? It is irresponsible lending and they should not be doing it. However, it is very, very difficult to discharge a student loan in bankruptcy (even private loans, unless that’s changed recently) so the banks have no incentive to say no.
It is the job of the financial aid office to assist students in finding a way to pay for college. However, I also believe that the universities and colleges have an obligation to steer students away from undue hardship – it is inadvisable to take out a student loan that is greater than your first year (post-education) salary expectation. The ultimate decision is up to the student, but at least then the school has given advice in good faith.
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I still think that that’s a dangerous proposition, limiting yourself to what you expect to make first year post college. At best, that’s just speculation.
I read a WSJ article about a doctor who started out with $250K in loans and the balance swelled to $500K, she simply deferred the loans for years. Now this is an extreme case but some people just don’t deal well with mountains of debt. Some doctors pay $2K/month in malpractice insurance alone. Also, if this doctor lived on her own and in a high cost of living area-her fixed expenses may have been significant. I have talked about this with one of my doctors; she said the loans did not feel like real money.
Ideally, high school counselors should do their due diligence and financial aid offices should be more involved. However, we do not live in an ideal world. Financial aid offices usually just look over a student’s FAFSA report and generate a financial aid award, loans are included in that package. High school counselors typically don’t have a personal finance background and yet they’re advising students about a decision that has the potential to be the largest expenditure of their lives, save a house.
If someone is the first in their family to go to college the situation could be even more dire.
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Hi Jaime B, I take your point…BUT…
Should the assistance ONLY be going to those who might make tons of money? Like doctors, lawyers, business majors? While on the surface that seems like a wise financial choice, what about teachers? Don’t some people need to become those? And don’t they deserve help in achieving that goal…(one which certainly benefits society)?
So, do you propose only limiting the amount of the loan to what they will make post grad? I mean, is that on an annual basis? Because $24,000 x 4 is $96,000 a year to my math. Or less than that? $10,000 a year? How much schooling can you buy for that? And wouldn’t the student have to work to make up the difference? Are we proposing letting med students get a loan to cover full costs to avoid having to work their way through, and teachers or social workers getting lesser loans and having to work? I guess I don’t see that as particularly even-handed. In fact, I see that as setting up a class-system based on income, which I think we have enough of in this country as it is.
My solution is to do what most of Europe does and underwrite the cost of college for those who demonstrate (through grades and talent) a desire to excel in college. Help them out. And bring back trade schools so we can have plumbers, electricians and others as well. Part of the big, big problem is everyon is ‘forced’ to go to college if they want a decent living, even if they don’t come from a wealthy family.
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Giving people a guideline like “try to avoid borrowing more than your first year salary” is in no way trying to discourage people from lower incomes from getting an education or limiting college to financial elites. People can say other things, but encouraging students and their parents to take a hard look at the finances is only common sense. If your student can go to a state college and graduate with $20,000 in loans or go to a private college and graduate with $100,000 in loans – especially for low paying degrees like social work – then I think they need to really, truly evaluate whether they’re really and truly getting more value at the $100k school. For most people and most careers, you don’t need the cachet of an Ivy League school to do very well in life.
And I agree DreamChaser57, I think this is something that should be brought up in High School. Having this conversation after you’ve already chosen your school is a little late, but I still think that when a finaid person is sitting across from a family and knows the student will probably be saddled with astronomical debt to pursue a low-paying career I think they have a due diligence to at least once, even in a soft voice, make sure this is what the student and/or family wants to do.
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I feel the cost of education in the U.S. is disproportionate to the value. In many other countries education is not only free, but much higher quality. I think all of society benefits because you don’t have people deciding to get one degree over another so they can fund their education. People can follow their true passions. Librarians, Social Workers and Teachers aren’t financially punished by their education cost/earning potential ratio.
As for NP, I think she’s doing amazingly well given her situation and I wish her luck, healthy, happiness and evenutally … financial independence.
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In terms of making more money, have you ever thought about freelance indexing? If you are an organized person who reads quickly, you can take an online course (only about $350) and learn how to index books. I know there are a lot of librarians who do this on the side. I think it can be pretty lucrative. If you are good, you can make a minimum of $25. Some indexers claim they make $50 or even $100 an hour. Indexers charge by the page, but you have to be a self-starter and market yourself to find clients and publishers. But it would be good money for you. Anyway, have J.D. give you my e-mail if you want to hear more. I’ve explored the option for myself as well.
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I think academic editing is more lucrative and less mind-numbing. It might also be more flexible. Several companies will hire people with BAs only (i.e., you don’t necessarily have to have a masters or PhD). I’d look into this. (I edit on the side and make $40-60/h, though I have an advanced degree and work with a company that requires them. I get to set my own hours and pick up assignments when I want them. It’s a wonderful financial buffer.)
As suggested above, you might be able to make a lot more money by free-lancing. Many non-native English speakers want their stuff looked over.
Btw, I also suffered from similar mental health problems right after college–moving out of home is essential. Do it as soon as possible; consider roommates, if you can find people you like and trust. You’re right to prioritize health and health care. Money comes second. Good luck.
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If you feel comfortable enough or inclined to share, what company do you do editing for?
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As someone with a masters degree in an academic research institution that doesn’t pay particularly well, I too would be interested in knowing more about academic editing – I’ve certainly done it for my share of colleagues at work, but how did you get started?
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I edit for American Journal Experts. One company that I see hiring all the time is Cactus Communications–not sure they require an advanced degree. And again, one would almost certainly make more freelancing, but that requires a long ramp-up period and marketing.
With AJE, you start at a much lower rate and edit slow turn-around papers. As your skills improve and you get access to faster turn-around papers in more fields, you can get promoted to a senior position. As a senior editor, you edit papers that have already been edited once, so each assignment is much easier. The rate I quoted is what I make in that position. (You can also make more money as a reviewer for AJE if you’re published and actively involved in research OR as a translator.) If I were trying to do this full-time, it might be difficult to sustain that hourly rate, but it’s fine for a few hours a week. (If you’re really interested, ask JD for my email address–we can split the referrer bonus if you’re in one of the fields AJE is aggressively recruiting in or if you’re applying as a translator in Chinese, Portuguese, Arabic, Korean, Turkish, or Japanese. The most sought-after fields are Agriculture, Chemistry, Computer Science, Dentistry, Earth/Environmental Science, Ecology, Economics, Engineering, Management, Materials Science, Math, and Plant Science.)
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I realized that asking people to email JD isn’t very nice of me (sorry, JD!). You can email me at ajereferral [at] gmail [dot] com. I’m happy to give anyone some tips on how to start out.
JD–I’d be happy to write a post on this topic, if you think your readers would enjoy it!
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Here are some tips for people interested in the field: It took me approximately six months after joining to get to where I am now. It’s better to start with very small assignments (<6000 words). Bite the bullet and spend time studying grammar and punctuation rules in the beginning. As I suggested to someone who emailed me, if you’re in an English-speaking country and want to freelance, try advertising very locally. The vast majority of papers I edit are by scientists in non-English-speaking countries, where professional editing is more common; I wonder if the local market might be relatively untapped. Good luck! I think this is a great job (and might be awesome for NotPollyanna) because of its flexibility and decent pay.
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Anonymous fails to mention that you have to have graduated from one of the top universities in the country to edit for American Journal Experts. I have friends who do it, and they say it is good money but pretty boring. Just my anecdotal thoughts……
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I realize this is a slightly older post, but I just wanted to put out there that I had also edited for AJE, and I found it to be a pretty raw deal. Eventually, if you stick it out long enough, you can be making $40-$60 an hour, but before that, you had better get used to putting in quite a bit of work that works out to roughly minimum wage. It’s not uncommon to get articles that are such a mess that a short “1-hour” assignment balloons into 8. Suddenly the $30-$40 you get for editing it looks painfully inadequate. Given that you have to have an advanced degree from a top university, the starting pay rates are especially ridiculous. I did 1-2 articles a week for about 6 months, then realized that I was still routinely getting doozy articles that took hours, and dropped it. Now I do tutoring as a side job and I find it a MUCH better deal financially.
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I would also like to know how you get into academic editing. I’ve been looking for a way to practice my writing skills and pick up some side income.
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JD – the readers demand an article on How To Break Into The Academic Editing Field!
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Personally I think indexing a book in the humanities sounds way more interesting than editing the grammar of a scientific journal article, but to each his or her own.
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I’d also be interested. I have two graduate degrees and I’ve done some academic editing, but only for people who know me. I’d love ideas
on getting more clients, and information on your company.
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Yes, another big congratulations for graduating and overcoming your difficulties to the extent you have. These are significant accomplishments, including paying down so much of your debt so quickly, on the small income.
The first comment (Kestra) above has several good suggestions.
On the most basic level it’s always a bad idea to “spend more than you earn” so you are right to avoid renting an appartment before you can afford it. That said, there may be ways around this, as suggested earlier, by taking on roommates, bartering, seeking assistance, etc.
Your health – mental, physical, whatever – is and always will be your greatest asset. I have witnessed very wealthy people blow entire fortunes on a glimmer of hope that they might regain just some of the health they previously enjoyed. If your current living arrangement is adversely affecting your mental health, then I would propose an improvement in this area alone will reflect well on your earning potential and, therefore, your financial health.
Also, it sounds like you look forward to this idea of making and selling handmade books. Yes! Find a way to do it as soon as possible! I will suggest however you enter it with the frame of mind that you’re not trying to make an extra income. When it generates extra cash and improves your finances, that’s great. The creative outlet however, and doing something you enjoy, AND making a little extra… that’s mental health just waiting to happen! Relax into it. After that comes the success, but it sounds like you’re already on your way there.
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Wow – this is why we need mental health screenings for 18-22 years old just like we STILL screen elementary students for scoliosis.
You sounds like you are on the right track and keep focusing on the one person you can change – yourself!
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well if we advocate that, then it’s pretty stupid to expect them to legally die for our country too.
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If only there were a ‘dislike’ button…
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just like “we STILL screen” for scoliosis? I am confused. why wouldn’t we? we wouldn’t not look out for chicken pox in kindergarteners?
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Incidentally, I am very very against the idea of regular mental health screenings in the current condition of mental health care. Because I have received such tremendously atrocious mental health care and know many others who have had similar experiences, I would sooner recommend a friend hide from mental health professionals than seek them out. Overdiagnosis is a huge problem. I’m all for people feeling better and using whatever tactic they like for doing so (it wouldn’t be my choice, but if you want to frivolously use anti-depressants, I won’t stop you). I don’t mean that people have to be severely ill before I would have them get help. However, given the current situation of mental health care, a lot of people get sucked into the mental health care system and stay sicker longer because of the “treatment” (which is often not helpful, and sometimes abusive). Our society mandates the prevention of hurt more readily than it mandates the increase of good and happy. I want to see fewer people hurt by mental health care before I would send people there for help.
Sorry. A bit of a hot-button issue for me.
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I was surprised someone even mentioned it. I read a lot of health information for my job, and mental illnesses are often misdiagnosed and misunderstood — especially in the young! It can take years to get the right diagnosis and treatment, so I don’t understand how routine screening is a good idea.
Besides, many illnesses like thyroid conditions, MS and autoimmune disorders are often misdiagnosed as depression or anxiety. Some symptoms can even be caused by food intolerances or allergies. Sometimes when you’re labelled as having a “mental illness”, experts stop looking for other causes.
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Wow, you are really doing an impressive job of paying down debt and managing a really tough situation! The only (very small) critique I can think of is that, most likely, handmade items are not the most time-effective way to earn money. Unfortunately handcrafted materials just aren’t valued as they should be, such that a lot of people are paying themselves minimum wage (or less) for their sold objects. If you are making things to relax and sell them on the side that is less of an issue, but if the goal is really to make a meaningful profit it could be worth double checking that your prices are both in line with the market and high enough to provide a reasonable wage.
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In this global economy, those two pillars are pretty much mutually exclusive for an American’s expectation of ‘reasonable wage’.
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Firstly, congratulations on your achievements. You’re going to be fine….
My advice to you – your number one priority should be removing yourself from home, where you have suffered, and continue to suffer, abuse which has made you mentally ill.
Please do not stay there any more. Worry about your money when your health is sorted.
And keep us posted on your progress.
Signed, family abuse survivor
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I 100% agree. You will never get better if you remain in your current living situation. How can you heal if you continue to allow the abuser to abuse you. Forget the student loans, move out the house and have a peace of mind. A person can’t create light if they dwell in darkness.
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Have you looked into the HUD Section 8 voucher program? It pays some or all of your rent for tenants who qualify due to financial hardship. It would definitely be worth looking in to. Query “HUD section 8 voucher” or go to the HUD web site to get more information.
Also – many, many kudos for your successes in healing yourself. As the daughter and wife of loved ones with severe mental illness, you’re doing the best thing possible to make your recovery the top priority. Getting to a place of stability and peace now will *save* you untold financial and personal expense in the future. Best wishes!
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I don’t have many suggestions, bc it sounds like you are already pretty on top of the options you have open to you, but I just wanted to congratulate you on taking a lot of extremely challenging circumstances and still finding ways to stay in charge of your life! Good luck, but as long as you keep approaching your life this thoughtfully, I’m sure you’ll keep doing well!
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Most of all- you are on a great track! Keep up the hard work. I am proud that you are doing all you are for your future!!!
I would:
Hang with your parents as long as you can stand it. They sound like they are taking up the food and roof side of your story allowing you to pay off a significant part of your debt. If confrontation is an issue- attempt to find a great place to hang out until they would have retired for the night.
The library is a great place.
Stay in your community. Moving away will take away your support system. That is the largest mistake many of us who struggle do— run away from the community that cares.
Start making those books on the side. Maybe you can bring the materials to work and then stay there after work to make them. Embroidery as well. I see many people at my library sitting and working with I pods plugged in.
Don’t work on a MLS until you have the money flow again. Schools are cutting libraries, putting more and more librarians on the market. After you have worked in your position for a few years- approach the head librarian and see if the library will help fund your MLS.
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Respectfully, I can’t agree with this advice. Using the word “abusive” to describe family indicates a serious problem, even if everything looks ok on the surface. Removing yourself from that situation should be your first priority. Many things that seem impossible now will be much easier to deal with once your head clears. I grew up with emotionally abusive parents – if I had stayed there, my life would have been over before it started. Leaving cost me a fortune in debts that I am still repaying, but it was the best decision I ever made. People describe debt as a kind of loss of freedom, but it is less expensive than living in an abusive situation.
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Agreed. People who suggest “sticking it out” or “growing a thicker skin” have not ever lived it and have no idea…
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Except she HAD moved out and now is living at home again. I have BTDT but I did not have mental health issues. I figured out a way to get around the situation until I had plenty of money to be healthy, and leave on my own. I gave those suggestions.
Let’s be real. She has a job that pays her less than $2000 a month. She really wants to live as an artist. She pays about $850 a month to student loans that SHE took to go to school. She pays about $500 a month for health care – because at 26 she is no longer qualified to use her parent’s care. That leaves her with a grand total of about $500 to live off of – food, shelter, transportation. She cannot declare bankruptcy. She can go on public assistance- but then she is a single woman and most states have cut out food stamps and mental health care from their budgets.
Sounds like the home is ‘safe enough” until she is strong enough to leave. Could she make a go of it without getting into a terrible situation on the outside-maybe- maybe not.
I think she is safer where they provide assistance and she knows what she is getting than moving out into a, very likely, abusive roommate (or marriage or boyfriend) situation.
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It sounds like you have really thought this through and are doing an amazing job. I just wanted to encourage you about the crafts that you mentioned (hand bound books and embroidery).
If you’re thinking of selling on Etsy or something similar I’d say go ahead and start sooner rather than later. Something like that tends to also snowball, so the first year or so may be verrry slow. Better to go ahead and get started now. I also have big loans (around $50k) and a small salary (around $35k) and live in an expensive area. My etsy shop is the one thing that’s allowed me to pay extra to loans and save a lot, but it took 2-3 years to grow to the point that it was a significant part of my income.
I work in the mental health field and I know what you mean, not everyone out there is competent and caring, and it can take a while to figure out who’s who. It sounds like you’ve already made a ton of progress and probably extricating yourself from that difficult family situation will be a huge final step.
If you do want to open an etsy shop and want advice, feel free to contact me through my blog. Good luck!
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In what field is your degree? Seems like with a BA you could find a higher paying job. I know times are tough right now but it doesn’t hurt to be on the lookout.
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I add my admiration to the other commenters. Many people with far fewer obstacles would not be coping as well with the stress of major debt.
Since I don’t know where you live, I’m not sure if this is an option. But have you investigated the Section 8 rental program in your area? It’s a government program that helps people with low incomes who live in areas with high housing costs.
If your income meets the limits for your area, you’d pay no more than 30% of your income to rent and the Section 8 program would pay the balance to your landlord.
Income limits vary by city and county. But you can find out if you’re eligible by calling your local housing authority.
A lot of people think this is the same as public housing but it’s not. The landlords are private owners (or nonprofits) who agree to accept this payment.
It’s certainly worth a call. Good luck to you!
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The only potential problem is that the Section 8 program in large metropolitan areas can have an incredibly long waiting list. Nevertheless, it’s still worth a try…
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I doubt she’d qualify for section 8, making $25k. And if she plans to make more in the near future, even more so. Most of my clients on section 8 make $600-800 per month (they’re disabled). And even they wait 5-15 years to get on. It’s more of a long term solution for people who are permanently disabled or unable to earn long-term (because of kids, etc), in my experience.
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I second the Section 8 suggestion. The program varies from city to city and you don’t know what is available in your area until you check. You can query “HUD Section 8 Voucher (insert county name here)” to get your local contact information or go to the HUD website.
Also – it may help to remind yourself that you’re doing absolutely the right thing to stick with your current treatment team. By making your recovery from illness your #1 priority you will *save* untold financial and life heartache in the future, and position yourself for maximum success in everything you do. Best of luck, our thoughts are with you.
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I also recommend looking into the Section 8 Vouchers. Medical costs are also considered in eligibility so $25K may not be too high. If you have to wait on a waiting list, getting your name on it now will make your name come up that much sooner. It is worth a little research, anyways.
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I agree with everybody who thinks NotPollyana has come a long way and is doing very well under the circumstances.
I wanted to add my vote to the people who think you should stay where you are at the moment. When you move out, you’re going to find that (at least temporarily), your debt repayment slows down to a crawl. Also, don’t go for an MLS until you are done paying for your undergraduate degree. As has been mentioned, government workers are going under the ax now, so it’s not a safe bet that you’d be able to get a good library job. However, have a look at your community college catalogue and see if you can pick up any inexpensive courses that will be useful to you for your career (computers, etc.).
I think your side business ideas could be very therapeutic, but don’t spend a lot of money going in, be willing to start very small, and don’t let it interfere with your day job. Incidentally, I think you should get in touch with Mrs. Micah at http://financefreelancelife.com/about/
She’s not blogging actively right now, but you guys have so much in common (the debt, the library and crafting).
Lastly, I’d suggest giving your parents an occasional break from you, and giving yourself an occasional break from your parents. You’ll manage to live with each other more happily if you don’t have to be together all the time.
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Hi NP. I can really empathize with you. I only had to read as far as ‘abusive family situation’ to know what you’re dealing with and why you are in the situation you are currently in.
FWIW I too have been in the same boat as you and it has been absolutely disastrous as far as my spending has been concerned. I am a recovering hoarder. Having said that, I want to impress upon you the importance of dealing with your mental issues up front, no holds barred. You must confront and deal with your issues because if you don’t, they will run and ruin your life. You seem to be doing that so keep on doing it! I’m not sure if my response here is of any help to you but, having dealt with mental issues all of my life that directly correspond to severe childhood abuse, I can tell you that NOT dealing with it is a huge mistake. Once you gain confidence in your ability to handle and/or head off a depression (which I know can be severely debilitating) you will be able to consider your ‘bigger picture’, as in what do you need to do to perhaps make more income to pay down that debt. Ask yourself, where do I want to be and what do I want to be doing in 1, 5, 10 years time? Yes, you do have a large debt to deal with but try not to let it be the rock that drags you down and keeps you under.
Don’t be too hard on yourself. You’re only 26 and you definitely still have options and time to create a life plan for yourself. Good luck
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As a therapist, I couldn’t help commenting to say how AMAZING it is that you finished school despite struggling with mental illness. Many people give up on education after a hospitalization, so your story is very inspiring and one I’d love to share with some of my clients. I can imagine how the weight of the student loans must contribute to your stress level, but you have made a ton of progress in paying it down in a short amount of time.
It sounds like you are in a good place right now as far as treatment goes – would your private loans be deferred if you entered a graduate program? That may give you some time to breathe a little, look for a place to live, and increase your earning power. Like a previous commenter, though, I worry that you might take on more debt without enough income to make up for it.
Any friends who might want to be roommates? That’s always a thought if you can’t afford rent on your own (and most people in big cities can’t).
Congratulations again on the work you’ve done so far – I think you are an awesome person! I know you’ll get tons of good information here.
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I respect your constructive approach to a difficult situation!
First: Concerning moving out, do you have skills like gardening or child care that you could barter for rent rather than paying cash? This has worked well in my household as we’ve at times had young, helpful housemates who were repaying student loans. See http://www.diamondcutlife.org/the-win-win-of-working-for-rent/
Second: Concerning your making handbound books and embroidery. These could possibly make some money, or possibly send you further into debt. I was a self-employed artist for more than a decade, and I suggest glancing at my (hard-won) lessons learned: http://www.diamondcutlife.org/top-ten-tips-for-entrepeneurs-part-i/
Finally: I wouldn’t assume you have to get a master’s degree anytime soon in order to have a good job. Unless you landed a good teaching or research assistantship (and even if you did) a master’s could just send you right back into heavy debt. I have a master’s degree, and my first job after earning it paid me $14,400/year (OK, that was back in 1989). My point, though, is to stabilize financially and find and do work you enjoy with the bachelor’s degree you’ve earned — prior to reentering the cycle of academia and debt.
Warm wishes. Your honest desire for good advice makes you unusual, and will help make you successful.
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You need to be on an income contingent student loan repayment plan, which will reduce your payments immensely. I did this with student loans while my son was a baby and its the only way we survived.
Check with your lender to see if they offer such a program. If not, see if you can consolidate your student loan ..see this link
http://loanconsolidation.ed.gov/
Then, you can get an rough idea of what it would do to your repayments.
http://www.direct.ed.gov/RepayCalc/dlentry2.html
Good luck!
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NP suggests that all of the loans private — IBR and consolidation probably aren’t available to her.
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Since the OP is living at home, assuming that situation is sustainable for a while longer, I don’t think there’s a problem with devoting such a huge portion of net income to debt repayment. Especially since her core needs are provided for, including shelter and food. Being aggressive now with debt will pay off huge later, with age comes additional responsibilities usually like a family.
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Definitely check into the Income Based Repayment, and note that if you pay for ten years straight and are employed in a non-profit or government job (I’m guessing you are, as a librarian) then they’ll be forgiven. If your loans are all private right now and you can’t do IBR, see if you could take out a government loan for a single class at a community college, and then consolidate your existing private ones with the government one to qualify for IBR.
Good luck!
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This is not necessarily true. She would need to do some serious homework. (I am a public school teacher and am not eligible to have *any* of my student loans forgiven, much less all of them.)
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Hi NotPollyanna,
Under the still relatively new IBR Program, sponsored by the US Government, I have calculated your new monthly student-loan payment would be approximately $85/month.
See:
http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRCalc.jsp
This would free up money for you to move out from your parents and pay rent! Good luck…
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The forgiveness and IBR only works for direct federal loans… I’m not sure if it would make sense to combine the recapitalized private loans with yet another loan (though federal) just to qualify!
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But she chooses that option, it will take much longer to pay off the loans. Might be better to get rid of them as soon as possible. IMO there has to be more she can do to make more money right now. Unfortunately stress exacerbates mental illnesses, so the choices might be tough.
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But paying nearly 60% of one’s current income on student loan payments is absurd. This is exactly the sort of situation the IBR program was created to help. NotPollyanna can make bigger payments further down the road when (1) she is making more money, and (2) the loan-load is actually worth less (due to inflation).
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Mike– She didn’t give the interest rates, but if they are private loans, chances are good the rates are higher than inflation.
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Unfortunately, IBR is for federal loans. I also believe that it may be difficult to consolidate her private loans into a loan that would qualify for IBR. It may be an option if she had old federal loans, but not private ones. Her parents made a huge huge mistake by recommending private rather than government loans to pay for her education. It is costing her more than $700 per month. If her parents are financially able, I would hope they continue to make these $5000 gifts to her to help pay off her loans. Seems like the least they can do after giving some of the absolute worst and most damaging financial guidance possible.
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Oh, don’t I wish! The $5000 gift was actually half the proceeds (my brother, with a similar debt load, got the other half) of an inheritance my father received. It was sort of a dead rich great-uncle he didn’t know he had, sort of situation. I wish it was more lucrative for me, but it was a lot of money considering he bequeathed half his assets to a church and the rest was divided between a lot of people (my dad has 6 siblings, and that is only a small branch of the tree). My parents haven’t handled money well on their own and I suspect they have very little in retirement.
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Two things came to mind:
- Are you itemizing your taxes? Look into writing off the student loan interest and also your medical expenses. The public library may offer free tax help if you need it (volunteers will go over your taxes with you).
- Regarding the handmade books and embroidery, I say go for it. Work on them in the evenings while watching TV or listening to music (crafts had the pleasant side effect of being very relaxing and meditative, particularly things like embroidery). You’ll build up your stash and a limited budget can really encourage you to be creative. Ask for supplies, or gift cards for supplies, for birthdays, Christmas and other occasions. (If these requests are ignored as part of the on-going issues you experience at home, sell the gifts/items you don’t want on eBay and use the proceeds for supplies.)
To further increase your earning potential, here are some ideas:
- Reading tutor.
- Custom hand bound books or embroidery. (Put the word out among friends and co-workers. Lightly market yourself among friends and co-works if that feels comfortable)
- Babysitter
- Data entry (often payroll companies will have regular temp gigs, like one week a month. Check with a temp agency)
- What can you sell? Used books, DVDs, CDs, clothing and accessories in good condition? (If you can’t sell them, donate and take the tax deduction if you can)
I commend you for sharing your story. You are a young woman of great courage, you will get through this.
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NP, fear not and have faith! You’re making good progress. Kudos to you for the attention you’re giving your financial life.
I would say work at the current job or get a better one, but forego a master’s degree for the time being. I concur wholeheartedly with the poster who suggested a break from the family occasionally. This would have helped my days living with my parents.
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Congrats on pushing through and getting your degree!
I have my MLS, and there’s still a good job market for librarians. There’s always a market for conservators, but a very small market as it’s a special field. I think the area with the most potential for the future relates to digitization and/or corporate libraries. I don’t know where you live, but here’s a sample of jobs just in the PNW: http://pnla.org/jobs/index.htm.
My main suggestion is to see if your current employer will pay for your master’s degree. A lot of businesses & libraries do, if it’s related to the field. My previous employer paid the entire tuition for my MLS! Also, there are a lot of scholarships in the library world. Go to the state and national library association websites to find them. If you can find scholarships or employer tuition reimbursement, I’d advise getting the degree right away. It will really increase your earning potential, and you will be able to pay off the school loans much faster.
Good luck!
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I would strongly advise against getting the MLIS degree at the moment, especially if you have to go into more debt for it. The market is so flooded with un(der)employed grads, that people with an MLIS are snapping up library assistant jobs. If you are able to do the degree part-time via correspondence (many reputable schools offer this option), without going into more debt, then go for it, as you don’t have much to lose. But that degree is no longer a ticket to a decently paying job. Quite the opposite. I graduated with the MLIS more than a year ago, and was one of the few people in my cohort to find a job, albeit a temporary contract. Most of my cohort is moving back home with their parents because there is no work. The MLIS is the new BA degree.
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Getting any job after graduating these days is a daunting proposition, library science included. After I graduated with my MLIS (after paying out of state tuition) I looked for a job for a year without finding a position. I finally went back to school to get a paralegal certificate and found a job in the legal field. My library & information science background is extremely helpful to me now in an alternate setting but I’ve also got hefty school loans to go along with it.
If you are determined to do it, wait until after you’ve paid your loans off for the first degree and have more experience as a library assistant. The library experience will be extremely helpful in getting future library positions and knowing you’ve paid off your existing debt will contribute greatly to your peace of mind.
Digital librarianship would be a smart way to go. Digital librarians are already central to academia as are jobs like virtual librarians who work with online learning.
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I would agree with this. At our library, we recently had over 50 good applicants for a librarian opening. We are a smaller library, not located in a big city, and yet there is still a flood of applicants looking for jobs, either because their jobs have been cut or they are just out of library school. The tales they tell in library school about the “greying of the profession” and how so many jobs will be opening up when all the current librarians retire are mostly just tales. I am actually currently getting my MLS, but I am on a scholarship that pays for almost all of it, and have been guaranteed a job by my current employer when I’m done with it. If it were not for that, I would not be doing it.
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I could say the same thing, only replace MLIS with “law degree”.
Finding an entry level job is difficult everywhere right now, because there are so many experienced people who through no fault of their own have lost their jobs in the last few years. Employers can be picky and require experience at entry level prices.
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The reality is that my generation is holding on to jobs they would have previously left several years ago and your generation is waiting for us to retire. Retiring isn’t going to happen in the next 10 years- because everyone is telling us we will have to live in a box if we let our jobs go. “You will outlive your money” is the mantra. “Work until you are 70″ says Suzie.
All of which causes the ripple effect of the above postings.
How about that being a topic of a post JD?
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I just want to remind you that all the wisest choices financially and education wise will do zero good in life if taking care of YOU takes a backseat. I’m amazed by the progress you’ve made, but if you are in an abusive situation I would do what you gotta do for you. take care
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Congratulations on the progress you have made so far. Having had to leave college twice, change curriculums and careers myself, because of mental health issues, I can commisserate with your challenges. Slow and steady progress is so important as is a support network. You have amazing courage and fortitude. Please pat yourself on the back for how far you have come.
My husband and I have many debts at the moment and are working to pay them down; slow progress. Because of his needing to leave his job as a clinical director of a drug and alcohol program for his own recover; he opened his own clinic, so we have many debts. But the best thing for his mental health. It is now becoming successful and we are slowly paying down debts. Sometimes it seems excruciatingly slow, but we are making progress. That you have saved as much as you have, attained an emergency fund and other funds is encouraging to us!
There are some great suggestions in these comments. Etsy is a good way to sell your items. The relaxation of making your books can also be wonderful. (I do easy quilting, and it keeps me “going” sometimes).
I wish you the very, very best from someone who’s been there. Take care and keep heart.
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I agree with everyone else that you’re making great progress and really turning things around.
As far as what to do about the debt/living situation: have you considered Teach for America? They offer medical insurance, retirement, student loan repayment bonus, loan forebearance, etc. Overall it’s a pretty good program if you’re interested in something like that (and if the doctors support the idea). Most likely you’ll have to relocate, so it might be an idea for the future.
http://www.teachforamerica.org
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While I absolutely appreciate Amber’s sentiment here because TFA can do wonders for career development and offering a stable job, it is NOT a good option for someone who has struggled with mental illness.
As someone who has been through it, I think it is important to note that the rigors of TFA will rock the foundation of the most mentally stable person on the planet.
Please don’t consider putting yourself through the program.
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Teaching- in general- is not a great place for people who know they struggle mentally.
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I have never commented on a GRS Reader Story before, but your story struck a chord with me and I felt compelled to reply. First off, congratulations on graduating and finding a job. You are doing remarkably well and have overcome a lot of obstacles already.
I agree whole-heartedly with all of the first commenter (Kestra)’s suggestions.
I wanted to tack on another option to the moving out issue. If you like children, a lot of families will hire a live-in nanny and pay with free room and board. This is what I did during college. It was pretty simple for the most part – the kids were older so they were at school from 8am-4pm. This would allow you to keep your current job at the library? (Not sure what your hours are.) This may not be your thing, but it’s another option to explore. A lot of families might be sympathetic to your situation and work something out with you.
If your home life is a cause of your mental illness, then you need to get out. Home should be a sanctuary and comfortable shelter. And you should surround yourself with positive, uplifting people. I am by no means qualified to give you advice, but these are things I know from past experience.
I would follow the rest of Kestra’s suggestions related to your financial issues. Definitely get out of debt first before going back to school. You are young and have your whole life to go back and get your Master’s.
Set small goals – maybe give yourself an hour a week to search for a new job or research ways to sell your art. Only by accomplishing small goals can you reach your larger ones. Keep making your books and embroidering – a creative outlet is so important to mental health.
Lastly, remember you are so much stronger than you realize. I hope this helps – please keep us updated on your situation.
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I don’t have an MLS, but I have worked with many over the years, and I think it is a good (and underestimated) way of building wealth over the years. Libraries and librarians are not going away, although the nature of the job is changing. Agree with some of the other commenters that corporate libraries and commercial information providers have the best-paying positions, and the most demand. My advice would be to build the skills you might need in a corporate environment: organization, team-working, and presentation
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106k to turn around and only make 25k? YIKES!
As a society we need to stop putting such an emphasis on going to college, it is not for everyone. You can make 25k without college and the debt that comes along with it. Also, parents and schools need to help guide these 18 year old children in make the best choices. Many kids at 18 aren’t ready to make the best decisions yet. And college and student loans are a HUGE decision that will follow you for the rest of your life. Furthermore, we need to stop encouraging kids to “do what they love.” This results in a ton of psychology and sociology majors that end up with way too much student loan debt and are unable to obtain a job at their new livable wage. Why not encourage them to find a field that they can tolerate that pays decently? They can have hobbies and families to channel thier passions toward, and they wont be riding the poverty line.
None of that really helps you with your situation though, so i will step down from my soap box. It sounds like you are doing the right things at this point. To get out of your parents house, have you considered a roommate?
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Hi Pollyanna,
I also spend a significant portion of my paycheck to see a psychotherapist and psychiatrist. A lot of times I’m frustrated about money and I fear that I’m falling behind my peers in terms of financial or material acquisitions. But on the other hand, I’m happy to have started the process of taking a close look at myself at such a young age (I began therapy at 29 and I’m 32 now). I agree with the cliche about therapy being an investment in yourself. I’m getting an education about how to have relationships that make my life worth living and I hope to keep building on these skills as I age. I just want to remind you that you are spending your money on worthwhile endeavors.
Now, I’ll turn to your actual request for practical feedback: how to manage your day-to-day finances. Does your employer have an option for enrolling in a Flexible Spending Account (FSA)? http://en.wikipedia.org/wiki/Flexible_spending_account
A FSA will help you save on your tax liability. Hopefully, your tax bill is already low because you are taking advantage of the federal income tax deduction for interest paid on your student loans. But you don’t have to pay Social Security withholding tax ( impervious to any deductions) on FSA contributions so that will save you 6.2% (or, 4.2% thanks to a special law for 2011) of the amount you contribute. Also, my experience getting for getting my reimbursements has been painless. I fax in a claim and get a direct deposit in my account within around a week.
I also encourage you in your goals to move out of your parents home (roommates sound like a great option) and getting a higher paying job. I recommend talking (or emailing) all the people you can find who have the job you want and ask about how they got there.
You sound like someone with a good head on her shoulders that can meet their challenges with grace.
Best,
Jen
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NP, another big congratulations to you for focusing on your health and finances and recovering from difficult challenges in both areas. You will prevail! There is so much you are doing right. The first commenter suggested something that I would also like to suggest: look into creative, low-cost living arrangements, especially if living with your parents continues to be an abusive situation. Try checking craigslist regularly for opportunities to rent a room in exchange for pet-sitting, being there overnight for an elderly person, light housekeeping or gardening etc. My other suggestion is to avoid more student loan debt for a master’s degree for the time being, but if your employer will reimburse for your education, definitely take advantage of that! Good luck, you have come a long way. Thanks for sharing your story.
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To second the other comments, there are MANY MANY MANY 20somethings in similar situations. One thing you could do instead of taking on more debt to earn a graduate degree is think about various service occupations that include student loan repayments (focusing on helping others does wonders for mental health!!). Also, if you work a lot of extra jobs it would keep you out of the house while providing extra cash! Just don’t beat yourself up about the student loans…I spent a lot of time beating myself up (and there’s a lot of cultural messages encouraging such self abuse), but turns out time flies, and before you know it you barely have any debt left.
This too shall pass…stay strong, stay busy, and before you know it you’ll be 40 with more contentment and money than you ever imagined!
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Hi NotPolyanna,
Thank you for sharing your story with us. I have tremendous sympathy for what you are and have gone through – I am also a survivor of an abusive family AND an abusive mental health care professional; I have been hospitalized for depression more than once.
From this vantage point, I want to say that you are doing an incredible job of managing your situation and your challenges. I have some inkling of how hard you have been working to deal with all of this, and your resourcefulness and strength is nothing short of mind-blowing. Kudos and good thoughts your way!
I have also dealt with a large student loan in a similar way – having it scared me so much that I paid off 40k in five years. Looking back, I would have done things very differently because right around the time I paid it off, I also had to leave a job situation where I was being bullied. I was crashing badly, and I had very little financial cushion. It was an agonizingly scary time, and the fact that I had a paid-off loan did very little to help me deal with it.
Now I live by the concept of “Safety First” and I personally prioritize being in an abuse-free situation over everything else. For me, that means having as large a savings cushion as possible, and having control over my living situation. As someone ahead of me pointed out, mental and physical health has a direct bearing on earning ability, aside from everything else. I cannot take care of myself if I am sick, and being around abusers makes me sick. But aside from that, I came to see that I have a right to safety and that it simply has got to come first.
That is my personal decision, and in your shoes, I would reduce loan payments to a minimum, and spend everything else on an abuse-free living environment, health care and savings. Moving out of home doesn’t have to mean renting a place by yourself, either. Good roommates are worth their weight in gold – if you can find one, it will help in more than one way. Even though I live with some pretty debilitating PTSD symptoms and need a lot of quiet time by myself, I have a good roommate and find it better than living alone.
Hope my perspective helps even if it’s very different from yours.
I can’t tell you how much I am rooting for you and admire your spirit and intelligence.
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When are we going to start telling our children that humanities degrees aren’t worth $100,000?
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That’s quite an elitist and limited perspective, Tyler. I would venture that it might not be wise to assume that type of debt for any degree. Life can be full of surprising twists and turns and that type of debt for a young person can be incredibly stifling.
In 2011, it’s imperative that the Personal Finance community challenges the oft parroted conventional wisdom. If a student opts to attend a non-local school, room, board, and meals are comparable irrespective of the degree or major. Also, the underlying assumption is that a different major equates to a larger salary which inevitably means better fiscal health – however that assumption is not always accurate. In this recession, some traditionally lucrative fields are even sluggish. Jobs are not guaranteed. Opportunities are not the same across the country. There are a lot of high income earners that are inept money managers.
Mitigating circumstances are also relevant in this scenario. If someone is suffering from debilitating clinical depression, their major in school is of no consequence. Your comment seems narcissistic at worst and untimely/insensitive at best.
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You interpreted my comment as an attack on the humanities in general, which it was not. It is a comment about ROI. The author has invested four years and $100,000 in a degree that gets her $25,000/year, which is less than she would be making tending bar.
It’s a horrible financial decision.
My comment was not elitist nor narcissistic in the slightest. If I told you a ham sandwich wasn’t worth $500, that is not an implication that whatever *I’m* eating obviously is worth $500, it’s just saying “you’re not getting your money’s worth out of that sandwich”. I could be starving to death and your ham sandwich still isn’t worth $500.
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Further, the idea of calling someone ‘elitist’ for suggesting practical education that pays for itself in the long run is plain ridiculous. If anything, dropping $100k on an impractical degree should be the territory of the elite. Who seems more likely to do that, someone named ‘Kennedy’ or “Rockefeller’, or a kid from a working-class background who’s dad bends sheet metal for a living? What about someone who goes to the local state school to take advantage of in-state tuition being lower while they study to be a nurse? Is that a Rockefeller or the child of a blue-collar family?
I can’t believe you even said that — disapproving of a $100k humanities degree is ‘elitist’ like saying ‘a Ferrari is a waste of a lot of money’ is elitist.
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Who are you to characterize anyone’s degree as impractical? Who are you to decide that the choices of a fallible, fragile human being (which is not just OP but everyone on the face of the earth) are inappropriate? Somehow you feel vindicated and insulated from the OP’s fate probably because you are a Software Engineer. I’ve heard this line of thinking before. In my mind, this story would be equally tragic and unfortunate if OP would have majored in engineering or some other science or math oriented major. I worked for a Fortunate 100 company where the division Vice President had both an undergraduate and graduate in Philosophy. Human beings enjoy the illusion of control. Take these pre-meditated steps, go in this particular direction and success will be yours. Everyone has a different path. Success is elusive and nuanced. I think practicality is relative. What’s practical for you may not be practical for someone else. Life has an element of fluidity to it; OP’s salary will more than likely be on an upward trajectory for the rest of her entire life. Needless to say I wholeheartedly disagree with your perspective – and it’s equally obvious you disagree with mine, which is perfectly fine.
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Without prior knowledge of my job title (which i didn’t include anywhere in this post, you did) you would have no argument. Your entire argument is an attack on me because of the job I have, which I *never even mentioned*. None of your arguments lean even in the slightest towards a $100k humanities degree being a good investment.
Yes. I am a software engineer. It is *completely irrelevant* to the discussion about whether a $100k humanities degree is a good investment or not. So any discussion about how fallible and fragile we all are.
I’m done with this conversation now unless you come back with a response that shows how spending $100k on a humanities degree is even remotely close to comparable in terms of ROI to, say, a two-year nursing program at a community college or an apprenticeship as an electrician.
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College isn’t all about ROI. I’m 6 years into my career post Bachelors in English and wouldn’t be able to function in my job if I hadn’t spent 4 years in school. College changed how I think, taught me how to assert my own opinions and knowledge, and helped me transition socially into an adult.
Not completely measurable, but worth $100K to me even if I have to pay it back for the rest of my life.
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A completed college degree in the humanities raises lifetime earnings by an average of $450,000 compared to a high school diploma and $250,000 compared to a completed associates degree, according to this study, which looks pretty methodologically sound: http://www.incontext.indiana.edu/2009/mar-apr/article1.asp
The unemployment rate for college graduates in 2010 was 5.4%, compared to 7.0% for people with an associate degree and 10.3% for those with a high school diploma (http://www.bls.gov/emp/ep_chart_001.htm).
Of course, college diplomas vary in both cost and value – we should certainly encourage people to try to maximize value in their education. But a college degree is one of the better investments that most people can make, even if it’s in the humanities.
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True, but averaged out over an entire lifetime of work, that’s only about $10k more a year (compared to the high school graduate). Add an obscene amount of loans into the equation and, well, you’re not exactly getting a decent ROI.
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Again, what’s the deal with this ROI stuff? I agree that Tyler and others are being, not so much elitist, but definitely biased against humanities and other low-paying degrees. What are students supposed to think, don’t bother doing what you like because your ROI will suck if you get an art degree? We should all be engineers and doctors and stock brokers, then. No other degree has a nice Return on Investment.
As long as you’re willing to bust your butt paying off your loans, who cares whether it’s as lucrative as a law degree?
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Something I never understand is why the Americans pay so much for their degrees. If I was American, I would try to study abroad my first degree in a country with cheaper higher education. I paid little for my education and get classes by world class professors, something I understand most US private colleges (out of the good ones) does not have at all, but students pay them a lot for an education that in a world ranking is too expensive.
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The problem with that is many countries where you can study abroad jack up the price for international students, and there is no way to get loans for international study unless you are studying through a US accredited program (which means you pay US tuition rates).
I would have LOVED to get my degree overseas, and it would still have cost half of what I paid for my US degree, but I couldn’t pay out of pocket, and not even private loans will pay for a non-US-accredited school.
To be honest, if I could find a way to pay for it, I would get a master’s (or equivalent) overseas, even now. Unless you know something I don’t know, that’s not possible for me.
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The prices aren’t “jacked up”. Countries like Canada aren’t trying to exploit international students.
When you look at the actual cost of an education, the student/parents only pay a certain percentage. The rest is covered by the government. (I don’t actually know the current numbers, so I’m not sure if its 40/60 or 20/80). International students coming to Canada are not usually tax payers here, so it would be unreasonable to expect Canadian citizens to fund their education. (Though there are scholarships and research grants available, which are funded by tax payers.)
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Foreign student fees are generally 2 to 3 times the fees for local students. At least, they were in the UK, France, and Australia when I looked at studying abroad in 2002. Foreign students are also excluded from many scholarship opportunities/financial aid schemes that local students can take advantage of. I did end up studying in Australia, but the cost was comparable to a mid-range school in the US, the cost of living was very high in Sydney, and travel costs were also very high.
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I plan on doing this for my grad school degrees. I only have about $13k in student loans from undergrad (I graduated a year early), so I don’t have an obnoxious amount of loans, but once I saw how inexpensive schooling was in my field in Spain, I’d be an idiot not to go. Of course, I can’t go right away because I need to save up money for tuition and living expenses, since I obviously can’t take out loans, but I’ll be a happier person for it, both financially and otherwise.
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It seems like I read at least one story a week on various blogs about kids in 6 figure (or close) debt trying like hell to survive. The stories are getting out there and hopefully high school students will start reading them and asking questions instead of blindly following advice to borrow, borrow, borrow like the OP unfortunately did.
I don’t even think young kids can fathom this much money and how they’ll end up paying it back. How do their parents sleep at night?
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Having dealt with problem parents in a student aid situation, there’s a good chance that if NotPollyanna AND her family had been able to apply properly for financial aid, she wouldn’t be $106,000 in the hole.
(I also struggled with mental health issues going through school and getting an MLS. I also ended up with more debt than I probably needed to, but not to that level– it was 20 years ago, and I was able to apply for lots of scholarships and get some!)
I would suggest that first of all you ask around about programs to help people with screwed up private student loan situations like yours. Check with your congressional representative– they are on the hot seat about private lending to college goers these days. Also check into low cost insurance for underinsured adults that may be available through your state.
In your shoes, I chose to get the heck out of dodge. Look into sharing an apartment if you can stand it, or some sort of room rental arrangement– I didn’t, and I really should have. It can be a lot cheaper than having an apartment. Subletting a room from someone is another option. While you may need to give yourself the option of bailing out of a communal living situation on short notice, change is a good as a rest sometimes when it comes to crazy family.
If you want to go back to school, you ABSOLUTELY need to get out of the house, or your parents’ incomes will be counted toward your qualifications for financial aid you apply for. You don’t want that.
Budget yourself a small budget for luxuries, and then plan out your get out of debt trajectory– knowing that you will be done on such and such a date will help you hold out.
Good luck to you. This is probably going to be one of the toughest parts of your life, but it gets easier.
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FYI – 24% of 25k = 6,000 in medical expenses.
With the 7.5% floor on itemizing medical expenses, that means the first 1,875.00 are not deductible. So only 4,125 are deductible.
You are better off with the standard deduction (which is almost a rule if you do not own a home and pay mortgage interest).
As far as student loan interest is concerned, however, you can take the first 2,600 (depending on the year, but it is always around that amount). If you haven’t been doing that, file some amended returns and get the money you should have in the past (plus interest).
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sounds like you’re doing really well with the challenges you’ve been dealt; congrats. also it seems you’ve correctly identified increasing your salary as the best possible current way to help your finances. You probably know but I’ll just remind that networking is the most important part of your job search.
do you have any transportation expenses? if yes, you might be able to cut them by getting a bike (depending on the route you’d travel). If your current home is not bikeable, keep this aspect in mind while searching for other housing. It’s cheaper than car or bus or anything except walking.
also, I would consider group house living as a way to cheaply get out of your parents’ house. Living together with 2-5 others is very economical and can be fun, although there are of course potential drawbacks. I think it’s great and have been living in community for years.
as has been mentioned, if you were to post a more detailed breakdown of your expenses, people might be able to help more. But — you’re only spending 18% of [after-tax?] 25k, so there clearly aren’t many expenses to cut.
cheers and good luck.
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It sounds like you’ve come a long way, congrats!
Let’s start with the Ramsey advice I’m seeing in the comments already (and as a financial planner I am often frustrated with his single minded advice). I know a lot of people on this blog are Ramsey followers. He’s great a propogating his single blanket statement to get people going in the right direction in relation to their debt. He’s not great when it comes to specific situational advice. Largely do to the fact that he really is clueless when it comes to personal finance. So for the people who have no knowledge of finance and are too lazy to reasearch he is great because he gets them pointed in the right direction. But the truth is you would eventually get to Canada is you started driving north and kept going. If you planned out your trip you would likely get there a little faster and have a more enjoyable trip along the way. Since it doesn’t sound like your lazy let’s start with the loans.
You can not get out of student loans by declaring bankruptcy so it would seem like the best idea is to have as few as possible because your going to have to pay them back. This isn’t always the case. Student loans can be forgiven for working in certain public sectors. One of which happens to be public libraries. Sounds awefully convenient for someone in your circumstances, but you will have to make sure that your specific loans qualify. As you did not mention your specific type of loans, here is a good place to start: http://www.finaid.org/loans/forgiveness.phtml & http://www.finaid.org/loans/publicservice.phtml. You will also want to speak with your student loan company in regard this strategy and your specific loans (get their answer in writing before you change anything). The next option is finding out if your loans are eligible to be forgiven after a certain amount of time if you make payments of a certain percentage of your income. Some of these rules recently changed, so do your research and speak with your loan company. Either way, if either of these pan out you may want to decrease your student loan payments dramtically and increase your personal savings. As we are in a recession liquidity is at a preimum.
Next let’s talk about going back to school to get your masters. If you are going to qualify to get the new loans forgiven and you are going to earn more money doing something that would make you happier the choice is likely pretty clear but as we can’t count on the laws for forgiveness staying the same we still need to do some math to understand the potential consequences of your decision. The worst of all worlds is to wait until your loans are paid to go back to school. First off it’s much more difficult to get back into school mode once you are out of it. Second if you are going back to school and plan to earn more money with the degree, the more time you have with the degree over the course of your lifetime the more lifetime dollars you will earn. Do a survey of job prospects and be honest about any changes in emplyability and earnings. You will want to use a online present value calulator to find out the cost of your masters degree. You will then want to use the calculator to find the lifetime difference in emplyement income. If the present value of the excess money you will earn over the rest of your working career is substantially more than the present value of your loan debt, then it not only makes sense to opt for a masters because it is your goal, it also makes monetary sense.
Now we have to consider the economic environment we are in.
We are in a recession and are likely to have one of two things happen:
1. Deflation – You will be out of a job and it doesn’t matter if you have $10k or $10mil in college debt, you won’t be able to pay it back and your credit will suffer greatly. Not to worry so will everyone elses. At a certain point you hae to decide what your credit is really worth. It makes it easier to buy a house or a car because you can take out a loan, it makes it easier to find a job, and it makes insurance less expensive, so the break even point is high but there is a limit and near term deflation may trigger that debate. In the current event, with your income level default is not a good idea but it we end up hitting major deflation it may become debatable. If it was debt that would only follow you for 7 years or so we would be debating default now but student loan default will follow you for the rest of your life so it changes the equation. Anyhow taking on additional debt if you are forced into default has no additional negative consequence. In either situation you would have no income but you would have an asset (your higher education and better earning power) so when things turn around you would be more employable and would earn more (as you would need to because you will have to pay cash for everything for the rest of your life).
2. Inflation – Probably more likely. This is likely the way that the government will try to get out of it’s large debts. It sucks for those that have saved money and loaned it out via bonds or in banks but just like it will get the government out of a large chuck of it’s debt, it will get you out of a large chuck of your’s. This would mean that your salary will increase to keep up with the higher cost of items while your loans will only increase by their set interest rates. If you are earning $40k because you have your masters and have a 10% cost of living increase your raise is $4k if you chose not to get the masters and are still earning $25k your 10% raise would be $2.5K. So in an inflationary environment it makes sense to have a masters degree.
Now you have some of the info you will need to honestly analyse before you make your decision. Do keep in mind that if you are getting loan forgiveness for paying a certain % of your pay and you get a higher paying job, more money will have to go to the loan company before your loan is forgiven. This must be factored into your calculations. What you likely won’t need to factor in to this repayment plans is any improvement in health insurance received from the employer by having the dream job, but this should be factored into your return on educational investment present value calculation.
Finally, let’s talk about the health care expenses. I assume most of this money is going toward mental healthcare. Most low income health care subsidies do not cover a mental health in any meaningful way, but it is still worth checking on as some do. You need to sit down an honestly asses each of your health care providers. Speak with them and find out what they hope to achieve through their interaction with you. Rate their success immediately after the meetings, the day after, the week after, and maybe a few other time intervals. This way you can audit as to whether or not they are making progress. Keep a journal but in the journal don’t just write notes, quantify things so that they can be graphed and understood over a longer time horizon. The next thing to do is to look for support groups in churchs and community organizations that hope to achieve the same things your mental health professionals are hoping to achieve. Attend the meetings and audit them. Now you have a way to compare cost and benefit. I don’t know your specific cirsumstances but what we hope to do here is to lower the cost of care and increase the quality and benefit. This is not an area that you want to go bargain basement but it is important not to spend lavishly to little or no effect. You are ultimately the only person who can honestly manage your care to your best benefit.
I am leaving my email off this message as I don’t really want to be contacted by just random people but if you have any questions or want to talk about anything I’ve explained, I authorize J.D Roth to release my email to you, otherwise I hope this gives you somewhere to start your research.
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Thank you for so cogently explaining why Dave Ramsey’s advice sometimes scares me with his insistence that one size fits all. I give him props for getting so many people on the road to financial health but he really is more personality than professional. His investment advice is beyond bad.
And thanks to you for so graciously taking so much of your morning to give really top notch advice to NP.
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It’s interesting that you preface your comment with your credentials; you’re a financial planner. That admission does not put your advice in any better stead in my mind than anyone else in the GRS community. People should still aggressively vet the advice of any professional. To refer to people who adhere to Ramsey’s principles as “followers” reduces them to mindless robots, cult-like even. Then to go further and say Ramsey is good for lazy people. I think that that’s laughable. When I listen to Ramsey’s podcasts, there is nothing lazy about cutting your budget to the bone and retiring tens of thousands of debt in a relatively short time frame. I highly doubt that you’ve impacted a sizable fraction of lives that Ramsey has. I find Ramsey incredibly inspirational and his techniques simple and easy to implement. His absolutist stance can be readily digested. He’s also a multi-millionaire, are you? I realize that you and other people in the field may not have such a public forum/platform with which to promote your products and generate income. All that aside, just from your investment advice -do you have a million dollar net worth? I like getting advice about money from people with money.
Now, I would not consider myself a Ramsey zealot. I have read a good number of personal finance books and blogs – I like to expose myself to different perspectives. I glean what works for me from every informational resource I’ve encountered and dismiss what does not work.
I find your advice tedious and convoluted; I have yet to discern an actionable step from it. Should the poster spend their limited time researching something as esoteric as deflation? Seriously?
There is no need to brainstorm strategies with your lender. The strategy is to send them as much money as you possibly can whenever you can however you can. Loan forgiveness in a decade or in some other instances after twenty five years is not a plan. $4K of liquidity for a young woman who lives at home with probably no children/car is plenty. School mode!? Inviting someone to pile on debt due to your apocalyptic view of the American economy, I think this professionally irresponsible.
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@dreamchaser57 I don’t really want to get in a back and forth but I can see that I have miscommunicated and don’t want to be misunderstood. I agree that people should vet the advice of professionals, that is why I reccomended that she vet her health professionals. My sole piece of advice to her was to research, not deflation, her options. The discussion on deflation was a run through the changes we are looking at going through as an economy in the terms of Pascal’s wager. It often helps to frame the upside and downside of a decision.
I did not mean to insult Ramsey, simply to put his advice in context. He is often portrayed as a financial professional, which he has to legally disclaim away during the show because he is not. And your right he has done a lot of good for more people than I could ever hope to. While I manage something on the magnitude of hundreds of millions of dollars more than Ramsey does, it is for wealthy individuals who are certainly better off with my help, but who effectly don’t need help. They can bury the money in the backyard and if inflation is high they can grab 2 handfuls of money instead of just one. I come from no money and to answer your question have done well for myself, but realize that while I can do “most well” by serving those that can afford to pay for my time, I can do “most good” by helping those that can’t. That is the reason I responded in hopes of giving her a starting place for her research. My reference to Ramsey being for the lazy was not meant to say that someone who worked to pay off their debt was physically lazy. I was referencing that there are often better ways to deal with the situation and that his “one-size-fits-all” approach was for the intellectually lazy. It can lead to major problems in some cases. I forget the exact circumstances but during the housing downturn I heard him tel a caller making somewhere around $50k to pay off her mortgage that was somewhere around $150k underwater and then think about downsizing to increase her savings. I don’t know any competent finacial advisor that would tell you your short term credit score was worth 3 years of labor. She effectively ended up postpoing retirement by at least 3 years so the bank didn’t have to take any losses if she listened to his advice. It’s not that he is bad or done more bad than good, but that he does do some bad and doesn’t have to live with the consequences. My job rests on my competance, his rests on his number of listeners. He’s not a bad guy but you also have to know that his understanding of the topics at hand is limited and he has to present his answers in a certain way. To note: he didn’t make his money investing, he went bankrupt that way. He made his money as an entertainer.
To follow-up with your last paragraph if she can reduce her payments and pocket the remiander because the laws to protect people like her will step in and cover the remainder, it may make sense to let the government pay for the debt they are willing to pay for rather than throwing all her money into the debt to save the government from covering the debt. If she could lower her monthly loan payment to the point that the remainder of what she use to pay in loan repayment would allow her to move out of the house into a more healthy environment and she would still have her loans repaid in 10 years, it doesn’t sounds like to bad of a bargain, dependant on what her particular home circumstance is. Would you be willing to pay an extra $100 per month for 3-4 years to get out of some of the horrible home circumstances you’ve hear about on the news 6-7 years early? This is why everything was preface with me saying I don’t know the specifics.
And finally if she adds and extra $100k of debt but increases lifetime earning by $1mil it makes sense expecially if the government ends up footing the bill for the extra $100k in debt. It’s not an apocalyptic view in fact it’s not really all that bad (well deflation would be bad but it likely won’t be deflation). We are likely going to see increased inflation within the next few years, it’s the way these things go. Read “This Time is Different” it covers the last 800 years of market meltdowns.
Again the point of all my writing was to give her some food for thought and encourage her to think. Not to Ramsey bash and not to encourage her into debt. It is often helpful to take a step back and look at all options before following along the common sense path. That is all I am encouraging. Didn’t mean to step on anyone’s toes.
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Josh, I REALLY appreciate your follow up post, it really helped to clarify the advice you initially offered. Best of luck to you in your professional endeavors. If your schedule permits, perhaps you could start a blog or at the very least offer a Guest Post to GRS that deals with inflation in very real, accessible terms.
My only reservation is that what works in economic theory can be disastrous in practice. People and families are collapsing under financial pressures.
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You’re message had me going for awhile, until you’re grammar drove me straight up the wall… Seriously, your message is diluted by your lack of concern for the details. This could be considered a fatal flaw in a financial planner.
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One of the problems I have with Dave Ramsay is that his tactics re: paying for college actually may end up costing a lot of people *more* for college than they would otherwise have paid.
The ‘discount rate’– I.e. the percentage of all billed tuition that is paid for by financial aid– in private colleges generally runs between 40 and 45 percent. Financial aid is generally determined based on ones tax situation and assets.
So, if you have, say $40,000 in the bank to pay for 4 years of a state college at 10K a year, you’re going to pay that out completely– and hope you don’t have to pay more because they increase tuition. But if you don’t have that cash on hand, and you do qualify for scholarships & financial aid, you may be in a position to end up paying less than that for a private college– if they want you.
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@Diane I knew someone would point out the grammar after I read what was posted. I had a Brazilian friend type while I cooked\dictated. Upon reflection, the cooking and writing would have been better served if the roles had been reversed.
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For those suggesting it, loan forgiveness (for public sector jobs) and income-contingent repayment are not options because all her loans are private. I bet her interest rates are 10% or more but there’s nothing she can do about that either.
I second those who say not to go back to school unless/until either (1) she has paid back her undergraduate debt, (2) her employer pays for her MLS degree. Preferably both, to be honest.
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I thought the comments so far have been very helpful and offered some really great ideas- tangible steps you can take. And I agree with all of them in saying Good Job on taking control and responsibility over your situation, even if it’s not easy.
One suggestion I have that was touched upon slightly is budgeting. I’m sure you’re spending is minimal but you should still budget every single dollar. Determine how much you will spend on food, gas, eatingo out, etc. People tend to overspend on these categories without even realizing.
Feel free to contact me through my website as well. Good luck!
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Let me add my comments.
NP, you are doing great. You are a courageous, dedicated, outstanding person who deserves the best because you are doing so much for yourself.
I do not have suggestions like take a roommate, get a part-time job, etc., as in some other comments; these are all possible things to consider.
What I do want to say is: one, make long range goals to keep you from being frustrated by short-term setbacks.
I would suggest making a decision on these items: how much student loans you will expect to pay in a year, how much into saving, how much into specific expenses, etc.
Then make a chart of some kind, your own choosing, and post it somewhere you can see it. Like your own refrigerator. My point is that while things might seem insurmountable by looking at the entire amount of debt, by breaking numbers down to annual (or even monthly) pieces, you can not only keep yourself on track, you can track progress, and you can also manage the short term experience; and thereby not necessarily feel overwhelmed by the entire load of debt.
Pay off this year’s amount in this year (and… as long as you on track) forget about next year. It will happen by itself whether you fret over it or not.
Second, you might feel like between job and person pursuits you have little time, but I recommend you find a place to volunteer some time. If at all possible in some environment in which you are comfortable, in the best case where you are helping people with some similar conditions are you portraying yourself.
You needn’t take on the world, just helping a few others at your own pace.
In my opinion (and what do I know?), the possibilities of helping a few others, perhaps those even worse off than you, will help in so many ways (need I mention self-esteem, sense of capabilities, etc.).
No matter what you choose to do, if you make a plan, and stick to it, and keep your expenses under control, and find places to be of service to others, you will not only thrive but make enormous progress.
Not only progress, but eventually you will look back and be proud of how much you have done, and you will be debt free. That’s guaranteed.
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I think you are doing the very best you can with your situation. You are 26. You have time to pay off the student loan debt and believe me – it could be much much worse. The much much worse category includes graduate/professional student loans. With regard to that issue, set up informational interviews w/ people who have gotten *recent* degrees in the area you would like to study. You also want to hit up the more seasoned professionals b/c they have some valuable insight too. I have personally realized there is a big gap in reality between people who got their advanced degrees 10 years before me, and people who have received them over the last 5 years. So, cast a wide net and don’t disregard the more recent grads.
With regard to mental health… you can’t put a price on it. Our environments speak to us all day and influence our thoughts constantly for better or for worse.
You sound very mature and very much in charge of your finances. Ever consider a career in personal finance??? I really wish you the best of luck.
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@Honey It depends on the type of private loan and to some extent whether or not she can consolidate it with a new public loan for additional education. As taken from FinAid.org:
Eligible Loans: Eligible loans include Federal Direct Stafford Loans (Subsidized and Unsubsidized), Federal Direct PLUS Loans, and Federal Direct Consolidation Loans. Borrowers in the Direct Loan program do not need to consolidate in order to qualify for loan forgiveness. Borrowers in the FFEL program will need to consolidate into Direct Loans.
(Beginning on July 1, 2008, FFEL borrowers may obtain a Federal Direct Consolidation Loan in order to qualify for public service loan forgiveness even if they had previously consolidated in the FFEL program. Such borrowers will be restricted to the income-based repayment, income-contingent repayment and standard repayment plans. Before July 1, 2008, FFEL borrowers who have not yet consolidated may obtain a Federal Direct Consolidation Loan in order to obtain income contingent repayment by stating that they are unable to obtain income sensitive repayment terms acceptable to the borrower. Before July 1, 2008, FFEL borrowers who have already consolidated in the FFEL program are only able to obtain a Federal Direct Consolidation Loan with income-contingent repayment terms if their loans have been selected by a guarantee agency for default aversion. Note that borrowers who took advantage of the early repayment status loophole have already consolidated their loans and so are subject to the more stringent requirements for a subsequent consolidation into the Direct Loan program.)
Although Perkins Loans are not eligible for public service loan forgiveness, if they are included in a Federal Direct Consolidation Loan the entire consolidation loan, including the Perkins Loans, is eligible for public service loan forgiveness. One may use income-based repayment and income-contingent repayment on such a consolidation loan.
Perkins loan borrowers will need to consider the tradeoffs of including the Perkins loans in a federal direct consolidation loan. When Perkins loans are consolidated, they lose several favorable benefits, such as subsidized interest, a 9 month grace period, and a generous loan forgiveness program.
Although Parent PLUS loans are nominally eligible for forgiveness, since the definition of Eligible Federal Direct Loan in section 455(m)(3)(A) of the Higher Education Act does not preclude Parent PLUS, such loans are not eligible for income-based repayment (section 493C(a)(1)) or income-contingent repayment (section 455(d)(1)(D)), so there will be no financial benefit to seeking forgiveness for such loans. However, if a Parent PLUS loan is included in a Federal Direct Consolidation Loan, it will be eligible for income-contingent repayment (but not income-based repayment), making it possible to obtain forgiveness. (However, income contingent repayment is not available for Federal Direct Consolidation Loans that include PLUS loans for borrowers who entered repayment before July 1, 2006, per 34 CFR 685.208(a)(1)(ii). Income contingent repayment is available for Federal Direct Consolidation Loans that include PLUS loans for borrowers who entered repayment on or after July 1, 2006, per 34 CFR 685.208(a)(2)(iii).)
Grad PLUS loans are eligible for forgiveness. However, the language in section 455(d)(1)(D) of the Higher Education Act of 1965 precludes the use of income-contingent repayment for PLUS loans. This is fixed by section 493C(b)(3), which amends the exclusion to apply to just Parent PLUS loans. But that amendment is effective July 1, 2009. So until July 1, 2009, income-contingent repayment cannot be used for Grad PLUS loans. On or after July 1, 2009, one can use income-contingent repayment for Grad PLUS loans. (Income-based repayment also becomes available for all direct loans except Parent PLUS and Perkins Loans on July 1, 2009.) However, as with Parent PLUS loans, Grad PLUS loans can become eligible for income-contingent repayment provided that they are included in a Federal Direct Consolidation Loan and the borrower did not enter repayment before July 1, 2006. Consolidation loans that include a Grad PLUS loan are also eligible for income-based repayment starting July 1, 2009.
Note that borrowers who took advantage of the early repayment status loophole to consolidate their loans during the in-school period technically entered repayment before July 1, 2006.
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It was my understanding that she didn’t have Federal Direct Stafford Loans (Subsidized and Unsubsidized), Federal Direct PLUS Loans, or Federal Direct Consolidation Loans. It sounded to me like she was getting a school “loan” like the ones that major credit cards give, or maybe a loan direct from Sallie Mae that the government has nothing to do with.
If she did go back to a Master’s degree, she could pay off some of her undergraduate private loans by maxing out her Stafford loans. It would give her breathing room while she was in school and get her out from under the horrible predatory loans that she is in. But that sort of thing has to be managed very carefully. If she’s just going to inflate her standard of living then it’s a waste.
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I totally agree that Not Pollyanna seems to be doing extremely well, coping and managing her mental illness. She deserves our respect and admiration for how well she is managing! Good for you!
I can’t believe that after spending $100k on a degree that she’s only being paid $25,000 a year…! At what point do people spending so much money on their education actually think about what their earning potential will be? This is not a negative comment directed towards Not Pollyanna, but a general question. I’ve seen other posters here writing about their HUGE student costs/debt and many also have quite low paying jobs by comparison ($40k and under would be “low paying” to me if it took $100k in education costs to get that job).
In Ontario, Canada where I live, the minimum wage is about $10 an hour (think unskilled labour, non-unionized retail workers, etc), and that alone totals $20,800 a year…not too far away from the $25k that Not Pollyanna makes with an expensive degree. I don’t understand how empoloyers can pay people so little money and yet demand a degree before they’ll hire…$25K a year is only $12 an hour based on a 40hr work week. The employer isn’t putting much economic value at all on the degree…yet by demanding the degree, there is the perception that they value it…definite disconnect there!
Good luck to Not Pollyanna and keep moving on and improving!
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Wow! My heart goes out to you–you have made amazing progress while dealing with pretty overwhelming obstacles. Having been bad living situations, I part with a lot of the other posters. If living at home is still contributing to your mental health issues: “Some abusive family situations that contributed to my mental illness have not completely ended.” I would personally make getting away from that situation a priority. There are some great suggestions above; I would also put the word out to anyone you can that you’re looking for a low-cost rental/barter situation. Perhaps your mental health team can be of help?
Have you thought about government jobs? Believe it or not, the government hires librarians, etc… check out usajobs.gov. Depending on what city you live it, there maybe opportunities!
If money is really tight, can you defer your loans just until you can start breathing again; I don’t suggest this lightly but it may give you another angle to think about.
As for graduate school, I think it is a fantastic thought…but maybe a little premature. However, there are affordable online MLIS programs and parttime programs…. Does your current employer offer any tuition reimbursement? Would you qualify for scholarships, grants, fellowships that would allow you to afford it?
You are doing an amazing job keeping control over it all! Keep chipping away at it, keep building your support network, and keep finding things to be positive and greatful for. I am incredibly impressed and know you will come out on top!
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Yikes! That’s a lot of debt for a Humanities degree (I’m sorry if that sounds rude but it’s true).
I’d suggest the author look for freelance gigs as a writer, there are several websites that act as market places for blogs that need content written, TextBrokers (I’m not affiliated with them in anyway). You can take on as much or as little work as you can handle.
Good luck with your debt and improving your health. Your health has to come first.
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If your parents are abusive, you need to prioritize getting out of the house. It doesn’t matter what kind of abuse it is. I swore to myself, when I moved out, that I would live in a cardboard box before I lived with my parents again. (Fortunately, I have never had to make that decision.) Being away from them helped my mental and spiritual well-being more than not having debt.
I am surprised that more commenters have not suggested roommates. If your area is expensive, certainly there are others looking to share space. Or you could look for a room to rent, as opposed to your own place.
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I think it matters the extent to which they are abusive and her ability to handle that stress vs. the stress of trying to pay for somewhere to live. I know personally that my mother is verbally abusive to me but I am learning to ignore it when I go home between semesters. I am planning to have to live with them for a year while my husband finishes his degree because I can’t find a job in the college town and my parents are willing to let me live there for free. Trying to afford my rent and his would be very difficult, and honestly, I know that I can deal with my parents for a while if there is an end in sight.
I wonder also if she has other family she could live with for free.
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My mother had bad depression problems most of her life. One of her biggest problems (in my opinion) was being too sensitive to any critisims or even just percieved critisim. I agree that moving away from parents is good but in this case I think just sucking it up and getting a tough skin may be better. And…yes getting your own life outside of home. Get back at them by using the free board to pay off your loan. :0)
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Because I’m 68 (!), I can look back on an abusive family situation and see my actions in some perspective. I went 3,000 miles away from my family for my first degree. Halfway across the country, I could breathe deeply and think clearly. I honestly don’t think I could have come up with imaginative and clear solutions to life’s challenges if I’d been under my parents’ direct influence. After I left home, I always had roommates and once a community living situation. That made life even better! I would have been considered poor, but I was rich in my inner self. I also found that traveling and working in other countries helped me develop new perspectives. I had financial success later in life than most people did, but I was happy. I plugged away at my student loan and now it’s a very distant memory. Somehow it got paid, a little bit at a time. But the ability to breathe and function fully outside my parents’ home was the most powerful force in my growth and happiness. Perhaps my experience can be useful to you. Good luck! Your strength and perseverance will see you through.
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Heather, this is excellent advice. There’s a wonderful book called “Sensing the Self” on eating disorders. The author analyzed in-depth interviews with approximately a dozen women who had recovered from eating disorders, and she noted that none of them was able to recover at home. The patterns and emotional dynamics are too intense and ingrained. I also found that distance was extremely helpful.
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Anna -
One problem is that jobs which used to be filled by high school/some college now require a BA. And employers haven’t raised the salary to reflect that. The student loans required to pay for the BA are the grad’s “problem,” not the employer’s. Despite the fact that the degree requirement is new.
It used to be that state colleges were supported out of tax revenues, which is ending. However, employers are not stepping up by either paying parents enough to save for their children’s college education, nor are they paying new grads enough to cover their loans.
The US developed a low-tax system where many things other industrialized nations paid for out of taxes (health care, pensions, college costs, et al.) were covered by employers. Employers are no longer covering these costs, but the system is not changing to reflect that fact.
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