I Paid Off $194k in Student Loans in Six Years. It Wasn’t Easy(benjaminlabaschin.com) |
I Paid Off $194k in Student Loans in Six Years. It Wasn’t Easy(benjaminlabaschin.com) |
Obviously, this was a significant milestone for me. So, I took this opportunity to reflect on my journey so far. How I even came to owe that much money, how I overcame this obstacle, and what it all means to me.
That's not what the blog post says at all. The author talked about a bunch of bad choices.
> You spent $200k on a degree which awarded you a job that allowed you (with some expected struggle) to pay it off.
That's not what happened. In short, here is the series of events, that happened over a number of years:
1. Graduated with a double major in economics and environmental studies, plus $150K debt
2. Got a job pulling weeds at the Chicago Botanic Gardens for $12/hour
3. Got a job as an economic researcher at Arity for $50K/year
4. Taught himself data science and machine learning
5. Got a job in data science for >$100K/year
It was only 5 that allowed him to pay off his student loan debt. The undergrad degree did not directly lead to a well-paying job.
And let me just state the obvious: it appears that you are good with words. And the ability to clearly communicate complex topics in writing is a lot less common than you might think. My pet theory is that that's why working remotely didn't turn out well for so many people.
The system works.
It has finally nullified any socio-economic advantage it once held as evidenced by the large number of graduates unable to repay their student loans.
The solution --- stop steering your kids toward college. AI is working toward eliminating many of these "careers" in the near future anyway.
Instead, orient them toward entrepreneurism. A business as simple as landscaping or construction can be just as financially rewarding as being a corporate desk jockey ... and even more so in some cases.
The key element here is to learn the trade but then move up to hiring/managing others who do the actual work --- for a company owned by you.
Honestly, the sense of despair people have in getting jobs is so sad to me. I've interacted with other young adults who are in the same situation. This sense of "I played the game the way I thought I was supposed to and now this??". I do all I can to help them connect them with others, but it's still really disappointing.
I was glad he "made it" in the end, but I'm not convinced that "near mental breakdowns" are healthy and worth it. And then... survivorship bias. For every talented person like this that excels academically and has a flair for long for story telling, there's another 9 or 99, that don't, and are still stuck in the trenches, and they don't even have the time/resources to write their equally emotive but even more shitty story.
If anything, I think that should be the story. You make choices to try to dig yourself out, and you end up digging yourself further down the hole.
I don't mean to suggest you did the wrong thing, but I want to share a perspective from one of my friends. She has a similar amount of debt, and is simply choosing to make minimum payments for the rest of her life, maybe even default at some point. She says that spending her money on herself while she is young enough to enjoy it is more important than living frugally for decades to end up old without any money anyway. But she has also considered marrying, then being a stay at home mom or working under the table jobs so that she can default without getting her wages garnished. I'm not burdened by debt, but I would definitely be thinking of something similar in a case like that. Also reminds me of the credit-maxing meme. While I generally like market incentives, I think student loans are becoming extremely high risk investments. I'm lucky enough to have a well paying job, but I'm still worried about what paying for my child's education will be like. Should I make them take on hundreds of thousands in loans, or should I delay my retirement for a decade? The future seems bleak if we don't get the cost of education under control.
I feel incredibly fortunate to have been able to graduate debt-free, through a combination of a) attending school in Canada, where tuition costs are less absurd than the US; b) some money my parents saved for their children's education; and c) participation in a co-op education model. Basically, alternating between one semester in school, one semester at a co-op job, and no summers off (though really, how many college students go home for the summer and take a job at Starbucks anyway?). I graduated having financed my education by myself after the first year, and with ~2 years of (relevant) work experience already under my belt. The connections from one of those jobs also ended up helping me get the job I have now.
Like I said, I feel very fortunate, and this approach won't necessarily fit all use cases. But I heartily recommend a co-op education model any chance I get. Even if it could help you avoid taking on $10k in student debt, that feels like a win.
The current system doesn't encourage the institutes to do anything other than spiral costs, burn money and zero responsibility to provide a product focused on making sure that loan is ever paid back.
Say this as someone who managed to pay theirs off, just think "forgiveness" and other ideas are temporary solutions we'll end up having to repeat over and over. Let's just have a permanent solution with accountability for what they are providing for the cost.
Honestly this is the issue. Colleges sell education. People think they are buying a future income stream. I don't blame people, because employers have by and large conflated the two. But this misalignment is at the heart of a lot of the cost discourse.
Stop federal guarantees of loans, and allow loans to be discharged in bankruptcy. Make loans a risk and they won't give $200k to a sociology major with no prospects because they know they won't see a return.
It feels so good. I paid off about $60k of debt in 1.5 years after college while living at home. It was hard but worth it.
Congrats @EconoBen :)
Drawing $17xx bar and slapping $1494,97 onto it... whereas other bars match the label with the height.
I just couldn't parse how $1,4xx - $1,4yy would end up $408,56. And then in the text there is a number not charted: $1902 to just add to confusion, but OK, that's not what you get on hand.
And then "$1106.42 per month, my public loans $387.02. Altogether, I would owe $1493.22" - the sum is actually .44
Author should fix something.
Unfortunately, there are so many "life coaches" that they drown out the people who could have actually been a good coach to this person.
Congratulations on your achievement though! Being debt free is not normal anymore and it comes with a surprising amount benefits in other areas of your life.
I think you're over-reacting to some anecdotes.
> The solution --- stop steering your kids toward college. AI is working toward eliminating many of these "careers" in the near future anyway.
> Instead, orient them toward entrepreneurism. A business as simple as landscaping or construction can be just as financially rewarding as being a corporate desk jockey ... and even more so in some cases.
To put it bluntly: that's dumb advice that also takes contrarianism to an unreasonable extreme.
IMHO, the more reasonable reaction the situation is to steer your kids towards an affordable college and a degree path that has a reasonable career at the other end. So towards a decent but unprestigious state school, away from no-name private liberal arts schools and famous schools (unless you they can score a fantastic scholarship); way from majoring in anthropology, literature, or music; etc.
Edit: Also it doesn't seem super wise, period, to advise your kid to go into some low skill/low capital business, then expect them to magically make a successful small business out of it. If people actually took your advice in large numbers, the competition is going to be cutthroat.
Any less wise than sending them to some diploma mill and expecting them to make a successful career out of it once they are saddled with debt?
Student loan debt is approaching $2 trillion with over 22 million borrowers. Everybody and his brother has bought a degree which makes one not all that special in the current economy.
Degree or not, success in today's environment is highly dependent on personal initiative. I personally know plumbers and landscapers and roofers and delivery drivers who are *very* successful --- mainly because they multiple their skills by hiring others. I also know plenty of college grads who work low skilled service jobs.
Some fields require a post-secondary education. You can't get around that. If you want to be an engineer or a doctor, you need to go that route. In that case, I agree with you. Look for more affordable options and figure out how to meet the requirements without bankrupting yourself. Understand what you are getting involved in before you make any commitments.
Barring the above, I do tend to side with the OP that it is time for a cultural shift away from college / university for the sake of college / university. I know of a lot of people who really valued "the experience", and felt like they found themselves and made valuable networking connections etc. and value those things above the diploma itself. None of that is a bad thing, but ask yourself what kind of dollar amount you are willing to pay for that. Don't assume that you will be resigned to living under the poverty line if you don't pursue that.
I am undoubtedly biased because I have enjoyed a 25 year career in software engineering and this is a niche field where we see tons of self-taught engineers who, in many cases, have a higher work ethic and measurable productive output than their college educated peers. I don't pretend for a second that that can transfer to every other field.
But does that mean the idea transfers to zero other fields?
You don't have to disvalue higher education to question whether or not traditional formal institutions are providing the value that they promise, or to seek alternative ways of achieving that higher education.
We need to stop making it seem like the "college experience" is worth gobs of student loan debt.
I think #2 is made worse because it tends to be young journalists writing those stories from places like Brooklyn after having graduated from a journalism masters program at NYU or Columbia. Yeah, they’re going to have lots of student debt, high living costs, and low-ish income, and their reporting is going to reflect that.
What I have noticed is that "entrepreneur" in the age of social media has become almost synonymous with scams—doubly so among those without a college degree. I can't even avoid it. Every time I open Facebook or Instagram, every 3rd or 5th post is some kind of scam. The vast majority or reels are scams. People aren't aspiring to be landscapers or start real businesses and a lot of people don't even know the difference between a real business and some kind of scam that they saw on TikTok.
Higher education also doesn't have to be expensive. It can be as expensive as you want it to be, even today. You can get a great education from a state school. You can even offload the first two years to community college if you really want to save money.
I work for an employer because I don’t want to spend time running a business. It’s just not worth it for a lot of us. I don’t even ever want to be a manager.
I’d rather just put in my 40 hours as an individual contributor and then have the remainder of my time to do whatever I need/want.
I always see people talking about how brilliant it is to run your own business / be your own boss, but I think there's immense value in just finishing and going home at the end of the day.
I say this as a director of a SaaS company...
If you think like a corporate slave, that is what you will always be --- looking forward to the next layoff.
One of my neighbors runs a landscape business --- no college dregree. He has 8 crews and a manager. I'll bet he makes more than you and spends less time doing it.
He works about 3 hours a day --- which mostly involves riding around to make sure the work is getting done as he talks to clients on phone.
No, it hasn’t, as evidenced by the research on pay differentials.
> Instead, orient them toward entrepreneurism. A business as simple as landscaping or construction can be just as financially rewarding as being a corporate desk jockey ... and even more so in some cases.
Entrepreneurship requires capital, and also has a high failure rate; a business of those types can also lead to failure, a worse than starting position, and being back to being a worker in those industries.
If you actually ran a small business, you would understand that small businesses are exempted from many of these regulations.
For example, Title VII of the Civil Rights Act of 1964 doesn't apply until your business has more than 15 employees. Insider trick --- start multiple small companies to avoid many of these sort of regulations.
health care costs will cut your take home by 1/3.
If this is true, you really aren't very successful. Also, health care costs are a deductible business expense.
Sure, that's totally not gonna be another gold rush / pyramid scheme like the student loans were.
Going forward though, I think the combination of AI and extreme degree dilution (everybody has a degree) are going to absolutely railroad a bunch of gen-z kids down the line.
https://news.ycombinator.com/item?id=36934135
Yesterday this was posted with a lot of commenters agreeing that management wasn't for them. With that in mind, I think presenting "entrepreneurism" as a lucrative and rewarding career is misleading. Many people wouldn't enjoy it, many people wouldn't be good at it, many people will not be successful at it - particularly long term. Entrepreneurs will not have easy access to 401ks and ( in the US ) health insurance.
> landscaping or construction
It is interesting to me how many promoters of blues collar careers overlook these industries historic hostility to female collogues. Women have been doing better in college lately than men, so maybe the assumption is that men will forgo college in droves for these sort of trade careers leaving all the white collar jobs to women. It's a plausible outcome.
For example, people talk about "landscaping or construction" and other trades but don't consider that working as e.g. an economist has a longer expected career longevity than working in construction.
Also remember that the point of college is to broadly educate the individual, not to be a jobs program. That said, there's no reason a college graduate can't start and grow a construction business. A person who makes $200k at a data science job is in some ways better positioned to start a construction business, because they have the ability to accumulate some capital.
The key word is "can". About 20% of businesses will fail in a year; about half will fail in five [1]. That means that unless everyone is a serial entrepreneur, most entrepreneurs will still end up needing to work a "traditional" job for most of their careers.
Well, the CS degree I got in the UK in the 1980s cost me literally nothing - no fees and a full grant for living expenses (which I added to by working in the summer breaks).
Given the amount of tax I've paid, that was an excellent investment by the UK taxpayer!
This is not what I would be looking for in a partner. If you brazenly break contracts you willingly entered one day what’s to make anyone believe their contract with you is nonnegotiable.
The denial of emotional toll here is shocking. She has limited her options to decades of a) un-remunerated childcare or (and?) b) being a tax resister.
To drive this home:
* imagine the difficulty of "changing jobs" in either scenario. Especially if you have an abusive boss.
* imagine four years living with your parents, trading chores for ability to work and pay off debt. That's less of an emotional toll because at least there'd be an end-date.
~200k in student debt or other debt? My understanding is that most student debt in the US is non-dischargeable in bankruptcy, so defaulting and destroying your credit doesn't do you that much good.
Also if it's student debt, seems like a bad plan to incur it in the first place if the plan is not to work.
If it's not student debt, then I don't see how it is particularly relevant to the conversation here.
With recent changes to the income-based repayment terms on federal loans, and if, like the vast majority of loan-dependent students those are your only loans, its pretty close (and, at worst, if yo can’t the repayment won’t cost anything.)
There's more value in finishing and going home by noon --- or not even leaving the house at all if you don't feel like it.
I know people without a college degree who do this and make very good money.
This is the one thing we agree with. Now, I don't know the true solution here, but I will admit that even if I didn't end up in my degree's career that college was at least a good stepping stone to learning how to learn. I simply approach stuff differently in college compared to high school.
Maybe that speaks to how ill high school prepares students for the real world, but at the same time it isn't exactly wise to go 0-100 in living in a parent's supervision to trying to make a living at 18 year old with nothing to your name but a high school diploma. Not even direction in life, for some people. I feel we need some intermediary here where you can break off into independence without also worrying about next month's rent when the month prior you weren't even allowed to consent to many life factors.
And I say this with a family history where my parents, and their siblings were all more or less kicked out at 18 to join the military. Don't know if THAT is the path I'd recommend to the current youth either.
Come on. Did you even read my comment that you replied to? I said point them "towards a decent but unprestigious state school," that is not "some diploma mill ... [that will leave them] saddled with debt."
> Student loan debt is approaching $2 trillion with over 22 million borrowers. Everybody and his brother has bought a degree which makes one not all that special in the current economy.
What you don't seem to understand that "everybody has it" != no longer needed. It just means that it's table stakes instead of a guarantee of success.
That's a very good point. Our perception is significantly influenced by the biases of the people whose jobs are to give us things to attend to. That can inflate the obsessions of those people way out of proportion to their objective size.
A lot of people will judge you for not having a college degree, and choosing not to get one will put you in a position of either having to just accept that or work harder to prove yourself (and you may not even be given that chance).
Also choosing to forsake a degree just plain blocks off a lot of paths. Say, in your late 20s, you decide landscaping ain't for you, and you want to become a doctor. If you never bothered to get an undergrad degree because if some impression that the direct value wasn't worth it (e.g. I don't need those "networking connections"), making the switch got a lot harder: you're going to start from square one, at a life stage where that will be more difficult. If you already have a degree, you can get in the position to take the MCATs and by rocking a semester and change worth of basic science classes. Landscaper -> doctor is a pretty extreme example, but the same situation applies to other areas. I know developers who switched careers from other fields. I don't think they'd have been given the chance if they went high school -> landscaping -> coding bootcamp. Even (early in my career), I knew one developer (who was pretty good), but only had a 2 year associates degree, and the fact that he lacked a 4 year degree hobbled him in many ways.
I did account for that. I said that I think it is time for a "cultural shift." That social status and flexibility element exists because of cultural attitudes and assumptions as to the value of a degree.
> Also choosing to forsake a degree just plain blocks off a lot of paths.
Not to get too philosophical, but every single decision you ever make in your entire life is going to "block off paths." If I eat pizza tonight, I am working against my weight management goals. If I dedicate my time and my life to learning to code, I am not using that time to learn medicine.
If you decide you want to go down a new path, then of course starting from scratch is going to take longer. But that is true of literally any endeavour. To me it does not make any sense to start putting in the time, money and energy into a venture in order to get yourself a "head start" down a path that you may never choose to walk down. Life is way too short to make that kind of a gamble unless you KNOW that there is an excellent chance you may want to pursue that. If you think that right now, at this stage in life, there is a 10% chance that you might want to pursue a profession that requires a degree at some point in the future, why invest 4 years of your life and an entire house worth of future income? If, however, there is a 60% chance ... then the value prospect looks quite different.
As someone else said, it is a lot to ask of a 17, 18, 19 year-old to make these kinds of major life decisions. But I think that's an argument in favour of a culture shift. If you choose to spend 4 years and a ton of money you don't have pursuing a particular education path, that is time and money that you will never get back. Only the individual can decide if that was time and money well invested.
So, what if you want to switch from landscaper to doctor? Well, what if you invest 10 years and a ridiculous amount of money into becoming a doctor only to realize that you hate it, made a mistake but need to figure out how to pay off $200k in student debt before you can even begin to entertain a career change? That's one hell of a "blocking off paths" scenario as well. Crippling debt and an unused piece of paper to show for it can be devastating in terms of closed doors. Imagine what you could accomplish in your mid 20's if you're debt free and are pursuing your passions regardless of how other people think you should be living your life?
Who knew that major life decisions could be so complicated?
Your asking 16, 17 and 18 year olds without any life experience outside of high school to do that though.
It’s fine if you’re neighbor makes more than me. I bet I have other neighbors that make more than me too.
I bet your neighbor didn’t just decide to own a landscaping business and went straight to his 3 hour days with 8 crews.
Guess what- I worked for myself for 7 years. I had some good times.
I like my “corporate slave” job better. I work when I want and where I want. It doesn’t even have to be 40hrs.
I don’t really deal with customers or deadlines, or making sure other people do their job.
I’m not worried about layoffs. And I’m not wishing for one so I can escape. My boss is the shit. The people high up know me by reputation. They don’t want to lose me. They know I could easily be working for a competitor.
So, what else is wrong with me preferring an employer over working for myself?
I’m really curious how this works, there’s dozens of existing landscaping business near me already established with connections and business relationships who do pretty well. How do you get into such a saturated market?
The same way you get into a market saturated with college degrees.
My neighbor started doing yard work as a teenager in his neighborhood. I'm sure he was initially cheaper than the competition --- just like kids coming out of college.
He was making money for years while his college bound friends were saddling themselves with debt. With some hard work and personal initiative, he gradually moved up and now he no longer does "yard work" --- he hires others to do the work for him.
I am in position where I would be able to pay that amount down (averaged over 10y) with the same QoL; however I do not have a degree and I live in Europe which pays significantly under what the US does.
People keep forgetting that we (and OP) got obscenely lucky in our industry. We are very well compensated compared to our contemporaries; but if anything it's proof that you don't need a degree, and that shouldn't be the litmus for getting a decently paid job.
A degree in of itself should not be held to such vocational standards, it has significant merit but has very little bearing on job performance- We should be working to make college/university affordable because a better educated population helps society.
However, it is far from a great indicator of earning potential.
The largest factors in earning potential remain to be: historical wealth and IQ; degrees, when controlled for familial wealth have shockingly low correlation to lifetime earning potential.
Bully for you! You are an outlier. Your employer may also be an outlier. That's wonderful for you, but it is irresponsible to recommend to any young person that they bet their futures on being able to 1) find 2) when they are hiring 3) and click with the hiring manager an outlier firm like yours.
> it's proof that you don't need a degree.
To do the job, no. To get the job, frequently yes. Obviously a lot of us were shipping production code in high school. Doesn't matter to most employers. For better or worse, having a degree is a required/recommended credential at a lot of jobs. Recruiters will often use it as a filter if they get a ton of resumes. Worse -- not having a degree is also a prohibition to some promotions at some employers so there are potentially follow-on effects of not getting the diploma.
Having been in the industry a while, I can say that the last 10 years or so are aberrant in that recruiters have been less selective than at other times. One definitely didn't want to be in tech in 2001 with no degree and a mortgage.
And speaking of 2001, one of the other benefits of having a degree is you're not as locked into a given career. When the dot.com bust hit tech, I saw folks use the flexibility afforded by their degrees to go into other fields: teaching, law school, etc.
I think you're suffering a bit from sunk cost fallacy and a little bit of "got mine", there's absolutely no reason to continue this.
I (and practically all of my friends) may be outliers, but if nothing else it's proof that you can do highly specialised jobs with vocational education.
As mentioned, higher education has massive value to society, but if it is product that forces you into a considerably unfavourable economic position from the beginning of your career, and certainly not as a gate for establishing yourself to employers -- that it has been used that way does not mean that it's a good idea.
There are many stupid things we do as a society, like changing our clocks backwards and forwards every year; the only reason it continues is inertia and our stubbornness to change.
The data don't bear this out. Over a career, people with college degrees earn more than those without. Until and unless this changes, people are making the right choice going to college.
Caveats: it does need to be more widely communicated that getting into a college that costs $50k/year is a luxury good that not everyone will be able to afford. And the corollary: we need to resume amply funding our public institutions.
So, for instance, how does a tradesman compare? The median income for somebody with a BS, employed full time, is $69k [1]. The median income for a plumber is $60k. [2] That's already pretty close, especially once you factor in 4 years of extra earnings vs 6 figures of debt. The BS may overcome the hole relatively late in their career, but again - it's close. However, there's a big catch: those numbers included STEM degrees. Remove STEM degrees and this isn't even close anymore.
I'm not arguing everybody should be a plumber, or anything of the sort. I am saying that college is a decision that should not be taken lightly, especially if somebody is not going to pursue STEM.
[1] - https://www.bls.gov/emp/chart-unemployment-earnings-educatio...
[2] - https://www.bls.gov/ooh/construction-and-extraction/plumbers...
I get what you're saying and I agree it's absurdly expensive for what you get. But even for the current college bubble, $200k is above the median students pay for college. The school's tuition currently is $51k, and for reference, MIT is 55k. Apparently the median is still absurdly high ($44k, what the actual hell?), but there are a lot of cheaper options, as well as community college, to help bring those costs down.
No, the youth I typically advise are from the types of backgrounds that need every advantage to get the good jobs. They don't "pattern match" the other staff, so they have to compensate by looking better on paper. I have 100% seen people walk into jobs without any credentials; I have not seen anyone do it who doesn't look like management.
> if you have to pay $200k to get your foot in the door then the system is rigged in favour of the elite (again).
Should have added that this number is also an outlier. OP possibly works on a team with people who were all-in for $60k over 4 years (in-state tuition, living at home). The giant public university in my city has an average cost after aid of under $20k annually (including room & board). Living at home, a student could make a dent in that working at an amusement park over the summer.
Some people choose a luxury experience, which is fine. But most students don't go to those colleges.
But yes, college is too expensive. We should resume amply funding state universities.
I know you're not arguing for everyone to become a plumber, so you should state that the chart you cite shows that high school diploma holders have a median income of $42k, or $27k less annually than those with a BS. Your data is showing why people go to college.
(All of this is before one accounts for the ability of BS-holders to move up to the higher rungs on the chart; most professional degrees require an undergraduate degree. If a 28-year-old has a BS and gets tired of his profession, he can go to e.g. law school or whatever and potentially earn more as well.)
Oh neat thing on the law school comment. You don't actually need to go to law school, or school at all, to become a lawyer in some states, including California! In California one "just" needs to go through a legal apprenticeship program, and then pass the Bar. Just is in quotes there for good reason, but I think the world, particularly in education, is changing far more rapidly than we realize. Especially given the era of the internet, costly accreditation as opposed to skill tests (ideally with some apprenticeship component), just doesn't make any sense anymore.
