There was a time not so long ago when many parents wanted their children to become lawyers or doctors because of the prestige and high salaries those positions garnered. We still often think of lawyers or doctors being wealthy, but behind the scenes, there can be a dramatically different story. There can be a high price to a professional degree. Read the following situations to see what I mean.
A Law School Drop Out
Scott is a 28 year old who just graduated with his M.A. in Political Science. Before enrolling in a M.A. program, he went to law school for 1.5 years. During that time, he acquired $48,000 worth of debt. Midway through the program, he decided he did not want to be a lawyer and quit law school. Of course, his debt followed him. He enrolled in the M.A. program and acquired another $12,000 in student loan debt. Now, he cannot find a job in his field. He is paying $469 a month toward his student loan debt; if he continues to pay at this rate, he will have the loans paid off in 30 years, when he is 58. He is lucky because he made it through his undergraduate degree with no debt.
Scott currently works part-time at night for UPS and lives at home rent free. He makes just enough to pay all of his bills and have $40 a week leftover. That $40 is for gas, spending, haircuts, etc. If he could not live at home, he would not be able to meet all of his expenses. He does freelance writing jobs on the side to supplement his income while he applies daily for jobs within his field.
A Law School Graduate
Scott has a friend, Jessica, who was enrolled in law school at the same time he was; she completed the program and passed the bar. She has since moved to South Carolina, taking her thousands of debt with her. She could not find a job at a law firm and finally took a job as a public defender making $30,000 a year. Her boyfriend moved with her, and they now live together. Without his contributions to the household, she would be unable to pay both rent and her student loan payments.
A Medical School Graduate
Mike just recently graduated from medical school. He is currently in a surgical internship and expects to remain in that position for five years. He makes $45,000 a year working 80 hour work weeks (he has determined he is making roughly $3 an hour); he has student loan debt of $238,000. After graduating from medical school before starting his residency, he took a trip to Poland and a trip to Florida. One would think he would try to conserve money, but at this point he feels numbed by the debt. He figures what is a little more debt on top of the debt he already has?
Many students willingly assume such a high debt load because they think they will start their careers making a decent salary that will only increase over time. They expect a six figure salary, which makes it easier to pay down student loan debt. However, in the current economy, many of them are having trouble finding jobs and the student loan debt often becomes an unbearable burden that cannot be discharged in bankruptcy.
When Scott was asked if he regretted attending law school, he said no. He learned a great deal personally during that time, and he also learned that he could work hard, harder than he has ever worked in his life. He plans to use that same determination to conquer his debt. He has been living frugally out of necessity. When he obtains a full-time job, he plans to continue living the same way and applying all of the extra money to his student loan debt.
Suggestions for Students with Debt
If you are attending a professional program, keep these suggestions in mind when managing your debt:
-Try to attend the school that offers the most in the way of financial aid that is NOT loan based.
-Live frugally when in school. Don’t spend money on a nice apartment and dinners out. You will just have to sacrifice further when you graduate and have to begin paying the loans.
-Monitor your debt. It is one thing to know that you will graduate with $60,000 worth of student loan debt. It is another to know that if you want to pay off the debt in 10 years (the standard repayment plan), you will need to pay $690 a month and will have paid $22,000 in interest over the life of the loan.
-Remember that you may have to take a low paying job initially, especially in this economy.
When you graduate, keep these suggestions in mind:
-You are NOT your debt. Many students rightly feel burdened by their debt and actually assume their debt as part of their identity. This only leads to stress, depression, and anxiety, all feelings which sabotage the job hunt.
-Focus on paying off the debt. While you don’t want to think about your student loan debt 24/7, you should focus on how to pay it off. Where can you cut corners to apply a bit more to the debt? Can you make extra money to apply on the loan?
-Delay making large purchases. You may want to buy a new car or even a home when you graduate with a professional degree, but often that will just increase your stress level as it will put you further in debt. Focus on managing your student loan debt before acquiring more debt.
Being an attorney or a doctor can be rewarding. Unfortunately, these professionals often begin their careers saddled in debt. While there may not be a way to avoid all of the debt, there are ways to limit the debt and to eliminate it in a more timely manner.