Paying off $36,000 Student Loan Debt in Scranton, Pa.

 September 19, 2020
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Over the last several decades, the cost of education has gone up while wages have remained mostly the same. As students and families have had to take out bigger and bigger loans in order to afford a college education, many struggle to pay them off long after leaving campus. That’s why nearly 45 million Americans share over $1.64 trillion in student loan debt.

Where you live while you pay off your student debt can make a difference. Saving on monthly expenses like rent or mortgage payments might help you make bigger monthly payments on your student debt. Which brings us to Scranton, Pa.

Also known as the Electric City, Scranton is one of the fastest-growing cities for education debt. Borrowers there owed a median balance of roughly $22,000 at the end of 2019, an 18% increase over the year prior.

Here we talk to one local resident, Jess Meoni, a Scranton-based graphic designer who’s working on repaying $36,000-plus in debt.

Jess at a glance: By the numbers:
● Born and raised in Scranton
● First in her family to graduate college
● Earned two fine arts degrees from the city’s Marywood University
● Works as a graphic designer for a local bank
● Keys to repayment include side hustles, refinancing
Age: 30
Salary: $50,000
Original loan debt: $40,164
Current loan debt: $36,136.52
Monthly payment: $400
Monthly rent: $600

Do you like living in Scranton?

I do like living in Scranton. If you ask a lot of people around my age, they would probably give you a different answer. But I find it to be a nice middle ground between Philly and New York, and we have a lot going on here. I’m very involved in the art and music scene, and of course Scranton is known for “The Office” [television show].

What are your living costs like?

I live in an apartment. My living costs are anywhere from $1,500 to $2,000 per month, and that would include everything.

As far as living in Scranton, I wouldn’t compare it to New York or anything like that, but you could find a two-bedroom for maybe $700 [per roommate]. It obviously helps if you’re sharing the cost with a roommate.

Is your income enough to get by?

My current salary is around $50,000 a year. I feel fortunate to have gotten to this point.

When I was starting out in my adult job, I was happy to get $32,000 a year. I was like, ‘Wow, that’s amazing,’ until I started realizing I couldn’t pay my student loans, at least not paying them to the point that I was making a dent in them. But working now for a few years, I’m trying to build that experience up, and it’s helped.

Besides your full-time job, how do you come up with an extra $1,000 a month?

I have a side hustle where I’m screen printing and making accessories like stickers, especially since I’m so involved with the music scene here. There are always different people, especially musicians, looking for [promotional] merch: stickers, buttons, patches, T-shirts, you name it. I try to find freelance clients on the side, and that often helps bring in at least a little spending money.

Scranton is a tightknit and close town, and people really enjoy small businesses here. I think it’s really viable to start a small business, such as selling and manufacturing different items. It’s really encouraging in that aspect.

Notes on Jess Meoni’s $3,645 budget
● Meoni’s monthly take-home pay from her full-time job ($2,645) is supported by an average of $1,000 in side-hustle income per month.
● She is prioritizing her higher-interest credit card debt over her student loan payments until it’s paid off.
● Her minimum student loan payment due is $337.44, but she aims to submit $400 each month.
● Meoni’s high-utility costs include bills for water, electricity, heat, WiFi and cable.
● She no longer has a car payment, having recently retired a five-year, $11,000 auto loan.
● Whatever room is left in her monthly budget is dedicated toward her emergency fund or added to her retirement savings.

Does working at a bank help with your personal finance know-how?

I’ve always had some kind of knowledge about finances. My mom has worked in banking her whole life, but she never went to college. She just kind of worked her way up from a teller, since I was little, up to now where she manages a bank.

But I would say [my knowledge wasn’t] in-depth enough in relation to college and student loans. Honestly it wasn’t until about two years ago that I figured out principal, daily interest and things like that.

What was your attitude toward student loans when you borrowed them?

Just like many students, I was looking for the next step in life. I knew I wanted to go to college. I knew that I wanted more formal training in graphic design.

I was getting scholarships, but when you’re looking at it per semester, you swallow the idea that this is just an investment in your future and this is what school has to cost. So I put that in the back of my mind and said, ‘Well, one day, if I work hard, I’ll get a job and I’ll pay all this off’ not really realizing six months after – [after] that grace period – the bills do start coming in. And it’s a hit of reality. I wish that I had thought about it more seriously when I was 18.

You’re signing these promissory notes, and people really don’t read the fine print because it’s a serious thing. If you’re like me, your parents aren’t helping you with payments, so you’re on your own.

Do you have student debt of your own? Tell us your story!
“Paying Off” is a Student Loan Hero series featuring borrowers across the U.S. We hope these interviews inspire readers to accelerate their own education debt repayment. If you would like to be featured, complete our questionnaire here. We’re seeking individuals who are willing to let us into their repayment, detailing any challenges and their plans to overcome them.

After borrowing 11 federal student loans totaling more than $40,000, did your repayment get off to a good start?

I was making payments here and there to different providers and eventually wanted to get that under control, but it was very confusing. It took me a while to actually think about consolidating [my loans].

Right after I had graduated, I started working at the school where I attended for undergrad. I worked in the marketing department and taught at night. For the time, I was making decent money but not enough to make a real dent in my student loans. So, I was working toward the Public Service Loan Forgiveness (PSLF) program, [but] I felt iffy about the [120-payment requirement]. You have to stay in the nonprofit sector for 10 years. After working there for five years, I hadn’t gotten much of a raise, and I knew I had to do something about it.

How did you balance pursuing forgiveness with consolidating?

I really was unsure about taking my loans out of the hands of the federal government because I wouldn’t get [access to] those programs. I was scared about that.

On the other hand, I’m not certain if I’ve heard many success stories come out of that (PSLF) program – I’ve heard a lot of stories of it not happening, with the rest of their loans not forgiven. So personally, just for me, I didn’t know if I could take that chance and try to stay in this job.

Where Scranton’s student loan debt ranks among 100 cities

Student Loan Hero

Ultimately, refinancing stripped your federal loans of those protections — was it worth it?

I ended up refinancing with SoFi twice. The first time, I bit off more than I could chew because I decided to take [on] monthly payments that were well-exceeding my ability to pay. I was essentially putting all I could into these payments. It was $800 a month for student loans, and I couldn’t reasonably do that with all my other expenses.

I talked with somebody at SoFi, and they actually said, “You could refinance with us again and try for [a longer repayment term].” So now it’s a 15-year term, but I really do feel motivated that I can get it done earlier than that.

I’m so happy that I was able to [refinance a second time] because now it actually feels like the end is in sight, and you can actually see the light at the end of the tunnel.

How long is that tunnel? When will you be student debt-free?

I’m hoping it’ll be five years from now – I’m trying to be a little bit reasonable.

The education behind it is really what’s motivated me because when these terms and ideas are so abstract that people can’t grasp, they can’t physically get a grasp on their debt in any form, whether it’s student loans or whatnot.

It’s really easy to get stressed out about this because it’s such a big part of young people’s lives when they feel like they can’t truly begin their life because there’s this giant weight on their shoulders.

What’s your advice to your fellow student loan borrowers, in Scranton and beyond?

Don’t let student debt consume your entire life. It’s a reality we have to face, but we also have to enjoy our lives at the same time.

3 more student loan repayment strategies from Meoni
  1. Learn the ins and outs of student loan terms: “That will demystify a lot of the overwhelming feelings and [uncover] more options than you may be thinking of.” You might compare Direct Loan Consolidation and private loan refinancing, for example.
  2. Avoid student loans for your second degree, as Meoni did for her master of fine arts degree: “Try to look for tuition benefits if you can work at the school.” You might also find scholarships from companies that don’t require employment.
  3. Whether working as designer, event organizer, or more recently as a Shipt Shopper, side hustles are crucial to her debt repayment: “To really do something about [debt], you need to put the pedal to the metal and you need to find other sources of income.”

This interview has been edited for length and clarity.