Student Loan Problems: What I Wish I Knew Before Borrowing $81,000 for School


I’ve taken out a total of $81,000 in student loans to pay for my education: $23,000 for my bachelor’s degree and $58,000 for my master’s. By the time everything is paid off in the next year, I’ll have spent closer to $100,000 when factoring in eight years’ worth of interest.

It’s been a long journey and one that I’m excited to finish. People often ask me if I regret taking on so much debt to go to school and I don’t really have a good, simple answer. In some ways, yes I do regret it. In other ways, I don’t.

But there are a few things I wish I knew before taking on so much student debt. Specifically, my graduate school debt, which set me over the edge of a “manageable” debt load and into another stratosphere.

If you are thinking about taking on more debt to go to graduate school, consider these five things I wish I knew.

1. The Impact of PLUS Loan Interest Rates

I was fully aware of how much additional debt I was taking on to attend my dream school, NYU. But I didn’t quite understand the impact of my PLUS loan interest rates.

My undergraduate loans were locked in at a low rate of 2.3%. My graduate loans? They ranged from 6.8% to 7.9%.

It wasn’t until I graduated and started making payments on my student loans that I realized just how much I was paying in just interest. I did the math, and at its highest point, I was paying $11 per day in interest — over $300 per month.

I hadn’t really calculated how much interest I would pay over time in comparison to how much money I would actually make. After graduating, I struggled for a couple of years and didn’t make much more than $10 to $15 per hour in the nonprofit and arts sectors.

As a borrower, it’s important to do the math and truly understand how much you will pay in interest over time. It might be more than you thought.

2. Dream Schools Are Just a Dream

It’s not uncommon for people like me, who take on a large amount of debt to go to school, to be met with a certain amount of criticism. I was repeatedly asked why I didn’t go to a cheaper school.

My answer? I wanted to go to my dream school. My dream obviously came at a cost, but I was willing to pay the price. I was stubborn and no one could tell me not to pursue my dream. However, I realized the reality of attending my dream school wasn’t so dreamy after all. I got a lot out of my education at NYU, but it was a lot harder than I imagined.

Our judgement can be clouded by fantasy — we think a certain school can bring us legitimacy, talent, and clout. But in the end, it’s just a school. Consider carefully the cost of your dream school and what price you might pay many years down the road.

3. Geography Is a Major Factor

Moving to New York City to attend graduate school felt like the right decision at the time. I was majoring in an arts-based field and would be in the center of the action.

But a few months after graduation, I moved across the country to be with my partner in Portland, Oregon. I heard it was a creative city, but hadn’t anticipated how difficult it would be to find a job in the arts here.

Geography is an extremely important factor in your career and future earnings. Whether you decide to go to graduate school or not, consider how your location will affect your post-college career prospects.

Are there jobs in your field in the area? If not, will you move and to where? Will your new city have jobs available in your field? What is the average pay? Consider how the answers to these questions might affect your ability to repay your loans.

These are all things I wish I considered more carefully before attending graduate school and then moving away afterward. Though I moved for personal, rather than professional reasons, it had an impact on my professional life in terms of pay and work opportunities I was able to get in my new city.

4. Wage Stagnation

Before attending graduate school, I had only worked in the nonprofit sector and never made more than $38,000 a year. I thought going to graduate school was my gateway to a higher income.

I was sure that it would be easy to get a new job with bigger pay. But right after the heels of the recession, I graduated and found myself making less than I ever had — and not for lack of trying. Having an obscure arts degree and moving to a smaller city had a major impact on my wages.

Just because you get a graduate degree — in any field — doesn’t automatically mean you will make more money or get a better job. In fact, I found that some employers considered me overqualified and wouldn’t even interview me. If you’re thinking of going to graduate school, consider:

  • The difference between what you are making now and what you could make with a master’s or professional degree.
  • The unemployment rate in your city.
  • The job competition.
  • Whether your desired job actually requires an advanced degree? If not, you may be better off with an internship or networking with the right people.
  • The opportunity cost of being out of the workforce for several years. In other words, if you’re making $40,000 per year, you’d miss out on $80,000 in wages to pursue a two-year degree full-time. Will you make enough to cover the loss of those wages and pay off your debt?

5. Life After School

I was so singularly focused on going to my dream school that I didn’t really consider what life would be like after I graduated. I’d neglected to think about everything else in my life such as my relationship and passion for traveling.

Taking on so much debt didn’t seem like a big deal while I was in school. Once I was done and struggled to find a job, it stung. It affected other parts of my life, too.

If you’re considering going to graduate school, it’s key to consider what life will be like after you graduate. It’s hard to imagine and may seem a bit fuzzy, but think about what’s important to you and how an increased debt load will affect those areas of your life.

Taking on additional debt to go to graduate school is a personal decision. Before deciding either way, weigh the pros and cons. Think long-term, not only about your financial goals, but your life goals as well. You might find that the true cost of borrowing tens of thousands of dollars isn’t worth it.

Photo credit: Jeremy Jenum via Flickr Creative Commons

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Published in Budgeting, Continuing Education, Financial Goals

  • John Smith

    A degree in the arts is NOT a ticket to a high income and never has been. It would be far better if you were a working artist, creating art, since that just takes talent, not extra education. Barring that, try to become a dealer, since that’s where the real money in art is.

    • Thanks for your comment, John!

    • I have to agree that getting an education in what you “like” to do and then expect to be well paid for your ‘hobby’ is wishful thinking. If you want to make decent money, get a STEM degree in something that ‘interests’ you and then get paid to ‘work’ hard at your job. If it’s easy, fun, and everyone likes to do it – it won’t pay very much!

    • Homeless Harry

      I absolutely agree. Before you considered going to college you should have tried to sell art on a street corner somewhere. That’s how you make money while going to college requires you to part ways with your money.

      In most cases you can make things work without having a college degree. Ingenuity and resourcefulness is all that’s required; not an expensive piece of paper from someone who’s just trying to steal your money by convincing you a college degree is a prerequisite to success. This is what con artists and criminals do. They piss in your ear and tell you it’s raining for their own benefit.

  • Jim in Texas

    I have a daughter who is entering this morass. She has her sights set on Columbia and is willing to take on debt for the two years that we can’t afford. My older two sons got degrees from respectable universities nearer to home and neither are using their degree. We have raised a couple of generations of kids to think that a college degree is the be-all, end-all. In the 1970s, when I went to college, states bore this cost. I remember paying 200 dollars a semester for tuition. Degrees used to be about improving yourself, but when we started to tie them to potential earning power, the culture responded by making them expensive. It shouldn’t cost you a house to get a bachelors degree.

    • Thanks for commenting, Jim. We definitely agree that the cost of a college education is out of control. We hope there’s positive change in the future, but for now we’re doing all we can to help those stuck in debt.

      • Catsrat

        Student debt seems to be a relatively new – and horrible – concept. When I went to college 25 years ago, all funds were given, and no loans. Now it’s mainly loans and a little bit of Pell Grant, that doesn’t even cover tuition.

        JOBS in this country would be better yet. Because there is no more good easy-in employment any more is why I went back to college in the first place. If you need to pay the rent you must get the money from somewhere.

    • Marialice Barone

      There is some sort of scam going on, mainly more administrators than students! The best bang for your buck is two years Community College and than State U! Most people canT afford private schools. The other value is ROTC scholarships. You also have a guaranteed job at the end and if you get out after 4-5 years you will get snatched up by a good company My son-in-law and daughter both were Army Ctains and were hired by Johnson and Johnson and Pfizer. Some military scholarships pay better than others and sometimes you can even negotiate for free room and board with the accepting U. My Grandson is a Lt JG in the Navy and had a degree in rhetoric from the U of Texas. It.s a very difficult program because you have to take lots of math and science, but pays tuition,books and a monthly tax free stipend , the Army is less restrictive because they need a lot more Officers. The Merchant Marines, Coast Guard, Air Force also have the same programs. The other advantage is if you stay for 8 years instead of 4, the Service will pay for an advanced degree!
      Of course you have to serve in the Military but seems a small price to pay for the advantages one gets!

  • Bob G

    Got my BS degree from a local college. Found an entry level position with a local company. Worked my way up through the ranks. I have many great memories and am now happily retired. Never incurred the big debt that kids have now. And they expect to be hired on half way up the corporate ladder. Dream on kiddies. Over the years I watched many a young graduate come on board and demand the resect of a CEO. They never lasted long.

    • Homeless Harry

      We all know what the B.S. stands for. These days you have to be hired halfway up the corporate ladder just to make ends meet after going to college so it’s not surprising that many people have that expectation even though it isn’t realistic.

      • When I went to college, you had the “rich kids” whose parents paid their way so they didn’t have to work. Nice life, if you can get it. And then all the “others” who worked continuously (or part time) to get through. Now you have the “others” who never work a day in 4 years and live quite well off of student loans. Well, those 4 years aren’t going to come cheap (or free). Get a job. Work full time every summer – even if it means stretching your degree out another year, or so. Also, cut back – learn what the old phrase “starving student” is all about – or just enjoy the college experience and sink yourself into huge debt. Your choices – your consequences.

  • Robin Anders

    My daughter, 27 went to 2 modest Universities. We paid for undergrad. No debt for her there. She had to attend Grad school in order to become a School counselor – Masters required, certified, lisenced. $50,000 in grad school loans. She has been out 3 years. She has not gotten a job in her field as yet due to hiring practices in the school system. They must hire someone “in the system” over all applicants, also we live in a Huge military city and ant “transferred in” Military spouse gets jobs even over the “in the system” people. She has worked full time in the school district for the past 3 years, but as a permanent substitute or a long term “counseling sub” 3 mos stints. She gets no benefits, much lower salary and the student loans are killing her. She already lives with us to save money. Any suggestions? Thanks

  • Marialice Barone

    I am an Executive Recruiter and right now companies are not hiring candidates with Arts degrees. The referred degrees are Engineering, finance and Business. If the economy improves substantially,it will unleash a need for all degrees! Junior military officers. No matter what degree are still in demand

  • Hi Robin,

    Sorry to hear about this. Are these all or mostly federal student loans? If so, is she enrolled enrolled in income-driven repayment? You can learn more here:

    While this won’t help her pay off debt faster, this will help lower monthly payments in line with her income and make her potentially eligible for forgiveness.

    I hope this helps. Let me know if you have other questions.



  • Stenka Razin

    I have a son who went to a rinky dink, pay for play, profit motivated college. It was $36,000 for a 20 month program of which I paid $16,000. The rest were loans. Not one of his credits would ever transfer to any other school anywhere. But he majored in a hot field, Physical Therapist Assistant and his degree enabled him to sit for the PTA state boards and obtain a PTA license. He started at $50 k right out of school and eight months later he went to another compnay for $65k. After two years experience he is being recruited now by medical travel agencies begging him to take three month assignments at $45/hr with free apt. Paid by the company. no one has ever asked what school he went to, nor his grades.
    I got my liberal arts degree for ten dollars a credit in the 70’s. Fifteen years later, after being laid off on a regular basis, I did a two year RN degree at a state community college. Before retiring last year from the state as a Psych RN, a field to which most of us guys go, I was making $91k per year. Right now, at 65 yrs old, I am being begged to take a $38/hr pool position at a facility, where I can work whenever or however much I want. one or two days a week would be nice..if I feel like it.
    I have nearly 300 college credits if you include the nursing school. I made a living for 30 years off a two yr nursing associates. All my other credits you could throw in the garbage. I tell all kids today to not take a single college credit unless it’s gonna make you a buck. You can follow your dream and end up in a nightmarish hell of debt while underemployed. By the way, I never liked the nursing, ever. But my other jobs were often miserable too. so at least I made a good, steady living out of it. My son fortunately loves PTA.

  • Homeless Harry

    “People often ask me if I regret taking on so much debt to go to school and I don’t really have a good, simple answer. In some ways, yes I do regret it. In other ways, I don’t.”

    People often ask me the same thing and my response is usually “What do you think? I still work here, don’t I?”