The average amount of student debt in the US is $25,000 per borrower, but in the Guardian's growing student debt network the average graduate is struggling to pay back over twice that amount.
That reflects a growing trend in the country at large. To date, there are approximately 1.1 million people in the US who are saddled with student loans that have topped six figures.
"Student debt loads of $100,000, and $200,000 are becoming more common with unknown consequences for the individual debtors or the economy as a whole," said economic consulting firm NERA, in a recent report.
That doesn't count the psychological and practical cost of living with that debt. We wanted to know how living with $100,000 (and more) of debt affects the lives of the people trying to pay it back, so we reached out to our student network to find out.
They've had to put a lot on hold – buying houses, getting married, opening savings accounts – and many of them know they're a long way from ever paying it off. That said, they've also continued to work toward their goal of living debt-free.
Here are their stories:
I've put off seriously considering buying a house for a very, very long time.
Challenges: The biggest sacrifice I've made is moving in with my mother. Although there is a stigma attached to moving back home, the amount saved from not paying $600 a month or more on rent (money that I can put towards student loans and savings) is more than worth it. I've also put off seriously considering buying a house for a very, very long time.
Tips and tactics: I've made a point to keep a pretty thorough budget. I try to set my expenses so that I have a decent cushion to put towards my student loans and to my savings and retirement. I am fortunate enough not to have any consumer debt at the time being.
NEVER sacrifice your loan payments
Challenges: For a while I was only making an entry-level salary of $32,000/year, which is roughly $1,900/month after taxes. With 50% of my paycheck going to student loans I had to take on a second job and clocked 80 hours per week for over a year.
I regularly have to choose between fixing my old beater car, paying my health insurance or making my loan payments. I live with several roommates and buy my groceries at Walmart. I can't afford a gym membership. I know I will never be able to buy a new car or a house within my adult life, a fact that makes me regret going to college as a whole.
Tips: First, NEVER sacrifice your loan payment. The utility company will work with you, there's always the bus when your car isn't starting, but missing a loan payment balloons into a nightmare. Don't skip it. Swallow your pride, get a second job delivering pizza or working as a waitress. It occupies your time and earns you your grocery bills. Investigate donating plasma – most places pay about $200/month. As basic as it sounds, learn to cook and cook in bulk.
If you have a friend with a Costco membership, tag along and stock up on essentials like pasta and frozen chicken breasts. Freeze the leftovers. Above all, do whatever you need to to keep the stress, anger and shame from eating you alive … exercise regularly, talk with your parents, explore the free fun events in your town. Determination and a positive attitude will be your greatest assets in those moments when your diploma looks like the most soul-crushing object you ever obtained.
I can't save any money, and it makes me worry about the future.
Challenges: I made a lot of sacrifices while getting my MA at Georgetown. I skimped on everything including food to try and reduce the amount of debt I had to take on. So for me, the challenges started before I even graduated. Now, I find breakfast is a rare sandwich off the dollar menu at McDonald's, and lunch is something similar if I can afford it at all.
I'm lucky in a lot of ways, I have a job and an apartment which is more than most of my peers can say, but I'd like to get married to my girlfriend of the last five years, and that's probably the biggest thing I've had to put on hold. At the end of the day I can't save any money, and it makes me worry about the future.
Tips and tactics: I recently applied for the new Income Based Repayment (IBR) scheme and I'm hopeful that will lower my payments to a more manageable $115/month. Another good part of this program is that they will forgive the remainder of the balance after 20-25 years so long as you have made all of the payments. However, they do charge the remainder against your taxes, so its more a long-term Band-aid than a real solution.
My balance continues to rise because I can only afford to pay the minimum
Challenges: I have three non consolidated student loans that require simultaneous repayment: a Federal Direct loan ($65,000) at 3.65% interest, a private no-interest loan I received as a scholarship ($30,000) and a Sallie Mae loan ($20,000) with a whopping interest rate of prime + 6% (currently 9.25%); this last loan is really a thinly veiled high interest credit card for desperate students.
I accepted the Sallie Mae loan in my third year of veterinary school out of desperation, as the federal loan program would not allow me to take out any additional loan money, but I still needed to pay the bills. With such a high interest rate and paying all loans simultaneously, 25% of my take-home pay per month is the minimum I am required to pay in loans per month over 30 years. My Sallie Mae balance continues to rise ahead of the payments I make because I can only afford the minimum payments.
At five years out of school I have reached the income ceiling for my profession without owning my own practice, with no chance of being able to build toward a sustainable future, let alone any chance of eventually owning my own business. This is a common problem in the veterinary field, and a large reason why corporations are the only entities left that can afford to buy veterinary practices as the baby boomers move towards retirement.
Tips: We have cut out many luxuries (no cable, no smartphones, no dining out, no fancy coffee drinks, no vacations except by car). We buy only basic, nonprepared foods to cook and can at home (dried grains, beans, fresh seasonal veggies at the farmer's market, occasional meat in bulk from the local butcher). We only buy clothes from second-hand stores, and only buy things we need from estate sales/garage sales. We don't use credit cards. We share a car and take public transit when possible to save on gas. We sublease our basement for extra income. We are hoping to collect enough money to buy a small house where we can convert a detached garage into a separate small living space to rent out as well.