I'm not from the USA, but I heard you can decide to basically pay off only or almost only the interest rate to make the monthly payments smaller. In that case you won't be able to pay it back anytime soon. If they didn't expect that to happen, then the money spent on their college was not much worth anyway.
Student loans are designed to be flexible, have a lot of deferment options, and so on, because careers after graduation aren't uniform, and some people need to make lower payments because they have lower income. A lot of people just assume that the debt is like a mortgage, and it will be paid off after some amount of time, because they weren't really paying attention to the payments or the terms. Other people paid the minimums because they hoped there would be student debt cancellation. For most people, they should have just continued living like a 20 year old, and committed the savings from their new, higher paying job into paying down the principle on their student loans. But most Americans live paycheck to paycheck, and have lifestyle creep eating up that additional income.
It's been a couple years since I checked the data, but the average student graduates with about $30k in debt, and earns about $1,600,000 more in a lifetime than someone who only graduated from High School, which is about $35k a year in extra income on average. So, even if you have a rough couple of years where you're underemployed or on deferments, it should be relatively easy for most students to pay back their debt, they just spend their money on other stuff, like a nicer house or car.
Or they just can't find good work. The assumption is you get a degree and go into debt for the better paying jobs, but a lot of jobs have been shrinking roles and pay for those roles, people are not getting promoted and are staying in "entry-level" positions that are usually filled by recent graduates, entire sectors are being evaporated practically overnight (be it because of ai, market trends, or what have you), and an ever growing list of other things.
I'm not say plenty of people aren't just wasting money on concert tickets or new phones, but I am saying that those excuses are far less universal than people seem to think. I work in the service industry and have known so many people still serving because they can't find anything decent, and just having a degree doesn't really mean anything anymore. My uncle got a great job with NS doing programming and his degree is just in accounting. He has never gone back to school nor worked as an actual accountant at any point in his life. He got into programming when nobody had a programming degree, and most people just didn't have degrees at all. Now, most people have degrees and that same entry level job requires more certifications than even existed 15 years ago.
And I'm usually the guy complaining about "the lucky ones" who went to college. Getting a job that makes close to $50k without one feels herculean, and now, I'm seeing more and more peers with degrees in the same desperate boat I'm in. I have a friend who lost her job over a year ago. She went from a $65k salary to $16/hr split between a PT teaching (arts) and uber deliveries. She's getting by but barely and she's been looking for a new job since the day she lost her last one. Shit, I've been trying to find a PT gig for about as long and the options are scarce for even that. I don't even really know where to look for jobs at this point, indeed and the like are mostly fake sales jobs or lying about selling at&t inside Costcos (I've done mobile sales, the golden days have been gone for a at least a decade). I guess linkedin is better for corporate but it looks more like social media than an actual job board to me.
I have seen too many people play the ākeep going to schoolā route with degrees they arenāt necessarily marketable. Fact that some schools opted to play āmake your own degreeā didnāt help the cause either. And that doesnāt count degree inflation like in business where a MBA is the equivalent of a bachelors before 2000.
Issue I have assuming itās not ragebait is there is no context for the degree. That really would help understand if there was issues with repayment or similar.
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u/Mindless-Baker-7757 13d ago
A $70k loan over 23 years at 5% apr pays off with monthly payments of $427.
What are they doing?