laovnai: Debtors bear the burden of student loans years later

Saddled with student loan debt, many college graduates stare at their statements and see eye-popping dollar figures. To wit:

Carin Kilby Clark owes $140,000 for a bachelor?s degree and an MBA from Strayer University. She?s now studying for a master?s degree in project management from Walden University, in addition working full time as a U.S. Treasury Department analyst.

?I wonder whether my education is truly worthy of this large investment,? the 33-year-old South Riding, Va., resident says.

Therese Harvey, a 24-year-old screenwriting hopeful and barista in Los Angeles, is on the hook for $67,000 for two degrees from Fairleigh Dickinson she doesn?t ?officially? have yet.

?My loans are a constant weight, a stagnant, hampering reality even in my happiest weeks,? says Harvey, who couldn?t finish school because she couldn?t afford to pay $5,000 toward her costs during her last year. ?I get [collection] calls about them daily?swiping my phone open to hit ?decline? on calls has become impressively instinctual.?

David J. Kozlowski, an attorney in Manhattan, has paid down his $130,000 tab but still owes $60,000 for law school tuition at St. John?s.

?I could not have afforded college or law school without student loans,? Kozlowski says. ?My gamble paid off, but student loans can trap the unwary. I've been fortunate; but don't make my mistake.?

Clark, Harvey and Kozlowski are among the nearly 39 million Americans who lug the $1 trillion that debtors now collectively owe?figures the Federal Reserve Bank of New York published in its 2012 fourth-quarter report. In their first-person stories they wrote for Yahoo News this month?part of our ?Generation I.O.U.? series?they not only tallied their monthly payments, they also shared glimpses of how debt has altered their day-to-day lives, careers, relationships and outlooks on their financial futures.

Many borrowers say they experience interest-rate-induced anxiety (?I am terrified about my student loan debt,? says Leigh Clay, who owes $40,000 after graduating from Florida Atlantic University this month), while others are unemotional about their debt: ?Students like me must take responsibility and realize that it is not play money; after all the fun is over, the money has to be paid back,? says Jacob Long, who will face $27,000 in loan debt when he graduates next year from Rhodes College in Memphis, Tenn.

Read more stories in our student loan section.

?I had bought the lie?

Some who wrote stories regard their debt primarily in metaphors, not dollar signs. To them, student loans are a necessary evil, a ?frenemy,? a catch-22, the closest thing to the devil and modern-day slavery.

Aaron U. Bolin offers another analogy, that of Sisyphus rolling his boulder up the hill, only to watch it roll back down. It?s 21st-century Greek tragedy, debt-style:

?I am in my late 30s now. I deferred my loan payments until finishing a graduate degree in 2002. I have been paying Sallie Mae ever since. The funny thing is that I owed Sallie Mae around $50,000 nine years ago. After making more than 100 consecutive monthly payments, I still owe Sallie Mae around $50,000,? says Bolin, who finished his doctoral work in industrial organizational psychology at Northern Illinois University in 2002 and has paid since 1996 to Sallie Mae, a private loan originator.

?In my mind, the check I write each month as a student loan payment goes to pay for a really nice luxury car,? he says. ?I never get to see the car or drive it, though, because a mid-level Sallie Mae executive drives it back and forth to his country club to play golf with an administrator from my college.?

Bolin feels hoodwinked by what he dubs a lie: that those who earn the college sheepskin will undoubtedly outearn their high-school-educated peers. When he graduated from Rockford College in Illinois in 1996 with a degree in psychology, he discovered starting salaries paid only about $11 an hour, compared with the $8 to $10 that those without degrees earned.

?I entered the job market with high expectations,? Bolin says. ?I had bought the lie. I was a mark, I was a sucker, and now I was a slave to Sallie Mae.?

He recalls a 1992 high school classroom lecture in which ?Mr. So-and-So had been brought in to hammer home the lie with a slick presentation. Mr. So-and-So capped his presentation with a glorious statistical fact: People with college degrees make up the gap in earnings for the time they spent in school in an average of five years and earn more than a million additional dollars in cumulative lifetime earnings [compared with] people with only a high school diploma.?

Depending on the stats you unearth, that isn?t necessarily false, but it is possibly misleading. According to Census Bureau statistics released in 2012, graduates with bachelor?s degrees make about 75 percent more than those with only high school diplomas. Workers with advanced college degrees earn roughly 175 percent more. But a deeper dive, at least anecdotally, into our graduates? stories shows it depends on the degree. Those who earned a psychology degree like Bolin said their career and earning prospects were essentially nil.

Now colleges are bombarding his 16-year-old daughter with marketing mailers, and he?s wary.

?I am grateful for my education, but the true cost of financing it was intentionally hidden from me,? Bolin says. ?My college and the student loan company conspired together in a predatory lending partnership. They said, 'Sign here and you will be rich.? As any 18- to 22-year-old kid would, I believed them and signed.?

Trading one mound of debt for another

?I panicked, and my stomach knotted like a fishnet.?

That was Kate Hula?s reaction when she opened her first college loan statement in 2006.

?Wham!? she recalls. ?I owed $36,000-plus. And that was for the modestly priced University of Nebraska-Kearney.? Thirty-six grand, Hula says, was a lot to a 23-year-old working, middle-class graduate with degrees in journalism and advertising.

?My loans were three times as much as my dinky Chevy Aveo,? she says.

Broke and unable to cover even the cheapest payment?despite holding two jobs?she deferred her loans for one year. Then came embarrassment, she says, and a confession to her "displeased" parents.

?They verbally and aggressively broke down the numbers,? Hula says. ?One year of not paying meant that interest monster continued to grow at a rapid rate.?

She buckled down, she says, and landed work that paid as much as her two jobs combined. Six years and some double payments later, she now owes $26,000.

But, to massage the old saying: Debt closes a door when you open a window. She and her husband are now paying off his six-figure debt from pharmacy school loans.

?My measly [loan] wasn't so bad compared to his,? Hula says. ?Education is priceless, debt is endless. At least for another 20 years.?

Second-guessing a decision to take on loans

Jana Baldwin?s journey to the bachelor?s degree she obtained on May 10 began nearly 17 years ago, in fall 1996, when she went to Louisiana State University for two semesters and then Northwestern State University of Louisiana for two and a half years.

In the interim, she moved, traveled, met a Marine, got married and had three daughters all while paying down $10,000 in loans. She re-enrolled at NSU in spring 2010 and graduated with a degree in health and exercise science.

?But now comes the hard part,? Baldwin, of Campti, La., says. ?Finding a job in my chosen career field that will help me pay back $48,000 in student loans?including the interest.?

Managing that loan is compounding her family?s shaky finances, which include paying off a mortgage and a car note, while putting food on the table, gas in the car and clothes on her 5-, 7- and 11-year-old daughters. And she?s nervous about her husband?s job security at a nearby coal mine.

?I was happy about my decision to go back to school, but now I am dreading that decision due to the economy. I feel like I am going to fail even before I start,? she says.

Dead-end careers can complicate student loans

There is a particular irony in Collin D. Schuler?s story: Without failing a critical accounting class in 2010 at Eastern Washington University, he wouldn't understand the worrisome math of student loans. Because he didn?t pass the class, he had to wait two more quarters to retake it, which meant more school and more debt.

?It finally dawned on me that I wasn't taking my education and my student loans seriously,? Schuler, 24, of Spokane, Wash., says. ?Sure, I was an accounting major, which I thought was fairly serious, but I had only half the puzzle figured out. It's easy to say, ?I'll take out X amount of dollars and pay it all back later.? But the reality is debt can add up quickly in a very subtle way.?

He?s been aggressive in paying off his balance. In January 2012, Schuler owed $33,000; 18 months after graduating, he now owes $12,000. In addition to making debt repayment a priority, he advises would-be debtors to ?pick a degree that has substance.? (He eschewed history?what he wanted to study?for accounting and now works as an information technology auditor.)

More important, he continues: ?Think of student loans as an investment for your future and take ownership of that debt. It's no one's responsibility but yours.?

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