I could own one of these homes right now. I could have an adorable bungalow with a big front porch, porch swing and perfectly-mowed lawn. I could even add a picket fence, gardens, shutters and grand oaks.
I could have all that. But that’s not what I want. That was never my dream.
Instead of pursuing this, the penultimate American Dream we’re all taught to want, I chose to educate myself, and that might have been a terrible decision. Homes and land typically gain in value, build equity and become a part of one’s net worth, once they’re paid for. It’s something each post-World War II generation has aspired to. It’s an investment, a wealth-builder, and a statement to all that you’ve made it in the world.
Education is viewed as a pathway to wealth, but not necessary a wealth-builder in and of itself. It provides a foundation of knowledge, and is somewhat of a starting line. To obtain X, Y or Z, a degree is required. We’re all told that knowledge is power. But there’s a catch: it comes with a price. In fact, it can often come with a heftier price tag than most people’s first homes, especially if one chooses to attend a private university.
For a very long time, the United States has lagged behind almost every other industrialized nation in terms of educational achievement. Several factors are to blame, including plentiful manufacturing jobs that required little education, a culture that views education as an elitist, snobbish, out-of-touch endeavor, and a system that refuses to aid students and their families.
Countries like Denmark, Sweden, Norway and Germany offer free education for all residents (they even offer it to foreigners). Anyone can study at university if they want, regardless of their societal status or ability to pay. Students and professors are held to higher academic standards. Since they don’t have to work full- or part-time jobs while in school, students dedicate themselves to their studies, and many end up earning several degrees.
In the United States, there is no free education. Whereas people in those Scandinavian countries are encouraged to obtain multiple degrees to compete in the global workforce, in the United States, you’re lucky if you can obtain and pay for just one. Here, students compete for academic or performance-based scholarships, and then must figure out, mostly on their own, how to pay for the remaining balance. Unless their family is wealthy or they have a college savings fund, their only recourse is student loans.
Student loans come in just a couple forms. There are federal student loans, in which the student borrows money from the government, and private loans, in which students borrow from corporate banks and creditors. The former can be either subsidized or non-subsidized and generally offer low interest rates, but they are limited to families who fall within certain income levels. The latter is a cash cow for lenders who have only one interest: profits.
Because there is no free, universal education system in the United States, students graduate with exorbitant debts. According to the U.S. Department of Education, one quarter of students borrowed $30,526 or more in 2007-08, and one tenth borrowed $44,668 or more. Repayment on that debt begins within 6 months upon graduation, so it’s important that students find a high-paying job immediately upon commencement. If they can’t find a job, or find a job but not one that pays well, default becomes a real possibility. Who’s there to help when someone gets behind on payments, or doesn’t make enough money to pay in full each month (which is a certainty for those who work in non-profits)? Surely, there must be an organization that helps students figure out the best options, find a way forward when they get into trouble…
The sobering reality is that there is no support system for university graduates with student loan debts. Trust me, I’ve looked. There are many organizations out there to help consumers with bad credit card debts or who fall behind on their mortgages, but not on student loans. So, after investing four or five years of your life in improving your skills and gaining valuable knowledge, you’re left to fend for yourself against the tyrannical corporate hooligans that you’ll have to deal with for up to 20 years after graduation.
I graduated from the University of Tulsa with a Bachelor of Science in Business Administration, emphasis in Marketing. When I began as a freshman, I had won several scholarships, including the University’s Provost Scholarship, the Mabel Hildreth Crook Scholarship, an academic scholarship, a music scholarship, the Sam Walton Scholarship and the Oklahoma Heritage Association Scholarship. These scholarships covered a majority of the costs of tuition.
I lived at home and commuted each day, participating in marching band, Habitat for Humanity, the Student Senate, symphonic winds, basketball band and other organizations. After completing my sophomore year, I transfered to Marymount Manhattan College in New York City. When I discovered what a terrible school that was, I transfered back to the University of Tulsa before completing one semester at MMC. Upon returning, I was informed that I could not receive any of my previous scholarships or financial aid. I was determined to become the first person in my family to graduate with a college degree, so I began taking out private loans to cover the cost of school.
With the economic downturn of 2008, it became nearly impossible to get student loans. After several instances where my finishing school was in serious jeopardy, I was able to secure just enough funding and graduated in December, 2009. I was fortunate enough to secure a job before graduation at an environmental non-profit doing all aspects of marketing, advertising, communications, event planning, and graphic and web design.
I had done it. It was a dream come true.
By the numbers
Number of student loans? 13. Total student loan debt? $100,000. Most of the loans entered repayment after six months. One or two entered repayment at nine months. The final, and by far the largest, entered repayment at twelve months. That’s the one that broke my back. My monthly payments are now over $1100 a month. To put that into perspective, that’s more than my parents’ house payment. I bring in a mere $1780 per month after taxes and insurance, which means that 63% of my income goes straight to student loan payments. Add in rent ($495), utilities ($65), other installment payments ($40) and transportation ($50) and that leaves $27 per month to buy food, toiletries or other necessities. It’s an impossible financial situation. Of course I can’t eat on $27 per month. At my current income level, my basic, essential living expenses outweigh my income by around $300 a month. It’s not even living paycheck-to-paycheck. I can’t live this way. It’s not good for my emotional or physical well-being. And I know that I’m not the only person in this situation. I don’t want a handout. I don’t want my debt to be forgiven. I just want guidance, a way out, a compromise that will let me pay what I can and still be able to eat…
Why do it?
I live a modest but meaningful life. I don’t buy extravagant things (I don’t even buy “regular” things), I don’t take vacations, I don’t go out to bars or clubs… I volunteer, and work to improve the community and environment, I perform professional services as favors for friends, and try to ‘pay it forward’. What exactly has it gotten me? Good karma? Respect? A sense of self? A strong work ethic? Probably. But those things don’t pay the bills, and creditors simply do not care how much good you’ve done in the world.
My heart is in non-profits. It’s in helping people. The only problem with non-profits is that there’s no profit to be had. I’m proof of that. I’ve been told by someone that I shouldn’t be so “obsessed with money”. I’m not obsessed with making a million dollars, or having the biggest house or nicest car. I am only obsessed with money to the extent that I want to be able to pay my bills and buy food without inducing ulcers; to live without the pain and fear created by not even having enough money to pay for basic necessities. Anyone who considers that “obsessed” should take a long, hard look at themselves and their priorities. It is more painful than you can imagine. It is more emotionally disturbing than you can imagine. It is more heartbreaking than you can fathom. There’s a reason that financial problems are one of the main causes of depression, divorce and suicide: there is no safety net for those most at risk.
Where do I go from here?
When figuring out how you’re going to eat the next day is always top-of-mind, it’s hard to even begin picturing a way out. Your mind is focused on one thing. So how do I get myself out of this terrible situation? Should I look for a new job that pays more? Should I take on a second job at nights and weekends? Should I sell my belongings to make due in the short term? If I look for another job, should I look in another city, or another country? I don’t have any answers, just ulcers and a sleep problem. It’s not as easy as most people think. We’re living through a period of economic distress not seen by any generation since the Great Depression. Jobs are scarce, the deck is stacked, and banks are still the heartless, soulless machines they’ve always been.
Maybe I should’ve chosen to pursue the American Dream instead of trying to improve myself and the the world around me. So much for the old “knowledge is power” adage. “Scientia omnia vincit?” Not hardly. Not in America. The Scandinavian countries I mentioned earlier have it figured out: highly-educated people are valuable, and education should be something everyone has access to; not something they have to kill themselves working for.
Anyone out there with a panacea?