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Home > Reader Questions > I Have an Advanced Degree. How Do I Deal With My Excessive Student Loans? – Zach

I Have an Advanced Degree. How Do I Deal With My Excessive Student Loans? – Zach

Just completed my doctoral degree and I have student loan debt in excess of 200K. I work for a non-for-profit organization working with the underserved and I make very little money, for now. My loans are due to begin repayment in a few months and I do not know where to start as far as what options are available to me. I know of the programs but one of the major problems is I have multiple lenders. I consolidated my loans a few years ago, per the recommendations of my school, as interest rates were going up substantially. Some of my loans, the primar lender would not allocate to the consolidation company (3.5% interest rate); next, a few years later my primary lender stopped providing graduate student loans and I had to use another primary lender. Therefore I have 3 primary lenders and this is a major problem going forward.

What type of counselling or financial advisement is available for recent graduates with advanced degrees and excessive student loans? Where do I start and who can help me by providing me with my options going forward?

Zach

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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Robertplattbell

    IN rare cases, part of student loans debts can be forgiven, if you can show that there is no way you will ever pay it off. But those are rare cases, and you have to go to court to get the debt reduced.

    The only thing I can say is that to anyone entering or in school, read this person’s posting carefully! I knew people in law school who borrowed a ton of money and lived the high life while in law school (for many graduate students, the amount lent is based less on need than ability to repay). After law school, they lived like paupers.

    Check out less expensive schools, too. George Mason has tuition 1/3 that of George Washington, for in-State residents, and both are good law schools.

    I worked my way through Engineering and Law School and still ended up with $30,000 in debt, which I thought I would never pay off, ever. But after a decade, I made the last payment, and it was a good feeling.

    But looking back, I realize that I didn’t “need” to borrow as much as a I did – I could have lived a more frugal life and borrowed only half as much – or none.

    I know this doesn’t help you, but to kids in school, READ THIS CAREFULLY! 18-year-olds just assume that “that other guy” (the 30-year-old them) will pay off those loans, not realizing they are the same person.

    Far too many people are graduating from school these days with over $100K in debt, and it need not be so. And because the student loan people hand out this “funny money” so freely, students no longer protest when tuition goes up at 2-3 times the rate of inflation.

    For many people, a college education is no longer a cost-effective proposition. $100,000 put into a 401(k) would be worth a million dollars by retirement. As your example illiustrates, that same money, “invested” in college, doesn’t pay back in terms of increased income.

    If I had it to do all over again, I’d be a plumber or electrician. High demand, high wages, and they are all on the golf course by 4:00 PM, while the young Law Associates are working until 9 at night so they can make partner and pay off their staggering student loan debt.

    FWIW…

  • Debt Whistleblower

    Zach,

    It’s noble to work for a non-profit, but as Steve stated, student loans are, indeed, the worst debt to have.

    I have a friend who attended Harvard Law. His school debts were over $200,000, as well. Instead of taking a $150,000 a year job out of school, which he was offered, he took a $35,000 a year position at a non-profit in a very expensive, large city. He continues to struggle EVERY day – and can’t afford to even go out to eat with his wife. At the rate he is going, that debt will remain in place for another 30+ years.

    You have to decide what is important to you: helping other people and struggling financially for a long time, or taking care of yourself financially so you can then give back in the future.

    It is a tough situation, and I wish you the best.

  • http://www.EliminateCreditDebt.com Debt Whistleblower

    Zach,

    It’s noble to work for a non-profit, but as Steve stated, student loans are, indeed, the worst debt to have.

    I have a friend who attended Harvard Law. His school debts were over $200,000, as well. Instead of taking a $150,000 a year job out of school, which he was offered, he took a $35,000 a year position at a non-profit in a very expensive, large city. He continues to struggle EVERY day – and can’t afford to even go out to eat with his wife. At the rate he is going, that debt will remain in place for another 30+ years.

    You have to decide what is important to you: helping other people and struggling financially for a long time, or taking care of yourself financially so you can then give back in the future.

    It is a tough situation, and I wish you the best.

    • Robertplattbell

      IN rare cases, part of student loans debts can be forgiven, if you can show that there is no way you will ever pay it off. But those are rare cases, and you have to go to court to get the debt reduced.

      The only thing I can say is that to anyone entering or in school, read this person’s posting carefully! I knew people in law school who borrowed a ton of money and lived the high life while in law school (for many graduate students, the amount lent is based less on need than ability to repay). After law school, they lived like paupers.

      Check out less expensive schools, too. George Mason has tuition 1/3 that of George Washington, for in-State residents, and both are good law schools.

      I worked my way through Engineering and Law School and still ended up with $30,000 in debt, which I thought I would never pay off, ever. But after a decade, I made the last payment, and it was a good feeling.

      But looking back, I realize that I didn’t “need” to borrow as much as a I did – I could have lived a more frugal life and borrowed only half as much – or none.

      I know this doesn’t help you, but to kids in school, READ THIS CAREFULLY! 18-year-olds just assume that “that other guy” (the 30-year-old them) will pay off those loans, not realizing they are the same person.

      Far too many people are graduating from school these days with over $100K in debt, and it need not be so. And because the student loan people hand out this “funny money” so freely, students no longer protest when tuition goes up at 2-3 times the rate of inflation.

      For many people, a college education is no longer a cost-effective proposition. $100,000 put into a 401(k) would be worth a million dollars by retirement. As your example illiustrates, that same money, “invested” in college, doesn’t pay back in terms of increased income.

      If I had it to do all over again, I’d be a plumber or electrician. High demand, high wages, and they are all on the golf course by 4:00 PM, while the young Law Associates are working until 9 at night so they can make partner and pay off their staggering student loan debt.

      FWIW…

  • Steve Rhode

    The CFP route can be problematic in a number of states. A CFP would need to be licensed as a budget planner or debt adjuster and is not exempt from regulation and cannot extend interest rate deductions as a credit counseling group like this one can. However, neither a credit counseling group not a certified financial planner can intervene to lower your student loan terms. You need to contact your lender directly.

    Additionally, if your loans are private student loans there are few good options. If they are government backed loans contact your loan servicer and ask about the Income Based Repayment Program to develop a repayment plan based on your income.

    The worst type of debt to owe is student loan debt.

  • James

    Hi Zach,

    First off, I want to congratulate you on your hard work and commend you for your humanitarian efforts by working for a non-profit. The reality is you chose to assume the cost of that debt for the benefit of your education. Then by working for a non-profit you’re electing to take a pay hit in your salary.

    I’ve worked on the cash flow for a lawyer client who is going the same route. He pays over $1k a month on his loans, and only makes $60k a year as a non-profit lawyer, but he is fine with the hit because to him its worth it.

    Your options are plain and simple:
    - Work for a for-profit to make more and pay MORE of your debt off now allowing you to pay LESS all-in-all. Then when financially comfortable move back to a non-profit.
    - Work out a payment plan with a certified financial planner or non-profit debt counselor to have a set amount to pay your creditors each month, while leaving you some room to save and invest for your future. (I do recommend a CFP over a non-profit debt counselor as they deal with the whole financial picture: family planning, retirement planning, and investments)
    - Dispute the debt. I’m not too informed in this area, but you can also counsel with a bankruptcy attorney to figure out what your options are.

    But first I just would recommend you to accept the debt for what it is, and continue doing what you are doing by gathering more information to make an informed decision.

    I wish you the best of luck!

    James
    Financial Planning Student

  • James

    Hi Zach,

    First off, I want to congratulate you on your hard work and commend you for your humanitarian efforts by working for a non-profit. The reality is you chose to assume the cost of that debt for the benefit of your education. Then by working for a non-profit you’re electing to take a pay hit in your salary.

    I’ve worked on the cash flow for a lawyer client who is going the same route. He pays over $1k a month on his loans, and only makes $60k a year as a non-profit lawyer, but he is fine with the hit because to him its worth it.

    Your options are plain and simple:
    - Work for a for-profit to make more and pay MORE of your debt off now allowing you to pay LESS all-in-all. Then when financially comfortable move back to a non-profit.
    - Work out a payment plan with a certified financial planner or non-profit debt counselor to have a set amount to pay your creditors each month, while leaving you some room to save and invest for your future. (I do recommend a CFP over a non-profit debt counselor as they deal with the whole financial picture: family planning, retirement planning, and investments)
    - Dispute the debt. I’m not too informed in this area, but you can also counsel with a bankruptcy attorney to figure out what your options are.

    But first I just would recommend you to accept the debt for what it is, and continue doing what you are doing by gathering more information to make an informed decision.

    I wish you the best of luck!

    James
    Financial Planning Student

    • http://GetOutOfDebt.org Steve Rhode

      The CFP route can be problematic in a number of states. A CFP would need to be licensed as a budget planner or debt adjuster and is not exempt from regulation and cannot extend interest rate deductions as a credit counseling group like this one can. However, neither a credit counseling group not a certified financial planner can intervene to lower your student loan terms. You need to contact your lender directly.

      Additionally, if your loans are private student loans there are few good options. If they are government backed loans contact your loan servicer and ask about the Income Based Repayment Program to develop a repayment plan based on your income.

      The worst type of debt to owe is student loan debt.

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