Life with big student debt: tales from four college graduates

The cost of a college education in the US has soared in the past decade, rising much faster than inflation. The result: More students everywhere are borrowing – so much so that cumulative student loan debt now tops $1 trillion, more than American consumers owe on credit cards.

Two-thirds of today's college graduates have debt, and many now have monthly payments of $700 or more. How do they swing it? Here are the student debt stories of four people who graduated within the past 15 years.

1. Jenny Hetch

Graduated from Colgate University in 1996 and University of Michigan School of Social Work in 1999

Amount owed: $75,000+

Job: intervention specialist for at-risk high school students.

When Jenny Hecht finished her graduate degree in social work, she had nearly $50,000 in student loans. She paid for college and graduate school herself, but most of the debt is for graduate school.

"The University of Michigan was rated the No. 1 school in the country at the time, and I made an investment," Ms. Hecht says. "I didn't know that once I had my [master's degree] nobody would care where it was from."

Hecht expects to pay back the loans, but wishes she were allowed to refinance, as people can with other loans: She's stuck at 8.5 percent interest.

With a family, and a job that pays less than $40,000 a year, her payments haven't kept up with the interest on her debt, and her original loan is now more than $75,000.

"I don't want to sound like a victim, because I chose this career," Hecht says. "We live a modest lifestyle. We're able to pay our bills and stay afloat, except that this student loan debt is hanging over our heads always."

2. Ann Marie Gorden

Graduated from LaSalle University in 2009

Amount owed: $130,000+

Job: public relations

Unlike most student borrowers, Ann Marie Gorden got all her student loans in the private market through Sallie Mae. Only recently did she realize that interest rates on her loans vary – from 4.5 to 9.75 percent – and that nearly $64,000 of the debt charges interest of at least 8.375 percent. Ms. Gorden tried to consolidate at a lower rate but was denied.

In her first job, Gorden made $28,000 a year. She lived at home and went without health insurance so she could make her $700 loan payment each month, which covered just the interest.

Now she lives in Boston, makes $45,000, and pays $1,200 a month.

"At 18 years old, you don't really know what you're getting yourself into," says Gorden, who wishes more advice had been available then. "Those last two years, I was approved for over $60,000 – for a 20-year-old, without a cosigner, with no job, no sense of a future job – and they just gave it to me."

Still, Gorden would not trade her education at an expensive private school. "I could have gone to a state school," she says, "but the experience was so much different."

3. Christy Morley

Graduated from Rhode Island College in 2001

Amount owed: about $35,000

Job: high school chemistry teacher

Christy Morley chose a public college to try to keep costs down, but she still graduated with about $30,000 in debt. She took seven years to get her degree, in part due to the cost – but now realizes that may have hurt her because it delayed her career and meant she had to take out more loans to cover living expenses.

With a degree in chemistry, she was overqualified for lab jobs and underqualified for research work, so she went into teaching. Ms. Morley, who lives in North Carolina and now has two children, still hopes to get an advanced degree someday, but is daunted by the idea of taking on more loans. Today she owes about $5,000 more than she did when she graduated, due to a few years when she couldn't cover all of the interest payments.

One possible bright spot: She is about to finish her fifth year of teaching in a high-needs school as a highly qualified science teacher, which should entitle her to get $17,500 of her student debt forgiven.

4. Aaron Marks

Graduated from Carnegie Mellon University in 2012

Amount owed: $191,000

Job: marketing

When Aaron Marks was applying to colleges, he knew his parents couldn’t help him, but their income disqualified him for financial aid. In the end, Mr. Marks’s father, who runs a motorcycle dealership, took out most of the federal loans for his son.

But having the loans in his father’s name limits Marks’s options to reduce his payments if he’s ever out of work or to qualify for an income-based repayment program. Under the terms of the 30-year repayment program, Marks owes $1,300 a month – and that number will only get bigger over time.

“It’s very stressful,” he says. “I got myself into this situation; I made the decision to go to an elite school and took out loans.... But I think it’s good for people to be aware that you don’t think about how much it will add up.”

Marks, who studied business, took six years to graduate because he was working on an entrepreneurial venture. He is graduating with a good job, but his loans greatly influenced the sorts of jobs he considered.

He loved his years at Carnegie Mellon, but in hindsight he wonders whether his business degree will put him at enough of an advantage to justify all that debt.

“I kind of knew what was going on,” he says about his decision to borrow so much money. “But you don’t really think about what it actually means to have a house worth of debt, on a higher interest rate than a mortgage, until you’re getting close to graduating and thinking about having to repay them.”

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