Well, now that reality has set in, you can see that you have indeed made something of yourself; you have become a debt slave. Not by being irresponsible by racking up huge shopping bills and buying expensive cars, mind you. But by being naïve enough to believe the lies. According to the apologists, it is entirely your fault that you did everything you were asked to do, and now find yourself in the situation you are in. And now YOU are the one stuck with the bill. Not quite the rosy picture painted by our policymakers, “educators,” parents, friends, and grade school teachers, is it?
I went to this online Financial Aid loan repayment calculator. My total student loan debt is $73K and my income is about $38,000. As far as I can tell, I am doing better financially than many law graduates from “lower first tier” and second tier schools, many of whom took out massive amounts of student loans for the "privilege" of attending law school. And a lot of those JDs cannot even find work.
Here is what came up when I entered my figures:
Wow! You're borrowing a lot of money to pay for your college education. Maybe you should think about attending a less expensive college? A good rule of thumb is that your total education debt should be less than your expected starting salary. If you borrow more than twice your expected starting salary you will find it extremely difficult to repay the debt. Live like a student while you are in school so you don't have to live like a student after you graduate. [Emphasis mine]
When did the financial aid office at your college, or your law school, EVER tell you that your total education debt SHOULD BE LESS THAN your expected annual starting salary?! In fact, most law schools provide their students with information from private lenders.
These results assume that the student is paying the interest charges on any unsubsidized loans and is not capitalizing the interest while in school. If the student is capitalizing the interest, the cumulative payments and total interest charges will be higher than shown here.
And how many students are paying the interest on their unsubsidized loans, while they are in school?
Note: I received a full-tuition scholarship to attend law school. I know people who borrowed the entire amount, i.e. for living expenses and tuition. I personally know people who borrowed in excess of $120,000 just to get a law degree from Third Tier Drake. And many are unemployed, working part-time, taking court-appointed work, or looking solely at non-legal positions.
If I were to pay off my student loans over a thirty-year period, I will have ended up paying $149,212.72. This means, I would end up paying $76,212.72 in interest – an amount greater than the entire principle!! If I pay them off in 20 years, I will have paid $120,517.41. Which means interest payments will have totaled $47,517.41.
Also, in order to pay this off in 20 years, it is estimated that my yearly salary will need to be $60,259.20. If I want to pay them off AND experience “some financial difficulty”, I will need an annual salary of $40,172.80. Who needs to buy a house or get married, when you already have a small mortgage, right?
It is estimated that you will need an annual salary of at least $60,259.20 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 1.2. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $40,172.80, but you may experience some financial difficulty. This corresponds to a debt-to-income ratio of 1.8.
My situation is not terrible or beyond repair. I post my story so others can see that going to law school is a poor decision for the vast majority of students. Remember, I only took out $37K to attend law school. What about those poor souls who take out $100K or $140K to go to law school? Sweet dreams, lemmings. When you wake up from your "American Dream," reality will be staring you squarely in the face.