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My Education (Finance) Story

Photo from my B.A. graduation at the University of Montana

I am an American citizen, both of my parents earned graduate degrees, and I would first and foremost like to acknowledge the privilege and opportunity that these factors (among many) afford me. That being said, I am no stranger to student debt and the announcement of debt relief this week brought on a strong emotional response – I initially felt a mix of joy and FOMO as I realized that some of my borrowing and payback choices would limit the amount I’ll receive. But with some time to reflect and read through the details at  https://studentaid.gov/debt-relief-announcement/, I felt compelled to share my personal experience of financing higher education (HE).

This post is inspired by the courage of a Facebook friend (Andrea), who opened up about her personal education borrowing and debt experience. Reading through her experience at an emotional time offered me comfort in knowing I wasn’t alone in making tough financial decisions or feeling the impacts of student debt on personal finance/choices.

In my experience, sharing financial figures can be a bit out of the norm. Initially, I worried it would be an ‘over share’ to include loan amounts. I decided to include the real numbers in this post because the reality is that we all need to earn and spend to live today. I believe that disclosing earnings with peers will help create a necessary dialogue around responsible budgeting and aid in creating a more equitable financial world. I am embracing discomfort in the name of honesty and in hopes of finding comradery with others.

My Education/Finance Story

I began university a touch ahead of my peers (not because I was academically ahead, but because I was motivated to get out of high school early and HE was my ticket). This premature attempt came with a hefty price tag: about $22k borrowed at age 17 for 1.5 years of in-state tuition plus first-semester on-campus room and board after full Pell grants. I worked part-time while studying full-time but struggled to maintain academic focus or settle on a major. At 19, mounting debt mismatched with a blurred vision of career possibilities (note this was 2008-10, peak great recession). Further discouraged by studies and headlines telling millennials we will earn less, own less, and owe more (See: Kurz, C.J., Li, G. and Vine, D.J., 2019. Are millennials different? In Handbook of US consumer economics pp. 193-232 Academic Press), I packed my car with trash bags full of everything I owned and set off for California and full-time employment for the next five years. I initially attended some part-time community college classes (mostly to avoid having to begin loan repayment, something I could not afford), but eventually left education altogether. I might have avoided university from then on, but my mother’s insistence helped me return in my mid-twenties (now a few years later than my peers).

I will note that college leavers who begin but do not complete undergraduate degrees are on one of the worst financial tracks – yes, that was me. I am not an econ. See Davies, R. and Elias, P., 2003. Dropping out: A study of early leavers from higher education. DfES Publications.

I’d paid off my initial undergraduate loans by then but took out another 15k for (reduced, in-state) tuition to finish and opted to move back home for as long as manageable and continued working multiple part-time jobs while studying to keep costs down.

I am so glad that I listened to the most successful people around me as they motivated me to finish that degree. The microeconomic impacts of education are well researched and suggest a significant befit of HE on employability and earnings. See Hermannsson, K., 2016. The economic impact of education: Evidence and relevance. But for many, the cost of both education itself plus living costs equals a huge financial burden or block. Furthermore, in my experience, working while going to school took a toll on my mental well-being and my performance. I repeatedly felt myself fall short of my potential due to a lack of time and energy. I can only imagine what students with more on their plate i.e. parents/caregivers experience.

Struggles aside, I got much better grades than the first time around and planned to pay off my 15k in undergraduate debt post-graduation and then investigate graduate school options (based on financial feasibility).

Then life took another turn, and I spent the rest of my twenties working full-time/minimum-wage in Spain. I made every monthly loan payment (plus) but only knocked down my debt by 4k.

Turning thirty (during the pandemic) was a wake-up call. I realized it was now or never for graduate school. Although I was 11k short of loan payoff, if I wanted to start ticking off my adulthood bucket list, it was time to move forward. Despite my remaining student debt, I went ahead and took out 30k for graduate school. This felt both terrifying and necessary. I am so grateful to my mother and grandmother who offered me generous financial support to subsidize my living costs during this one-year master’s course. Their investment afforded me the time and attention to give my all to my studies and realize my academic potential. This year turned out to be undoubtedly life-changing as I am now poised to begin a fully funded Ph.D.

Currently, I have 41k in student debt. 11k of that will be forgiven thanks to Biden’s Student Loan Forgiveness Plan. This will knock $150 off my monthly payments. That means I’ll have 10% more of my income to apply to paying off my graduate loan ASAP. I’ll graduate with my Ph.D. and ~50% less debt than expected in 2026.

For me, student debt forgiveness feels like a chance to catch up to where I thought I’d be at my age. It empowers me to start thinking past the payback phase and consider what else I’d like to invest in during my adult years. Young American adults are putting off moving out, having kids, marriage, and more. Of course, many factors impact this decision but I’ll say it – a lot of us are financially struggling – and for many, the debt began at 18 in college.

I often hear student loans called ‘good debt’ – a sentiment I don’t completely disagree with. Of all the places I’ve gone, University has been the most life-changing. The financial and personal (pecuniary and nonpecuniary) benefits of education are undeniable: better health, higher earnings, improved parenting, and civic responsibility (sometimes taken too far/misinterpreted as elitism)… but as HE costs continue to rise, Gen Z is taking on the highest-ever education debt. More will need to be done (but I’m biased as this is what I study).

I support relief for small businesses and families though I have none. I support welfare programs that help grant access to healthcare, food, housing, and education to those in need. I pay my taxes with infrastructure and opportunity in mind. But it’s about time that middle-class Americans got a boost.

Thanks, Biden and Harris, and all of those working meticulously to balance federal policies. I am doing my best to make the most of my education investments (and those of my family/fellow American taxpayers) and having spent a year dedicated to studying education policy, I am really impressed by this progressive relief package.

Of course, there will be political outrage- there always is – but I believe the benefits will outweigh the risks. A financially stressed middle class threatens economic stability as we know it. In my case, it’s a much-needed boost of morale that only makes me want to study harder, get more involved, and keep my eye on my goals. I tend to exaggerate, but do believe it will make me a better, more productive member of society with the strength and courage to face incoming challenges and maintain progress. Today I am extra proud of my country. Finally some good news!

On my first day of graduate school at the University of Glasgow.

By Grace in the World

I hope that the experiences I record here could be of some use to those looking to travel and I welcome questions/comments/feedback. Thank you for reading my words. Bon voyage!

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