The People Who Can’t Pay Their Student Loans 10 Years After Graduating

A student protesting tuition hikes at DePaul.

If you were to guess what the most popular piece on The Billfold is, what would you say? The story that readers from all over are looking up and reading on a daily basis isn’t about how compound interest works or the difference between traditional and Roth IRAs—it’s this piece by Anna Moreno about when she defaulted on her student loans and what she did to get back on track.

I mention this because of Sarah Green’s piece in the Harvard Business Review looking at new research examining college graduates who were no longer making student loan payments 10 years after leaving school “either because those borrowers were in default or because they had received a forbearance or deferment on their loans.”

Some of the reasons for default or forbearance are obvious: It matters how much money you earn after you graduate and also where you went to school (students who attended four-year schools were more likely to stay on top of their loan payments than those who attended two-year and for-profit institutions). How much you borrowed obviously makes a difference: “For every additional $1,000 borrowed, the likelihood of nonpayment rises by 0.4 percentage points. Put differently, to offset every additional $1,000 you borrow, you need to earn an additional $10,000 in income or your risk of nonpayment will rise.”

Those are the things we have control over. Things that we don’t have control over—whether or mother went to college, whether we are a man or woman (women tend to get paid less than men and therefore generally have a harder time paying back loans), and what race we are—can also play roles, according to the research.

There’s also this: “If your parents can help you out – with both cold, hard cash, and sound financial advice — you’re a lot less likely to end up in nonpayment.” Well, yes.

I’m also 10 years out of college and in that time I have gone to grad school, suffered through bouts of unemployment during the recession (during which I hustled to find gigs to make my minimum payments), and landed in many different jobs. Somehow, through that, I have managed to pay back half my loans. (That somehow can be attributed in part because I’m fortunate to have low interest rates, have automated payments, and have thrown extra payments at my loans when I have had the chance.) I foresee it all being paid off by the time I’m 40. Maybe you’ll see me, in 2024, announcing in a monthly check-in, that it’s all paid off.

Photo: Bartosz Brzezinski


43 Comments / Post A Comment

jquick (#3,730)

Which is why everyone needs to study something they can get a job in, and that pays way more than a living wage. Save your folly – writing, archeology, hawk training…- as a hobby. Earn a living (that’s why it’s called a job. It’s work.), do your “passion” on your own time. Says a woman who studied STEM, no help from parents for uni, and early retired at 45.

samburger (#5,489)

@jquick You can’t just study stems you have to study the whole plant I think

aetataureate (#1,310)

@samburger Bless you and this comment.

LookUponMyWorks (#2,616)

@jquick @jquick Look, I love science. And technology. And engineering. Not so much math, but I appreciate that it’s necessary. But lots of people do not have the natural aptitude to make a career out of it. Do not have the natural aptitude to succeed in college at a STEM degree, and/or do not have the primary and high school education necessary to succeed – hell, survive – in a STEM education program. Yeah, I believe it goes all the way back to primary school education in STEM, and mine was crummy, like a lot of people.

Also – I used to work in higher ed admin, in a PhD program ranked #2 in the country in that particular STEM field. And guess what? Our graduates – who were graduating often with publications and conference experience – were often languishing in bad postdoc positions for 1-5 years post graduation. The market is terrible, even in STEM R&D land.

TL;DR: Education just costs too damn much in the US and telling people to study STEM is not the answer.

aetataureate (#1,310)

@LookUponMyWorks This commenter says the same thing on any post even remotely about the tough job market or education. No use throwing good comments after bad, as it were. I especially like the “That’s why it’s called work” part.

logos3_1 (#2,821)

An engineer knew it the folliest
To want to be an archaeologist.
But when both went afar
To see the Arch d’Abattoir,
The engineer kind of got eaten, but the archaeologist knew better than to enter an uncontrolled excavation, and hey I didn’t study English so no scansion for me. Sigh.

LookUponMyWorks (#2,616)

@aetataureate I know, and I know I shouldn’t feed the stem trolls, but saying shit like studying STEM is the answer to the education cost crisis really gets me riled up.

aetataureate (#1,310)

@LookUponMyWorks I agree . . . and I’m a STEM student. Ha! But also I believe that commenter is from Australia?

LookUponMyWorks (#2,616)

@aetataureate Yeah, and she retired at 45 so she has nothing to do but sit around and wait for the Billfold to post about student loans and general education debt.

RiffRandell (#4,774)

@LookUponMyWorks Thank you for your thoughtful reply, thank @logos3_1 for your limerick, thank you @samburger for your wit, and none for @jquick

@jquick I see three STEM occupations on here.

bibliobotic (#6,725)

@samburger I registered for an account just so I could tell you I’m at work crouched down behind a computer so people don’t see me still laughing at this.

Allison (#4,509)

@aetataureate I know a different commenter who was a mansplainologist was Australian (but still an expert on things like racism in America). Not sure about jquick, especially with this timestamp.

A few weeks ago I went to my friend’s comedy show and this comic in the lineup was a dude from Australia who did a set on how intolerant it is over there. He was like, “Australia is a great place, for heterosexual…snakes. Gay humans? Not so much.” I have NO IDEA if his claims are substantiated but I have not been able to get that line out of my head. Ha.

Aconite (#6,401)

@Meaghan O’Connell
Can we please just ban jquick? I’m sick of reading smug, hateful comments like this, and SHE DOESN’T EVER ACTUALLY REPLY TO ANYONE, so there is no discussion. God knows I’ve tried to have many a chat with her myself…

Elsajeni (#1,763)

@LookUponMyWorks Not to mention: okay, let’s jump forward in time. Here we are in the future where everyone recognizes @jquick’s wisdom and studies STEM. EVERYONE. Every single young person in the United States who wants a job either is pursuing or has achieved a STEM degree. (All 30,000 undergraduates at my alma mater, for a start, and that is just a tiny fraction of the category “students at public universities in the state of Texas,” let alone “all job-wanting college students everywhere”.) I see a couple serious problems with this, most prominently “There are not enough STEM jobs to support every single person who wants one, and now that there are thousands and thousands of applicants per job the pay for those jobs has plummeted anyway,” but also, like, “No one in the U.S. is qualified to teach the third grade anymore.”

sea ermine (#122)

@jquick ..yeah, a lot of my (hardworking, high gpa having) friends who studied stem ended up very unemployed for a long while after college, and many are now underemployed because a lot of science jobs have been turned into low paying temp jobs with limited advancement opportunities.

@samburger omg I almost pee’d myself in my cubicle reading that.

@sea ermine it’s very clear from the list of high-paying jobs I posted. Everyone should just major in CEO Studies and become a CEO.

ATF (#4,229)

@sea ermine THIS. As a scientist who lives in Boston, the actual biotech capital of the world, with a fabulous resume, degrees from good schools, and a winning personality (I’m the best, I swear) – I can tell you this is rapidly evolving into a kind of shitty field to be in. It’s quite boom or bust and companies have cottoned on to the idea that they can ramp up hands in the lab when they need to by hiring contractors and then letting them go when things quiet down (ie your drug fails at some point in clinical trials). Full time jobs are harder and harder to come by, the contract gigs pay well but come with NO benefits beyond health insurance because Mittens made it that way. You wind up losing out on tens of thousands of dollars a year in things like 401K employer match, dental insurance, paid time off, paid holidays (if it’s Memorial day and the company is closed, you are screwed out of a day pay), any sort of sick time, disability insurance, etc. Plus it’s contract work. You could very well be out of a job in another six months.

But those are ever increasingly the only jobs out there because you won’t make the local news cycle of not renewing the contracts but you will when you have to lay off 10% of your FTEs.

Caitlin with a C (#3,578)

@Elsajeni That’s why everyone should triple-major in Mandarin Chinese, Economics, and Mechanical Engineering. Literally everyone. No exceptions.

@stuffisthings Legit question, do doctors not fall under Science in the STEM acronym ?

@TheDoctorsCompanion it’s a good question. Medicine and law are generally considered “the professions,” but technically so is engineering (though you can become a credentialed engineer in a unified 5-year program). But STEM is usually discussed in the context of “undergraduate degrees that, on their own, will result in a good job.”

eatmoredumplings (#3,808)

@stuffisthings Which is why when people talk about “STEM” like a unified thing, they totally miss out on the differences between pure sciences and more applied fields like engineering. It drives me crazy. I’m an archaeologist (which, by the way, includes a LOT of science and scientific methodology! it just also has history and stuff). What a research paleontologist does is a lot more similar to what I do than to what a mechanical engineer does. Sure, if you got your paleontology degree from a geology department, you might be able to get work in the oil industry, but it’s not like all SCIENTISTS have these amazing job markets straight out of college.

Also, it’s true that a lot of the issues in the broader economy aren’t as bad in STEM fields yet, but I think it’s just a matter of time. Almost every field is moving toward temp contracts, lower benefits, and stagnating pay. Sure, booming tech industries might insulate some corners of some STEM job markets for now, but it’s kind of foolhardy to think that will always be the case, isn’t it?

@eatmoredumplings I don’t know anyone other than a few specific types of engineers who think the “STEM” market is all that great now. Also, interesting fact I’ve mentioned here before, even with all the recent growth there are fewer people employed in computer science fields today than before the 2001 bubble burst.

chevyvan (#2,956)

@jquick You know who should be doing engineering? Somebody who doesn’t want to do it! Cool idea. Totally nothing wrong with it.

Stanley (#6,750)

@stuffisthings Uh, you do realize alot of those medical careers require alot of science background, right?

halloliebchen (#5,373)

I realized yesterday after doing some math that if I live a super spartan existence, I could pay off my remaining 40,000 of student loans in 4 years. At that point I would be 31. Just the thought of this filled me with so much joy, I’m having a hard time coming to terms with the fact that it might not be realistic, even though it is technically possible.

logos3_1 (#2,821)

@ halloliebchen – even if you leave a bit of wiggle room in your spartan existence, by 32 or 33 would be amazing! *high-fives you*

aetataureate (#1,310)

@logos3_1 “Wiggle Room in Your Spartan Existence” is the new Radiohead single, right?

halloliebchen (#5,373)

@logos3_1 Thanks! It’s a crazy thought!

Stina (#686)

@aetataureate “Wiggle Room in Your Spartan Existence” is the new Radiohead single, right” *snorts*

And continued good luck to halloliebchen in paying off your loans!

I don’t know why everyone is so eager to pay back their loans. I am happy to pay the absolute minimum on mine until they are written off.

Could have something to do with the fact that, as of next year, I will be ten years out of undergrad, and my loan balance is higher than when I graduated.

aetataureate (#1,310)

@stuffisthings Fact check . . . Did you declare bankruptcy at one point?

@aetataureate Nope. My parents did though and that threw my private loan immediately into default. Still have no idea what to do about that guy.

@stuffisthings Yup, I am quite content to continue making my IBR payment, work for the government for 9 more years, and then say “toodles” to the whole thing.

wrappedupinbooks (#1,426)

@stuffisthings i gotta get me one of them gummit jobs

@wrappedupinbooks You’re welcome to the low pay and constituent harassment too! Nonprofits and certain other organizations also apply for Public Service Forgiveness, but see my earlier sentence re: tradeoffs.

Stanley (#6,750)

@polka dots vs stripes I think the “harassment” claim is way overblown. For every public official who says criticizes federal employees, there are several who are ensuring that the federal bureaucracy remains large, bloated, and inefficient.

Although I am glad to see the bill making it easier to fire incompetent VA officials.

@Stanley there are some people, most in legislator’s office but many in departments as well, who sole job is it to answer phone calls from the public, and while most people are polite and can make their point succiently, there are also many who get transferred to Capitol police for making threats or who scream and yell just because they can. That’s the harrassment I was talking about, not the general comments that criticize the size of the government.

therealjaygatsby (#4,053)

@stuffisthings Hmmm I’ve been struggling with this idea lately. On the one hand, high monthly payments over the minimum are slowly killing me. On the other, I’m afraid to see my balance grow (my minimum payment under IBR is $200 less than the monthly interest). I also worry that the eventual write-off under IBR will be billed to me as taxable income (I believe this is how the law currently stands, although obviously it could change if people are angry enough in 20-25 years).

aetataureate (#1,310)

“After all, people may really have in them some vocation which is not quite plain to themselves, may they not? They may seem idle and weak because they are growing. We should be very patient with each other, I think.” — Dorothea, Middlemarch

shopgirl (#6,739)

The Ana Moreno piece on student loans was really helpful and inspiring. I am on track to rehabilitate my loans after 9 months. I was so relieved to find out what to do about my defaulted loans. My experience was so similar.

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