The Kiss of Debt

I have student debt.  Like many good blue collar Americans, I got an undergraduate degree and a master’s degree to make sure I entered the job market with the right learnin’ skills.While some of the costs were covered by scholarships and student jobs (like when I was a totally sweet RA), the loans I took out to pay for the rest of that schoolin’ totaled up to a little less than $70,000.  I say “a little less than $70,000” because the interest rates on those puppies keep that number constantly rising as time passes.  And because I can only afford the lowest payment per month, I am perpetually just paying off interest on my loans and still owe the government “a little less than $70,000.”  I’m supposedly on track to have these loans paid off by 2027, but I have no idea how that’s possible considering the past year I’ve paid $5,000+ and only $1,100+ of that has gone towards my actual loans.  The rest has just paid off interest.

I’m supposedly on track to have these loans paid off by 2027, but I have no idea how that’s possible considering the past year I’ve paid $5,000+ and only $1,100+ of that has gone towards my actual loans.The rest has just paid off interest.

The breakdown of my loan math is definitely interesting.  My time in undergrad was paid for by a $2,000+ Direct Unsubsidized Consolidation Loan and a $8,000+ Direct Subsidized Consolidation Loan with 2.875 percent interest rates.  I also had a $1,800+ Direct Subsidized Consolidation Loan where I locked into a sweet 4.75 percent interest rate.  Those loans are on track to be paid off by 2027.  When I really think about it, those are manageable.But then here comes the doozie – my one year in graduate school was not allowed to be funded the same way, so I had to pay for that with an $8,000+ Direct Subsidized Stafford Loan and a $12,000+ Direct Unsubsidized Stafford Loan, both with 6.8 percent interest rates.  The kicker with this is a $25,000 Direct Student Plus Loan with a 7.9 percent interest rate, which was my best option to pay for the costs the Stafford Loans didn’t cover.  They certainly peaked my interest.

Now don’t get me wrong, I loved my time in college, both times.  I wouldn’t be where I am now without those life experiences and this is not a piece about how college costs too much and I didn’t get enough out of Expensive State University for my money blah blah blah.  But why does higher education cost so much in the U.S. and why does the federal government – supposedly the source of the lowest, most fair and affordable student loans – keep such a high interest rate on the bill I owe them?  That’s like my tab at a bar getting higher the longer I stay there even though I stopped drinking a long time ago (an appropriate college metaphor).  There are certainly convincing arguments as to why the cost of college has skyrocketed so much over the last few decades.  The most convincing to me is that this is just what happens when the federal government loans billions of dollars to the consumers of any industry.

But why does higher education cost so much in the U.S. and why does the federal government – supposedly the source of the lowest, most fair and affordable student loans – keep such a high interest rate on the bill I owe them?  That’s like my tab at a bar getting higher the longer I stay there even though I stopped drinking a long time ago (an appropriate college metaphor).

No matter what, it’s clear that something has to be done.While it would be great if Senator Elizabeth Warren could talk Congress into forgiving all the student loan debt, the very least the feds could do is lower those darn student loan interest rates.It’s an abomination for the federal government to blatantly make a profit off of citizens who merely borrowed money to get an education.With $1.3 trillion and counting, you don’t need a math degree to know the looming student debt crisis is going to be a very bad deal.

Now the same alarm bells are going off for anyone paying attention to the student loan bubble in the U.S., which currently totals $1.3 trillion and counting.The financial crisis of 2008 was supposedly “solved” by bailing out Wall Street for over $700 billion, which is chump change compared to the student loan bubble.Like the housing crisis that engineered the 2008 fiasco, these student loans aren’t getting paid off anytime soon either.My $70,000 is modest compared to other former students who owe $100,000 or more.Heck, I have a friend with an unused law degree and $270,000 in debt.Paying it off takes away from the money we could be using to buy cars or houses, which is why so many millennials still live at home.If someone can’t pay their debt, it can go into deferment or forbearance or even default, and then your debt just gets higher and higher and there’s nothing you can do about it because George W. Bush had the foresight to make it illegal to declare bankruptcy due to student loans.That’s why some students are going into default on purpose now so the federal government has to forgive their loans.This number will certainly continue to grow.

Watch Jesse Ventura's take on our debt crisis in this Off The Grid video: