Long Legs and other Personal Problems

Student Loans Part Two A

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I want to thank everyone for reading my LONG first post about my student loans. I received some great feedback in the form of comments here on the blog, and also in the form of private messages from across the country. It means a lot to me that you took the time to read it, and that you are grateful I opened the conversation. I was incredibly nervous to talk about this, but I know from the response I received that I made the right decision. I decided to definitely add an entry (after telling my own story) to address some of the questions and comments, so please continue to give me your feedback and your responses so I can talk about them in a few weeks!

This installment is the most personal one yet because I talk about the staggering amount I actually owe. I know that there are many of you out there who owe more, and some who owe less, but no matter the exact number, it has an effect on our decision-making and our futures. Therefore, I am splitting this entry into two parts, with the second one addressing the impact my loans have on my decisions, and the compromises and concessions I make in my daily life. This stuff is depressing, and this blog is not called #LongLegsBigLoans, so I will try to intersperse these with lighter topics. As always, please subscribe and I welcome all comments. Also, if you know anyone else struggling in silence (you probably do, if you look at the numbers), feel free to pass it along! Thanks for reading ♥

Part 2 (A) – Amount of Money; Loans on Loans on Loans

Soundtrack: Bills, Bills, Bills by Destiny’s Child

“Can you pay my bills? Can you pay my telephone bills? Can you pay my automo-bills?”

Student loans are a generational problem caused by a hat trick of terribles: 1. Higher education is now necessary to get any sort of high-paying occupation, which it was not during our parents’ generation. 2. Education costs a sh*tton of money. Tuition has gone up 538% in the past 22 years! And salaries have not followed suit. 3. Banks and the Federal Government know that, and take advantage of it by charging astronomical and stifling interest rates, and not forgiving loans when they originally said they would. Some states have taken it into their own hands and have actually sued FedLoan servicing over their unethical practices, acting as the enforcer when FedLoans has repeatedly mis–charged borrowers and refused to reimburse them. Even the Massachusetts Attorney General called them out on their “unfair or deceptive practices.”

So let’s say you don’t actually get overcharged and you are just being “rightly” charged an arm and a leg every month for the indeterminate future. This installment is going to be about the sheer quantity of loans people carry. There are a lot of numbers at the beginning, so don’t let your eyes glaze over. The math will be over quickly and then I will explain in laymen’s terms how terrible this all is while I listen to the “Songs to Cry Too” (sic.) playlist on Spotify. Spoiler Alert: there’s a lot of Ed Sheeran.

People are afraid to say the true magnitude of their loans, so I’m going to start by just straight saying it: I currently owe $92,907 in federal loans and $6,713 in private loans. Total Owed = $99,620. In a few months, it will undoubtedly be 6 figures. I finished law school with $86,702 in federal loans and $12,000 in private loans. Let that sink in, I went from $98,702 in loans when I graduated, to $99,620 at the current time, 4 years later, and I have made thousands of dollars in payments over the years. My federal loans have literally increased by over $6,200 despite the fact that I have paid hundreds, and at some points, thousands of dollars to them every month since I graduated.

The good news is, some states are trying to curtail this problem by offering free tuition to state schools (GO NEW YORK, GO!). The bad news is, there are no such programs for graduate school, and if you go to a grad school, you’re basically f*cked. Americans owe over $1 trillion in student loan debt, spread out among about 44 million borrowers. That’s about $620 billion more than the total U.S. credit card debt. Approximately 40 percent of the $1 trillion student loan debt was used to finance graduate and professional degrees. Also, the interest rates on grad loans are higher.

There may not be any state-funded programs for grad schools, but there are still some scholarship programs or merit-based options. I received $39,000/year in scholarship from Brooklyn Law School. That means that if I did not have that scholarship, I would have completed law school with a whopping $216,620 in student loans. Just think about that for a second. If I did not have scholarship, I would have left school with the amount of loans that could pay for a nice, suburban home.

I cannot believe I just admitted that I had that much money in loans. As you read in Part One, one of the major emotions associated with loans is shame. But really, why?? Everyone has them. Or at least 70% of us do. What about the people who didn’t have scholarship? I was almost one of those people. I applied to 10 law schools, and I was accepted to 7. Many people suggested that the decision was simple: go to the highest-ranked one. For me, that was Boston University, ranked 20 at the time. Top 20 school, they said. No brainer, they said. However, BU didn’t offer me any financial aid. I decided not to go there, and that decision was based solely on money, not at all based on the fact that I saw a roach when I toured the building. (Ok, the roach probably made an impact, too.)

In hindsight, especially since I do not work in law anymore, I think I made the correct decision. But how would I have known that for sure at the time? Anyone I asked advised me to go to a better school, one that would improve my marketability, and therefore improve my job prospects, and therefore would improve my earning potential. When I was applying to and choosing between law schools, the conversation of student loan repayment almost never came up. In hindsight, that seems incredibly short-sighted and a bit unbelievable.

I was speaking with a friend who does not have any loans recently, and I was pitching the idea of writing about this topic. I cited a few vague statistics, noting that I owed about $100K, and that I had a combined $120K in scholarship. He looked at me like I had 5 heads, and he said, “What? That can’t be, that means that people can graduate from law school with over $200K in loans!” It seems crazy, but it is entirely possible. Brace yourself for some more math here; it’s basic, don’t worry. Tuition is $50K/year., which means 3 years of law school = $150K. That leaves only $50K for room and board for 3 years if you want to leave school with only $200K in loans. That means $16,666/year. Let’s say you live in a modest apartment in New York with roommates, for about $1,000/month (what a great deal!). That means your rent is $12,000/year, not including utilities, and that leaves you $4,666/year for food, utilities, metrocard, oh, AND BOOKS. Which can be $1,000/semester. Basically, there is no way you can get out of law school with only $200K in loans if you don’t have scholarship. And then school ends and the interest hits you.

Last year, my dad was asking me questions while filing my taxes (thanks again, daddy!), and he asked me, almost incredulously, “you didn’t happen to pay over $2,500 in interest on your loans this year, did you?” I basically laughed in his face. OF COURSE I paid that much in interest! Thankfully, the one place student loans come in handy is when you do your taxes, thanks to the big break you get for interest. But the fact that my own father had no idea that literally ALL of my payments I make toward my loans go ONLY to interest, shows the ignorance that most people without loans have about them. Last year I paid $5,500 toward my federal student loans. Of that, $5,500 of it went to interest. That’s right, all of it. Here is a screenshot of my payment to my federal loans from June of this year. $462.32, $0 of it applied to the principal.

But this brings me to my next obvious point: the reason some people cannot empathize is because they do not have any first-hand experience. I talked about this in Part One dealing with emotions, so I won’t say much about it here, but those who do not have loans just don’t think about it. Their world doesn’t revolve around these monthly payments, so they don’t realize just how much of a lead weight it is for so many people.

I have one friend who told me she used to pay student loans 8 separate times throughout the month until she consolidated them recently. Talk about a constant reminder. She was basically hemorrhaging money EVERY FOUR DAYS. According to CBS Money Watch, students typically end up with five to seven different loans at graduation. Each one can be for a different amount and carry a different interest rate.

I have another friend who told me her monthly student loan payment is higher than her mortgage. She lives in Utah, but STILL. For those of us not in Utah, or those of us without spouses, how are we supposed to purchase homes, build families, or become independent humans, when we are paying ridiculous amounts every month just to stay above water? It really is a huge problem.

THE MOST DRAMATIC BLOG POST CONTINUES NEXT WEEK!! Stay tuned and subscribe; next week I will explain the small and big ways I try to save money to stay above water, as well as the huge life decisions that will be impacted by my student loans: career, family, home, retirement, basically everything. The following installment, I will tell my personal story about which repayment plans I have opted into, and out of, and how I am using free credit card offers to pay off my private loans. $$ FREE MONEY! $$

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Long Legs and other Personal Problems

Student Loans Part One

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Welcome to a three-part series about student loans. This is not financial advice. This is a summary of my personal experience, my feelings, and how I have dealt with this very big problem (pun intended). I got the idea to write about student loans from one of my friends who comes to my Spin class. She said, “I have an idea for your blog. Maybe I’m the only person who would be interested in it, but since you are a non-practicing lawyer, I would definitely love to hear what you have to say about student loans.” Here’s the thing: she is NOT the only person interested, because SO MANY OF US HAVE THEM. It’s unbelievable how large of an issue this is for our generation, and yet so few of us actually talk about it. The first rule about student loans, is don’t talk about student loans. JK, the first rule is to pay them because if you don’t your credit is screwed for life. Some credit blogs talk about it, but in the real world, it’s an unspoken ever-growing elephant in the room.

When I started brainstorming what I would write on, I realized I had SO many thoughts. In fact, I have way too many for one post. Therefore, this will be a three-part series with possible follow-up to address comments and questions. Part one, below, deals with the emotions associated with student loans. Part two will deal with the sheer quantity of loans, the weight it puts on me/us, and how it changes my/our behavior. Finally, part three will deal with my own personal story of loan repayment, the multiple payment plans I have opted into, and out of, and it will include some advice that I have (thankfully) taken from my very financially-savvy emoji-faced bf.

This is a bit more serious than my typical blog posts, and more personal for sure (I’m going to tell you how much I owe!! GASP!), but I hope to be helpful by at least beginning the conversation. If you have any comments, if you want to empathize, if you care to sympathize, or if it just plain makes you mad, please please leave comments. Misery loves company.

As they said on Real World, “this is the true story… when people stop being polite and start getting real.” Without further ado, my semi-interesting take on a super taboo, off-limits topic. Maybe I’ll even help someone.

Part 1 – Emotions

Soundtrack: So Emotional by Whitney Houston

“I get so emotional, baby, every time I think of you”

When I started to consider the real possibility of writing about loans, my first thought was, “will anybody care?” As I said above, there are a huge number of us young professionals, especially in New York City, who have student loans, so why don’t I hear about it? I recently was talking to a friend about how it seems that everyone on my Facebook is going on extravagant vacations, and I’m just drowning in debt. Last week alone, my Instagram feed featured 1 friend in Italy, 2 friends in Greece, 3 friends in Croatia, 2 in Austria, 1 in Iceland and 1 in Bali. WTF? Why wasn’t I going on extravagant vacations? Oh yeah, student loans. Even if my payments were only $200/month (LOL I WISH), if I didn’t have them, I would have an extra $2,400/year to travel the world! That brings me to my first emotion: FOMO (fear of missing out). Next week I will talk about how my spending habits are affected by my loans, but suffice it to say, I don’t take any extravagant vacations.

My friend reminded me that this FOMO is the unfortunate consequence from the nature of social media: people post the highlight reel. No one posts about student loans. She was 100% correct. As I started to pitch the idea of this post to a few friends, it turned out there were many more drowning-in-student-debt millennials in my circle than I originally thought.

But also, why DOES no one post about student loans since it’s such a huge problem? The answer is: it’s fucking depressing. There, I said it. Who the hell wants to talk about the fact that we are all so broke that we will never be able to purchase homes and we will have to put off having kids until it’s possibly too late, etc. etc. More on that in Part Two of this trilogy. But the point is, there are a lot of emotions surrounding student loans, and it’s not an easy concept to grasp for the 30% of the population who does not have loans. For those of us who do, we just suffer in silence. I was going to call us, the loan-havers, “the haves” and the others as the “have-nots,” but it doesn’t seem right to say that people with $150K+ in loans, HAVE anything. Besides anxiety.

When I first started dating my emoji-bf who I am not allowed to talk about at all on this blog, hence the emoji, I HATED talking about money. Dreaded it. Every time he would bring it up (which was a lot, he’s a finance guy), I would completely close off. Sometimes I would literally scream, “Alexa, bedroom off,” and our lights would go off, and I would turn away from him in bed and refuse to speak to him. Over the past two years, he has worn me down, and we now talk candidly about money pretty frequently. In fact, you will see some of the knowledge I have gleaned by finally listening to him in Part Three of this series. I was mostly shying away from the topic because I was ashamed, but also because I felt he couldn’t relate.

Now, I am about to break the “don’t talk about your bf at all” rule here, and I will put him out there, so to speak: he doesn’t have any student loans. Why does that matter? Because it makes it really difficult for him to understand me and relate to my feelings about the loans. Don’t get me wrong, he gets the idea of loans. In fact, he probably (read: definitely) understands them more than I do. He understands interest rates and consolidation, and he even knows what the abbreviation APR means. True confession: I still don’t know. Scratch that, it means Annual Percentage Rate. I just googled it. Anyway, even if he does know all those fancy words and complicated numbers, he still doesn’t get it get it. Or rather, he doesn’t get ME.

Having students loans to pay, especially loans of this large quantity, is not like having an electricity bill to pay, or a car payment. There is a lot more involved. Some of the emotions involved with loans: anxiety, dread, fear, helplessness, shame, regret, isolation. Just to name a few. A lot of these are interconnected, like the anxiety of having so many loans hanging over your head is combined with the dread that you will never pay them off. Also, there is a certain fear that you will be tied down forever, and of course, the constant fear that you will default if you lose your job, which will ruin your credit, or the fear that since you are forever-indebted, you will never be able to have a house or a family. There is even the fear and guilt that if you die, your family will get stuck having to deal with them. Yes, I’ve looked into this, and luckily, according to the U.S. Department of Education, if the borrower of a federal student loan dies, the loan is automatically canceled and the debt is discharged by the government. Unfortunately, this doesn’t apply to private student loans, but that’s a whole different story. At least there’s that to look forward to: the sweet release of death. JK. Sort of. And then of course there is the fear that no one will ever want to marry you, because they are marrying your debt. As if being single isn’t hard enough in NYC, AMIRITE? Sigh.

And then of course the embarrassment. This isn’t a “woe-is-me, this happened to me without my knowledge” sob story where I want you to feel bad for me. But that almost makes it worse. There’s a certain shame and embarrassment associated with the fact that I got myself into this situation by my own choices. It’s not that I unexpectedly had children I need to support, or I fell ill and I have medical bills I can’t pay. I made my own bed here. There are no ifs ands or buts about it. So now here I am, trying to figure out how to deal, but doing it alone. I was recently told about a podcast with WNYC called Death Sex and Money. They did a two-part series on Student Loans and the huge secret they are. They had a higher response than they ever have before, and everyone was keeping it a secret. There was a guy who called in from his car. He was a successful engineer raising a family, making 6 figures and he still had over $100K in loans. His wife didn’t know. His friends didn’t know. It was a huge scary secret.

All of these emotions combine to create a sense of helplessness. There is a certain feeling that you have dug yourself into a hole and there is simply nothing you can do about it. Part of that is true, but part of it isn’t. I will address what I am doing to try and dig myself out in Part Three of this series. Moreover, there is a unique shame associated with having so many loans, especially since no one talks about it. We know our parents don’t have it, so why us? It must mean we did something wrong, right? It must mean we made some wrong decisions along the way, right? And that’s where the next hard-hitting emotion comes in: regret. Lord knows I have a lot of that. Here I am talking about being weighed down by law school loans, and I don’t even practice law!! Do I regret it? EVERY DAMN DAY.

And then there is the isolation. But here’s the thing: it’s not our fault and YOU ARE NOT ALONE!! According to Forbes, tuition and fees have risen 538% since 1985, outpacing the Consumer Price Index by over 400%. Now more than 70% of students graduate with loans and outstanding student loan debt totals $1 trillion. And tell your parents to shove it, because they just cannot understand. Ok, maybe don’t tell them that, but it really is a problem that is unique to our generation.

How much money are we really talking about here? And how do I manage to live while facing these astronomical numbers hanging over my head like a depressing dark cloud? As they do in my favorite show, The Bachelor, I’ll save that for next week, when I will reveal the actual total amount of money I owe in student loans, in the MOST DRAMATIC BLOG POST YET.

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Long Legs and other Personal Problems

Recovering Attorney

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Today is the 4th anniversary of my law school graduation. I figured there was no better time to start talking about my experience. If you read my About Me, you’d know that I am a recovering attorney. Short version: I graduated law school in June of 2013, passed the NY and NJ Bar, worked for a mid-size civil defense litigation firm for 11 very long months and quit. Never to look back. I haven’t practiced law in 2 years, 10 months and 20 days. That’s 1,055 days. Which is equivalent to 1,519,200 minutes. Or 91,152,000 seconds. But who’s counting.

Things I used to be able to say: I work at a law firm in the financial district. Technically I get 10 days of vacation per year, but no one takes them. And I still have to bill 180 hours/month so why bother. I drink every day. I cry when I leave work. A homeless man with tattoos on his face gave me a bottle of the water on the subway today because I was crying and he told me “things would get better.”

Things I can say now: My job does not own me. I don’t check my work email from Friday at 5 pm until Monday at 9 am. I get 20 days of vacation, plus all Jewish holidays and Federal Holidays, so basically 45 days/year. I regularly sign off on my emails with “Mazel Tov” or “Shabbat Shalom.” I know there is a such thing as a holiday that celebrates cheesecake. I hyperlink words in my blog posts to articles in Ha’aretz.

Thing I used to do and still can do: Sign my complaint emails to my leasing office/airlines/hotels/Uber/anything customer service related, with three magic letters: ESQ.

That last part is crucial. But was it worth $100K in loans? I’ve gotten a lot of money back from Delta, but the answer is still “probably not.” The American Bar Association literally published a paper entitled “The Value Proposition of Attending Law School,” which basically tells people law school is a financial burden that is often not worth the time or benefit, and that most expected salaries will not support the expected debt. More on student loans another time, though.

Have I convinced you not to go yet? If I haven’t, maybe someone else will. Nowadays, you can find someone telling you not to go to law school on almost every website. A quick google search of “don’t go to law school” will bring back “about 26,100,000 results,” not like I have done this or anything. In 2013, Business Insider published a flow chart specifically designed to convince you not to go to law school. Unfortunately, I graduated in 2013, so it was too little too late. The Boston Globe wrote about it. Even Huffington Post (Tucker Max) talked about it. Above the Law talks about it all the time. In 2015, they started a piece with “I’m a lawyer. I hate it. what now?” Unfortunately, this is more common than you would think. Judging from a very small sample size of people I went to law school with (graduating class of 478), I can tell you that I personally know 3 people who actually enjoy what they do. The rest of them? Well, they get to enjoy at least one of the only 2 great parts of being a lawyer: (1) saying you’re a lawyer, and (2) a big paycheck. Those who actually like their jobs (probably because they are “making a difference” or “helping people”) do not actually get to enjoy the money part. I probably make more money than they did when they started, and none of them get a 2-day cheesecake holiday off of work.

When I tell people that I quit law, the first thing they do (without fail) is say that they, too, know somebody, or know somebody who knows somebody, who did the exact same thing. This is not surprising, considering everything I said above. The Atlantic published an article the same month I quit my job at the firm about how the legal industry is one of the only fields that has a sub-industry helping people quit. As I read that article back in 2014 (which I rediscovered surprisingly easily with another google search), the line that stuck out to me was that a “law-firm associate consistently ranks at the top of unhappy-professions lists despite starting salaries of $160,000,” and that “law firms experience significant yearly associate attrition.” The attrition part did not surprise me at all. When I left my firm after less than a year, I was the 16th associate to put in notice in the time that I was there. I had a list of them that I kept in plain sight on my desk, asking myself every day if I was going to be the next name on the list. My firm (which will remain nameless) was known to have a revolving door, and since it was not big law, they didn’t have to pay big law money but they expected big law hours. The problem with that was, associates would leave to go anywhere else for more money since they were already putting in the time.

I learned through the grapevine that my firm was notorious. Unfortunately, my real “come to god” moment about this terrible place came from Glassdoor reviews, the first of which was posted 2 months after I quit. THANKS FOR NOTHING. But really, it did make me feel a little bit better to know that I was not alone. My firm’s average rating is currently 1.5 out of 5. A mere fourteen percent would recommend to a friend. When I quit, I put on alerts so that I would get an email every time someone posted a new review. Over the years, these have provided me with much-needed comic relief. Some of my favorite review titles include “slavery for low pay makes me cranky,” or “Are you kidding me?” or “Avoid at all costs,” or the very honest “Horrible!!!!!!!!!!!!!!!” (there are really 15 exclamation points). But my all-time favorite title is “Run”. Short, sweet, leaves no room for misinterpretation. That doesn’t even touch the tip of iceberg of the actual content of the reviews. A few highlights: “Cons: Associates are overworked, underpaid, and generally miserable.” “Pros: It’s close to the train station.” “Pros: There are no pros to this place.”

My firm may have been particularly bad, but as they say, one bad apple spoils the barrel, and I wasn’t about to try my luck with another law firm and just hope that it was different. Again, I only speak from my own experience, but as you can see from all of the articles above, I am not alone. I recently had a conversation with my boyfriend about how likely it is that I will return to the legal field. I said 90% no way. He said “that’s crazy high, that’s 1 in ten chance that you will go back. I would have put it at 97% or 98%.” He is probably right. Why would I put myself through that again? I may return to the legal field someday, but most likely not as a lawyer.

I can talk about those miserable 11 months all day long, but if you are currently working for a firm, you have probably already wasted .3 hours of your billable time reading this (if you round up!), so I will save the story of why I went to law school in the first place for another time. The answer is complicated, and it’s embedded in a very complicated throne of lies that were fed to me for years. If you have gotten through this whole post and you are still considering going to law school, you are hopeless. Go spend some time on Glassdoor and google “don’t go to law school” some more. Do not pass go and do not collect $200 (or $200,000 in loans).

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