How to Survive Student Loan Debt

September 12th 2015

Laura Entis

College and debt—these days the two go together like peanut butter and jelly: where there’s one, there's a good chance you'll find the other. In 2013, seven in 10 college seniors graduated from public and nonprofit colleges with student debt, with an average debt load of $28,400. (It’s only rising: for this year’s graduating class, the average is $35,051.)

At the same time, a college degree is increasingly necessary—skip it, and lifetime projected earnings plummet. Of course, not all majors are created equal. A recent report by Georgetown ranked 132 college majors, and found that while engineering majors of all stripes typically earn six-figure annual salaries, social work and education ranked among the 10 lowest-paying majors.

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With that in mind, what’s the reality of entering a tough—but often rewarding—field that typically doesn’t pay much, while saddled with student debt? We spoke with three recent grads to find out.

1. The elementary school teacher

Current position: Teaching intern at the Chestnut Hill School

Student debt: A little more than $28,000

Education: B.A. in English from Villanova

Monthly payments: $300

Kathleen Abate graduated from Villanova in 2012. As an English major, she was unsure what she wanted career-wise, until she realized that all of her previous jobs involved working with kids. In her sophomore year she set her sights on teaching.

After graduation, she landed a job as a teaching intern at the Chestnut Hill School, an elementary school in Chestnut Hill, MA, just outside Boston. For the past few years, she’s taught kindergarten, although eventually she’d like to teach English or Language Arts to older-kids in middle school or, preferably, high-school.

Her current salary is $17,500, and because this salary is not a living wage, Abate works extra hours at the school. On a typical day she arrives at 7 AM and leaves at 6 PM, and she estimates that altogether she brings home $31,000 before taxes.

Abate lives with one roommate in an apartment very close to the school. At the moment, her financial situation is tenuous but doable: “It’s ok…I don’t know how, but it is,” she says. However, in January her student loan payments are scheduled to go up by $150 per month, an increase that worries her because it leaves little room in her budget for unexpected expenses, such as healthcare or moving costs.

Because the job market for teachers in Massachusetts is competitive, she’s considering going back to school for a master's degree in education, although the prospect of incurring more debt is a daunting one. At the moment, she’s looking for programs and researching available scholarships. If she lands a job as an associate teacher, her starting salary would be $40,000.

She still loves teaching and doesn’t regret her decision to enter the field. Frequently “just being with the kids” is the best part of her day. But the low salary and uncertainty of growth opportunities at the school where she teaches have left her feeling "more burnt out now than when I started.”

For students entering college who think they may want to teach after graduation, she recommends applying for relevant internships in order to avoid having to return to school to land a full-time teaching position. “The hiring rate for students who have experience, versus students who do not is much better.” Unfortunately, student debt is unavoidable. “If you have to take loans, you have to take loans, she said. "There’s nothing you can do about it.”

2. The adoption counselor

Current position: Family building associate at Dr. Bukky & Associates

Student debt (from undergrad and grad): $140,000

Education: B.A. in Psychology from Drexel University

Graduate: M.A. in Mental Health Counseling from Yeshiva University – Ferkauf Graduate School of Psychology

Although acting had been Kimberly Epperson's focus in high school, she decided to pivot careers. Beyond acting, Epperson had also been drawn to psychology courses. After receiving a B.A. in Psychology from Drexel University, she applied and was accepted to the Ferkauf Graduate School of Psychology at Yeshiva University, in New York City.

“Financially it was a bad decision to go there, because they don’t offer any aid,” she says. “But I said screw it, because I had my undergrad paid for by my parents and I wanted to get the education I wanted.”

Altogether, she ended up borrowing $140,000 to finance her education. The number is eye-popping, but after talking it over with her boyfriend—who also took on student debt to pay for law-school—she was confident it was the right decision. “We’re both very aware that the money we’ll be able to make in the future … it will make the start of our careers harder, but right now it’s not hurting us.”

This is largely because Epperson has taken advantage of an income-based repayment plan—available for students pursuing a career in social work—in which she pays the federal government 10 percent of her salary for 10 years, after which her debt is forgiven. While her boyfriend, a corporate finance lawyer and senior vice president at Citi Bank, pays a substantial amount in student loans each month, at the moment Epperson’s payments are virtually non-existent.

In June, she began her job as an adoption counselor at a small, three-person agency. While a few of her clients pay on a sliding scale, for the most part they are well off. “I don’t take insurance, and I don’t have a low fee.”

Epperson is the first to admit she’s lucky; she lives with her boyfriend, and his salary gave her a buffer to search for a job she wanted, as opposed to the first one that was offered to her (a position at an inner-city clinic, where she estimates she would be seeing “50 clients a week for $30,000 a year”), after she graduated last winter.

Despite her debt-load, she’s glad she returned to school for her masters. “I am big a fan of the current income-based loans,” she says. “I don’t think the issue is loans, I think the issue is what schools are charging for an education.”

Epperson is completely fine handing over 10 percent of her salary for the next 10 years, but she remains perplexed by Yeshiva’s whopping sticker price. “It feels exorbitant. I don’t understand where all the money is going,” she says. She wishes more of it went to her professors, the men and women she credits for preparing her to be a working therapist. “The last thing I would want is for my professors to make less," Epperson said. "The ones I respect, they are hardworking practitioners—they are not millionaires. So I don’t fully understand where my $60,000 a year went.”

3. The family counselor

Current position: Psychotherapist at the New York Psychotherapy and Counseling Center

Student debt: More than $120,000

Education: B.A in Psychology from City College of New York

Graduate: M.A. in from Yeshiva University – Ferkauf Graduate School of Psychology

When Yanira Roque received her diploma from Yeshiva University last winter, she had a job lined up as a psychotherapist at the New York Psychotherapy and Counseling Center, where she had interned her last semester at school. Relieved to avoid a grueling job search, she happily accepted.

Roque sees a range of patients, age three and up, for a buffet of issues including anxiety, depression, ADHD, and academic problems. Most workdays are crammed with anywhere from five to 13 individual and family sessions. The majority of her patients are low-income, so it can be hard for them to open up about emotional issues, she says. “They’re more concerned about jobs and every day kind problems—often the last thing on their minds is sitting down with someone every week to talk about their depression.”

Despite these baked-in obstacles, Roque loves her job: "I like to say it was calling."

Roque majored in psychology at the City University of New York on a full merit scholarship. Unfortunately, the money didn’t cover rent and living expenses; altogether, to cover them, she borrowed around $25,000.

Upon graduating, she wanted to enter a Ph.D. program but didn’t have enough experience. So she applied and was accepted into Yeshiva University’s two-year master's program. The university does not offer scholarships, so Roque took out a total of $100,000 to pay for classes and cover her living expenses. She moved back home with her parents in Queens and worked part-time to save money.

Her job doesn’t pay a fixed annual salary; instead, Roque is classified as a contractor, and her pay is dependent on the number of patients she sees each month. She estimates that she will take home around $50,000 a year, but the lack of security is a concern. “I am working in a cheaper service field, and it’s not a private practice—if patients aren’t walking through the door, I’m not getting paid.”

At more than $120,000, her debt load is substantial. But while Roque does worry about keeping up with payments, while also paying for rent, car insurance, and other living expenses, she says she is not crushed by the number because she has applied for an income-based repayment program. If her application is accepted, like Epperson, she will pay 10 percent of her salary to the U.S. government for the next 10 years, after which her loans will be forgiven.