'A waste of money': This Atlanta woman wracked up $311K in student debt for 3 degrees - and she's now stuck in a 'deep, deep hole.' Here's what Dave Ramsey says is holding her back

[P. Coonan]

Going to college used to give you a leg up. But many college grads these
days are finding they’re leaving school having dug themselves into a big
pit of debt — and facing starting salaries that barely keep up with their
living expenses.

And you can forget about that leg up in the job market. As of 2021, 31% of
workers with no more than a high school diploma earn more than half of
workers with an associate’s degree, according to analysis by Georgetown
University. (And 28% of workers with an associate’s degree earn more than
half of workers with a bachelor’s degree.)

But if they’re choosing not to use their qualifications, it can be even
harder to get ahead. Just ask Helen from Atlanta.

Loaded down with $311,000 in student debt from three different degrees,
Helen recently turned to financial pundit Dave Ramsey’s radio show, The
Ramsey Show, to get his perspective.

Ramsey’s not known for holding back when he has an opinion, so he gave it
to Helen straight: she’s “collecting degrees like a thermometer,” and she
needs a reality check.

Overeducated and underemployed
Helen says she has degrees in law, conflict management and information
technology. She admits that the conflict management degree was “a waste of
money,” while the information technology degree is now outdated. Her only
direct path to income would be her law degree.

However, Helen worked as a litigator for three years but abandoned the job
because she “hated it.” She’s now employed as a staff attorney at a non-
profit firm where she makes an annual salary of $85,000.

Unfortunately, that’s not enough to keep up with her debt. Helen says the
interest rates on her student loans range from 6.8% to 7.6% — and she also
carries a mortgage that raises her total debt burden to about half a
million dollars.

Helen’s at an intersection of two crises. Student loans weigh on roughly
43.6 million Americans, according to the Education Data Initiative, while
one-third of college graduates are working jobs that don’t require a
college degree, according to a survey from ResumeBuilder.com. Too much
debt and too little income due to underemployment are overlapping issues.

Fortunately for Helen, she has some options to rapidly boost her income
and escape this situation.

Read more: Thanks to Jeff Bezos, you can now cash in on prime real estate
— without the headache of being a landlord. Here's how

Getting the ‘size of your shovel’ up
Helen’s refusal to work as a litigation attorney has suppressed her
income. At the same time, her husband earns $50,000 (and doesn’t have a
degree to dramatically increase his income overnight) — and he has
separate debt, too. Ramsey summed up their key issue: “You have a deep,
deep hole and a medium-sized-to-small shovel. We need to get the size of
your shovel up, your income up.”

The income a legal professional can make varies, depending on location,
type of law and years of experience. However, according to the latest
report from the National Association for Law Placement (NALP), even entry-
level associates can earn as much as $215,000 in major markets. Helen’s
three years of experience should put her above this pay range.

Ramsey estimates Helen could make an additional $100,000 a year working as
an attorney and get rid of her debt in roughly three years. This, he says,
can serve as a temporary measure rather than a permanent career shift,
since she doesn’t enjoy the work.

To be fair, Helen isn’t the only person who doesn’t enjoy practicing law.
Lawyers are at high risk of feeling stressed, overworked and lonely due to
the high-stakes nature of their work, according to a study from the
University of Minnesota. Ramsey recognizes this but argues that “it’s less
depressing dealing with litigation than it is dealing with $311,000 in
student loan debt.”

He also recommends that the couple combine their debt and work together to
raise their income. Helen can still pay down her loans at her current
income — and without her husband’s assistance — but “it's going to take
you three or four times longer.”

https://moneywise.com/

[Governor Swill]

On Sat, 17 Feb 2024 02:13:50 -0000 (UTC), "P. Coonan" <nos...@ix.netcom.com> wrote:

>Unfortunately, that’s not enough to keep up with her debt. Helen says the
>interest rates on her student loans range from 6.8% to 7.6% — and she also
>carries a mortgage that raises her total debt burden to about half a
>million dollars.

That's her problem right there. She's overspending. With that much school debt, she
should have kept cheaper digs, lived cheaply and shoveled money at her debt as fast as
possible. Making 85K, she could live pretty well on half that and after taxes, put at
least 30k onto that debt burden. Instead, she's spent her money on lifestyle and allowed
the debt to balloon. Not to mention the larger amount she was earning as a litigater. If
you're good at something you should do it for a living for at least long enough to get
yourself out of hock and set up to do what you want.

That she took degrees in three fields and doesn't like any of them is also bad judgment.
She could have stopped with the IT degree, worked very profitably in that field until her
debt was paid. If she wanted a different career after that, fine, go for it.

Swill
--
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[Robert Youngdale]

*racked* up, not "wracked"

It's hard to feel much sympathy for this woman. No one put a gun to her head and
forced her to borrow.