Welcome to a bonus article!
We’ve been spending 2018 looking at a different theme each month in an effort to live a happier, richer, and more productive life. We’re still sticking to that plan and will keep our Tuesday/Thursday schedule for those articles, but I felt like I needed to add an in-betweener this week.
I tweeted about my student loans a couple days ago and it connected with people a bit more than I expected. As of this writing it has hundreds of thousands of likes, tens of thousands of retweets, and over 9 million views on Twitter. It also got screenshotted by other people and ended up on Instagram and the front page of Reddit.
I graduated from law school 6 years ago with $250,000 of student loan debt. But after years of hard work and tens of thousands of dollars of payments, I can officially say that I now owe $315,000.
— Optimize Your Life (@MattLaneWrites) September 18, 2018
Much of the reaction has been either laughter, which was the goal, or support, which is great. There have also been a lot of questions and comments as well as more anger than I am used to.
I couldn’t keep up with and respond to all of the comments and mentions, so I thought it might be worth taking time to address some of the more common reactions here.
Debt and Suicide
First, I want to briefly touch on a serious topic. A lot of people responded with variations of “I would kill myself if this happened to me.”
I know that these were said as a joke and I’m sure a lot of it was hyperbole, but this is a serious problem and a real train of thought that lots of people in debt have. If you are having those thoughts, you are not alone. There are people that have been through the same struggles and want to help.
You’re an Idiot!
This is a response that I got a lot. Variations include “low IQ mongrel” and the somewhat more polite “uneducated on financial responsibility.”
This is all based around the idea that I took on my loan debt because I didn’t know what I was doing and didn’t do the research on Return on Investment and/or the job market. Why else would I take on loan debt that I couldn’t repay?
The thing is, I did know what I was doing. I still do. I went to law school because it was a good match for my skill set and would be a good way for me to use those skills to help people. My plan was to finish law school and take a job in public service.
And I did! My loan balance is so high because instead of going to the private sector and taking a giant paycheck, I went into public service and took a much smaller one. Because of the smaller paychecks I signed myself up for the Public Service Loan Forgiveness (PSLF) program, which requires me to make payments based on my income. Once I make 10 years of payments while working in qualifying public service jobs, the loans will be forgiven.
Because my income is small relative to my loan balance, my income-based payments often don’t cover the interest that accrues each month. Thus the increasing balance.
Despite the craziness of those numbers, though, it won’t be a problem as long as I stick to my plan. I spend 10 years paying whatever the government tells me to pay and then the rest disappears.
This is Me
In defending myself from the last claim I made a statement that I regret making. I said that I had a plan in place, so I wasn’t the dumbass that people commenting thought I was.
The reason I regret this language is that it implies that people with huge debt without a plan are dumb. This ignores the many contexts in which people can stumble into huge debt through no fault of their own and assigns a moral judgment to people without knowing their story.
This matters because one of the most common reactions I got was some variation of “This is me” or “I’m with you.” I have a plan and a path and a light at the end of the tunnel. Lots of people don’t.
We’re told that we need an education to get ahead. Many people see it as their best route out of poverty or into the middle class. And maybe they’re right. But lots of things can get in the way that cause problems.
A huge number of people take out loans to pay for college and then for one reason or another need to drop out. They’re stuck with the college debt without the college job opportunities. Still more end up with degrees in fields that don’t have jobs available or that don’t pay enough to cover cost of living and loan payments.
Maybe your geographic options are limited by needing to take care of a sick parent and there aren’t a lot of jobs in your area. Maybe you need to pay to support a family member. Maybe you get divorced. Maybe you get injured and can’t work. Maybe you get a big stack of medical bills.
Any number of things that are outside of your control can impair your ability to pay off your loans and lead to a ballooning debt. There are a lot of people out there who face this reality.
I knew that from the statistics, but it became a lot more real when a lot of them told me themselves.
This Will Be Me
A sibling of the “This is me” response is “This will be me.”
Some of these responses came from people that were already halfway through law school. Some, however, came from people who hadn’t even enrolled yet.
Having spent three years in law school, I know a lot of people that went to law school. It may sound obvious, but the people that were the happiest were the people that actually wanted to be lawyers.
A crazy amount of people have told me over the years, “You can do anything with a law degree!” Maybe. But you can do a lot of things without a law degree, too. And those things don’t require taking on a huge amount of debt.
I don’t know if law school is the right choice for you. Maybe it is. Maybe it isn’t. But make sure that you actually want to be a lawyer before you commit and you’re not just doing it because a law degree seems prestigious.
You Went to the Wrong School!
A lot of people responded by telling me that I should have gone to a cheap school rather than an expensive one. This is bad advice when it comes to law school.
I have seen convincing arguments that you get better value out of a state school or a community college for an undergraduate degree. I think that makes sense for a lot of people.
When it comes to law school, though, lower ranking schools don’t carry nearly as much value. I haven’t done this research since I was looking at schools a decade ago so I don’t have the statistics off hand, but in general the percentage of graduates working as lawyers gets smaller as you slide down the rankings. If you graduate from a lower ranking law school, you’re far more likely to graduate with law school debt but no job prospects in law.
I went to the top law school in the country for my little niche. That degree got me a great fellowship that gave me exceptional work experience and landed me a really good job. I would not have been able to follow that path from a low-ranking school. I would not have even been eligible to apply for the fellowship.
So, yes, I went to a school that was more expensive than other schools and I graduated with a higher debt load. But that is what opened the door to my current life and my current life is pretty great.
Nobody Should Go To College!
Right next to the people telling me I should have gone to a cheaper law school was a whole string of people saying “This is why nobody should go to college.” Relatedly, I was told that I should have gone to trade school, should have become a welder, should have become an electrician, and should have become a union pipe fitter (among other professions).
First: Anytime you assign one life path for everyone, you’re probably wrong. Don’t say that nobody should go to college. Don’t say that everyone should go to college. A world without tradespeople is not a good place. A world without doctors is not a good place. Variety is good. Do what works for you.
Next: Very little of my debt is from my undergraduate degree. If I had gotten a job straight out of college, I likely would have paid off my loans by now. Using my law school loans as a reason to tell others not to go to college is nonsensical.
Figure out what works for you and then do it. Everything else is just noise.
So You’re Making ME Pay for Your Debt?!
Of the folks that dug into the thread long enough to recognize that I was in the PSLF program, quite a few were pissed off. The basic argument was that loan forgiveness means that taxpayers are picking up the tab and that if I were an upstanding citizen I would carry my own burden.
There was at least one person who said that I was basically a welfare recipient. (As a side note, can we stop throwing shade at people that need government assistance? That’s what it’s there for. There’s no shame in leaning on the safety net while you pick yourself up.)
A defense of Public Service Loan Forgiveness was already on the calendar for early October, so I will leave the long version of this discussion for then. Here’s the short version:
I want to work for the public. The public sector pays lawyers a lot less than the private sector. I would not be able to make my loan payments with a public sector job without PSLF and would instead be forced to work in the private sector.
Whatever, right? But that means that nobody with any significant level of debt would be able to work in the public sector. Public sector lawyers would need to be entirely people with rich parents or people who have worked in the private sector long enough that their loans are paid off and decide they’d like to voluntarily take a 60% pay cut. That’s not a great work force to select from and is an unsustainable model.
As to the indignation of people who don’t want their tax dollars supporting loan forgiveness and would rather the free market rule, I assume they’ll support the government eliminating PSLF and paying market rate for lawyers instead. I look forward to their letters advocating for my 150% raise next year.
The American Education System is Crazy!
I got a lot of responses from folks in other countries that were dumbfounded that someone could wrack up the kind of student loan balance that I have. Folks talked about free college in their countries. They talked about student loans at interest rates of 0.13% or 0.8%. They talked about programs where you don’t have to start paying anything back until you reach a certain level of annual income.
Basically, the rest of the world seemed baffled that the United States puts such a high burden on students whose parents don’t have the money to pay for school for them. Why wouldn’t you invest in the future of your country by helping the next generation better themselves?
I have no good answers to these points and no defense of our current system. The ease of advancement in society should be determined by what you can achieve rather than how much money your parents have.
How Did That Happen?
Income-based repayment where my amount due was less than the interest accrued many months.
What Was Your Interest Rate?
There are a bunch of different interest rates, but 6.8% is the median and probably close to the average.
That’s Crazy! Fed Rates Are So Low Right Now!
You Should Consolidate and Get a Lower Interest Rate!
Oh, goodness, no! Consolidating would get me a lower interest rate but I would lose eligibility for PSLF. Save a penny, lose $300,000.
You Should Follow Dave Ramsey!
What if PSLF Goes Away?
Then I’ll have to figure out a new plan. I watch Congress closely and I can’t imagine them changing the law to take away PSLF for people that are already enrolled. I can very much see them putting a cap on forgiveness for future enrollees (President Obama proposed this during his tenure) or eliminating the program altogether for future enrollees (President Trump’s administration proposed this), but taking it away from people that are already in the program seems very unlikely.
That said, anything could happen and I will cross that bridge when and if I need to.
I got called a liar in a handful of different ways, including “What a fucking asshole fraud,” because the Internet is a friendly place.
Why would I make this up? I don’t understand.
Law School Isn’t Expensive Enough to Cause That Much Debt!
Sure, if you’re just looking at tuition. Once you add books, supplies, and especially room and board, things can get expensive quickly.
Just Stop Paying!
Oh, yikes. No thanks.
I wasn’t! In the thread I responded to questions by talking about how I am happy with my life and I stand by the choices I’ve made. I thought throwing out those numbers in a light-hearted manner would be funny to the rest of personal finance twitter. (And in my defense, I think the early comments show that I was right!)
What is the Point of This Tweet?
What is the point of any tweet?
Join the Conversation!
I’ve muted that tweet thread, so I probably won’t see your comments. There are also over 800 direct responses and who knows how many other responses buried in there, so I probably will never see a lot of them.
On the other hand, far fewer people will take the effort to come comment here. And I’d imagine not many of them will make it to the end of this 2500 word article. So if there’s anything else you want to know, feel free to ask or comment or cuss me out here and I’ll give you a response.
I’d also love to hear other people’s reactions to all of these comments. What are your thoughts on PSLF? What are your thoughts on the American loan system in general? What were your thoughts on the stream of reactions to the tweet? Let us know in the comments!