Got my mind on my money and my money on my mind

Lindsay has loans.  A lot of loans.  So does her husband.  Between the two of them, these loans total about as much as a house. 


Where did they go wrong?



In 2008, just four years ago, Lindsay and her husband were debt-free.  The couple had just graduated college and were newly engaged.  They had big dreams, dreams they pursued - Lindsay, to medical school; her then-fiance, Doug, to law school.  Then came the debt.

Doug's loans covered only part of his tuition and fees, so Lindsay took out additional medical school loans to pay for Doug's law school at the lower interest rate - 6.8% instead of 8.5%.  Doug is now graduated from law school and has monthly payments of just under $1000.  When Lindsay graduates from medical school in a month those payments will more than double.  Their loan payments will cost twice as much as their rent.  It will take them over 10 years to pay off their student loans.

"It's stressful," said Lindsay.  "As frugal as we both are, it's still a constant thought on our minds."

Lindsay spent hours every week clipping coupons, and both cooked to save money.  The couple never almost went out to eat, not even on their anniversary or birthdays.  They lived at home for a year and a half and commuted until Lindsay's hospital schedule was simply not maintainable at that distance.  "We couldn't have done it cheaper," said Lindsay.

Now, others have begun paying attention to Lindsay and the millions of students like her.  Student debt has topped $1 trillion dollars, an amount that surpasses even credit card debt.  At UW-Madison, the Teaching Assistants' Association (TAA) held a campaign on Library Mall to raise awareness for this loan crisis.  According to the group, college tuition has increased by 400% over the last 30 years, which has far outpaced inflation.

Signs for 1T on Library Mall

Politicians, too, have begun to pay attention to the issue.  At a recent engagement at UNC-Chapel Hill, President Obama told students that he and Michelle had mountains of loan debt.


"Check this out, all right, I'm the President of the United States - we only finished paying off our student loans about eight years ago," said Obama.  "I didn't just read about this," he continued - a jab at super-rich Romney.


Obama's plan includes pushing Congress to extend Stafford loans, and Republicans say they agree.    So what's the problem?

How do we pay for it?

There is no consensus.  Obama says his Buffett rule, a plan which would raise taxes substantially on the rich, would offset the cost.  Republican presidential candidate Mitt Romney has embraced Obama's student loan proposal, but members of Congress say it's just not reasonable.  An estimated $6 billion cost would be added if low-interest rates are extended, which "isn't affordable."  Romney has not yet offered specifics on how he would pay for these reforms.

Either way, Congress must act by July 1, or loan rates will double.


In a legitimately cool effort to make his policies interesting, Obama joined late night host Jimmy Fallon to "slow jam the news," touting his views and policies.  (The link directs you to the video, but it's so good that I'm also going to post it here:)

Is this just the newest issue on the campaign trail, or will actual efforts be made toward student loan reform?  Even when both presidential candidates agree, they disagree.


Amidst claims that a student should work during school to supplement their loans, Lindsay sighs.


"Doug worked summers and did a semester of work study, and I worked the summer between my first and second years doing research," she said.  "But it never even occurred to me to have a part time job."  In her third and fourth years, Lindsay worked 60-80 unscheduled hours a week.  She worked weekends and nights in hospitals and clinics.  She attended every class in medical school, went to labs on weekends, and studied 8-10 hours a day.  "It is a job."



For now, Lindsay will continue pinching pennies.  "A $3 cup of coffee is going to be $5," she told me.  "You're spending more money than you think you're spending.  Everything you buy, you're paying back twice as much over time."


Things have gotten out of control, says Lindsay.  "We tell students that they have to go to college and be educated to succeed, but we put all these barriers in their way."  For now, her husband is earning money in a one-year position before the couple moves to the state where Lindsay was matched for her residency.  The uncertainty of Doug's job, finding an apartment within their budget, and trying to earn enough money to pay back their loans and also live on, is a strain.


Lindsay never complains about her loans - this was her decision.  Even so, the financial burden on the couple can be stressful.

"Getting an education is important, and one of the prices is having student debt and loans.  But it should be a manageable amount."


Keep the conversation going: What do you think about student loan debt?  Should the government step in?  If so, how should they pay for it?