Real New Yorkers: 160K Deep in Student Loan Debt

We’re all about living a financially healthy lifestyle, but no one is perfect and we feel that one of the best ways to get inspired to spend well, save money, and not get so overwhelmed about your financial situation that you go totally haywire is to commiserate with others.  Hence the emergence of a new series where we speak to real New Yorkers about their financial woes and how they’re dealing in a city that doesn’t bode well on the pocket.

Our first interview is with Rachel Kramer Bussel, a Brooklyn based writer and editor, who took on a whopping $160K in student loan debt over 10 years ago.  We spoke to her about how this debt affects her day to day living and future plans of having a child.

What inspired you to go to law school?
I was a poly sci major and I was always interested in law, as opposed to going into politics.  So, I thought I’d go into law school and maybe study constitutional law and be this lawyer/activist type of person.  I was interested in feminism and womens’ right and first amendment stuff at the time, but I was 20 years old.  Now looking back, I’m 33, I didn’t really have a solid grasp on what a lawyer actually does.

How much money do you owe in student loans total?  And how much for just law school?
Well, I don’t know exactly.  I paid off my loans from college which was only like 10-15K, because I got help and I went to school in-state.  For law school, I think the total was $160,000 plus interest.  At one point, I calculated that I was paying $16 a day in interest and that was back in 1999.  So, I don’t know exactly how much interest I’ve paid.  I’m down to 58K — I’ve definitely paid 100K plus interest, but most likely more than that.

I think when you owe that much money, you sort of lose track of what money is.  But I think I value it more now.  Sometimes I feel like, how badly do I really want to do what I do now?  [But] when I look at it now, I’d still rather do it like this, and pay what I pay.  I think for me, part of what sucks, is that I didn’t finish, so I’m paying all this money for a degree that I didn’t get.

I’m not poor, but I’m definitely not doing as well as I would be had I not gone.  [The balance is] better now, but if I’d only been paying the minimum all this time, I’d really be screwed.

How does having this much student loan debt affect your daily lifestyle?
It doesn’t affect my day to day so much.  I don’t live totally frugally — I mean I travel and I just recently joined NYSC.  There was a time, though, when I was just so obsessed with it — I logged onto Sallie Mae every day to check my balances.  I think it affects some of my drive to edit a lot of books because I have to keep working really hard until they’re paid off and in a way, I think that’s good for me because I keep coming up with ideas that will make me money, but also advance my career as a writer.

Has being in debt and living in such an expensive city caused you any major stress or anxiety?
Sometimes.  It depends.  Certain days I’ll just feel really overwhelmed by it — like, wow, I’ve paid 100K and what do I have to show for it? But for the most part, I just wanna keep working towards paying it off, and hopefully then I’ll be able to start saving some money.

And, I don’t know, I try not to let it overwhelm me.  I think if you start thinking like that, it just becomes pointless.  I would definitely advise people who are thinking about grad school to really think about it.   [Taking on debt] was sort of abstract for me “I just signed off for 40K [in loans]“.  I didn’t really have a sense of how much I’d have to work to earn enough to pay it off.  I think it’s hard sometimes in New York, because it can be a hard city to save money.

But sometimes it does make me worry — I’m 33 and I want to have kids.  I feel like if I can’t afford to pay off a student loan, how can I afford to pay for a child?  Hopefully I’ll figure it out in a few years.

Do you think that college advisers and counselors are effectively advising students to take logical career paths?
I don’t know — I don’t even really remember who I met with.  I was very convinced that I wanted to go to law school.  I had graduated college in three years, partly to save money, so in my case, it wasn’t something people pushed me into.  But I do think a lot of people go to grad school because they don’t know what they want to do.  I think it’s a good idea to work and make money until you know what you want to study or do.  And people who have an idea of the real world or working world, are going to bring something to grad school that people just out of college aren’t.

Did you feel pressured to go to a top school like NYU because you thought it would help you in your future career?  And has it?
No, it was just the best school that I got into. It was hard to be so young and studying all the time with all of the distractions that New York has.  I think if I had gone somewhere else, I’d have probably finished.  But as school went on, I felt really out of step with my law school peers — they were very focused and knew what they wanted to do, and I didn’t.  It was a very tough time in my life.

I’ve always thought that high school counselors always overstressed how important attending a top tier school is, and I don’t agree that that will always put you ahead of the game in terms of beating someone out of a job.  What has your experience been with that?
I think it’s becoming increasingly like that.  I could have gone to my state school, Rutgers, and it would have been much cheaper.  But so many of my high school peers were going, and I just felt like it’d be an extension of high school.  I think the idea of top schools are where you need to go are exaggerated, because ultimately it’s what you’re going to do with that.  I think you can go pretty much anywhere, and if you stand out, and make a name for yourself and do well, it won’t matter as much.

How long do you think it’ll take you to completely pay everything off?
I’ve given myself til 2033.  It all depends on if my novel (coming out in 2010) sells well, then it could potentially be sooner.  Once I get under the 20K mark, I’ll feel better.  Now it still feels really daunting.  Sometimes I get too into it, and try to pay too much.  I have to make sure that I don’t go too crazy with it.

I actually declared bankruptcy a few years ago, I had 30K in credit card debt and that felt much more debilitating.  The way credit cards do their fees, if you’re making not much money, you’re really screwed.  I’d try to pay them, and was only paying them interest.  The more I realized I had nothing ot lose by declaring bankruptcy.  It kills all your credit cared debt.  I was able to get small credit limits within a year, which has helped me build my credit back up.  My credit still isn’t great, but otherwise had I not done that, I’d be totally overwhelmed with that and my student loan debt.

Photo credit:  Hilary McHone