Author Topic: The $124,421 Man - How to pay off a mountain of student debt in six (long) years  (Read 2523 times)

FiftyIsTheNewTwenty

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A nice story:

https://medium.com/matter/the-124-421-man-56e3b84a321

If he can keep going, he'll be quite comfortable by 40.

Slee_stack

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It is a good story in terms of killing debt.

I felt weird reading it because while I agree he did a very admirable job saving.... boy-oh-boy what a bad decision on the schooling.


I get it.  I also regret the choice in school I made years ago.  Thankfully, it wasn't as clown ridiculous as 'Tufts' tuition...but I still could have cost avoided a significant amount of it.

Is it a status thing? 

Quit caring about the 'brand' on an education.  Buy the best value education.  Period.

His parents had great intentions.  Unfortunately, I also think they unwittingly saddled their son with a grossly unnecessary financial burden out of the gate.

This seems to be a woefully scary plan for many today...buy the 'best' education you can 'afford'. 

Unfortunately people interpret this as 'Biggest Name Brand' that you 'can get a loan for'.  Ugh.

KTG

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Wow I never had a loan like that except for my house. I can't imagine looking at a statement and seeing that kind of number anywhere else.

I was in pretty bad CC debt prior to the Great Recession, and I paid it all off. It took a lifestyle change, much like what this guy did, and I stuck with it and sent everything I could to the banks. At one point I was rejected trying to make a 6th payment in the same month cause the max was 5 lol (I literally send any scraps I could as I got them).

When I finished it and announced what I did, peeps came out of the woodwork asking me how I did it and how I could help them. I explained it to them, and when I said you will have to give up some things, I could see the sell wasn't working.

Kudos to this guy. Same about what college is costing these days. I mean if you look at the numbers now, from where they were 20 years ago, imagine what it will be like in another 20. I am not sure it will be sustainable.

mm1970

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It is a good story in terms of killing debt.

I felt weird reading it because while I agree he did a very admirable job saving.... boy-oh-boy what a bad decision on the schooling.


I get it.  I also regret the choice in school I made years ago.  Thankfully, it wasn't as clown ridiculous as 'Tufts' tuition...but I still could have cost avoided a significant amount of it.

Is it a status thing? 

Quit caring about the 'brand' on an education.  Buy the best value education.  Period.

His parents had great intentions.  Unfortunately, I also think they unwittingly saddled their son with a grossly unnecessary financial burden out of the gate.

This seems to be a woefully scary plan for many today...buy the 'best' education you can 'afford'. 

Unfortunately people interpret this as 'Biggest Name Brand' that you 'can get a loan for'.  Ugh.

I related a lot to this. My early years in DC were similar - 3 people in a 2BR house (I slept in the basement).  Even down to the chicken fingers and occasional fries.  And sandwiches for lunch.  And paying off my loans (which were much smaller).


It was a good story, and I really cannot blame him too much on the choice of college.  I was the first in my family to go to college.  Who was going to tell me it was a bad choice?  I went to a Tufts-like expensive private school.  I got financial aid.  They only "took away" financial aid from me once.  I also applied early decision.  It's a difficult choice to make.

But notice - the loans were mostly in his father's name.  Son wasn't necessarily "saddled", though he was.
The Tufts status DID help him out.  Was it worth the difference in price tag?  We'll never know.

I think it's pretty important to think critically about the brand of the college and the expense and the loans ahead of time.  But recognize, the typical 17 year old isn't equipped with the maturity to do so.  And in my generation, and this guy's, many of the parents aren't equipped either, simply because they themselves didn't go to college.  And people don't talk about money.

So you see what everyone else is doing, but you don't know how much debt is crushing them, or if they had a wealthy grandparent.

In any event, the summer before college, after I'd accepted long before and was looking at borrowing about 1/3 of the first year, my  mother started hyperventilating and talking about the expense.  Note: she made $9k a year, FAFSA set her amount at zero.  I sent in a bunch of applications for ROTC, the Navy called me first, and that's all she wrote.  I ended up with a 3 year scholarship for tuition, books, and fees, and ended up borrowing less each each for room & board.

I hate to turn this into the haves and the have nots, but that's how higher ed works.

When it comes to brand name schools, you've got poor kids who get a lot of aid (me), rich kids whose parents bankroll them.  The middle class is pretty much screwed in many ways.  They aren't getting aid and they can't afford to pay it and too many choose to saddle themselves with debt.

mathlete

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I get it.  I also regret the choice in school I made years ago.  Thankfully, it wasn't as clown ridiculous as 'Tufts' tuition...but I still could have cost avoided a significant amount of it.

Is it a status thing? 

Quit caring about the 'brand' on an education.  Buy the best value education.  Period.

I guess it depends. If your goal is to become a high earning, automaton-like employee who keeps their head down and buys a crap ton of stock while working towards retiring early, then a value school is probably your best bet. No hate here, it's what I did/am doing.

But if you have aspirations outside of that, you may be limiting yourself. By choosing a value school, you'll be surrounded by... people like me. All business. There to get the degree to get the high paying job and do their own thing. You may be better off going to a selective (expensive) private school where you can surround yourself with other, more traditionally aspirational high achievers.

mozar

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Quote
I guess it depends. If your goal is to become a high earning, automaton-like employee who keeps their head down and buys a crap ton of stock while working towards retiring early, then a value school is probably your best bet. No hate here, it's what I did/am doing.


This is the route I took. Sometimes I wonder what my life would be like if I had chosen a college that was a better fit for me, not just a place that looks good on a resume.

swampwiz

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It is a good story in terms of killing debt.

I felt weird reading it because while I agree he did a very admirable job saving.... boy-oh-boy what a bad decision on the schooling.

I get it.  I also regret the choice in school I made years ago.  Thankfully, it wasn't as clown ridiculous as 'Tufts' tuition...but I still could have cost avoided a significant amount of it.

Is it a status thing? 

Quit caring about the 'brand' on an education.  Buy the best value education.  Period.

His parents had great intentions.  Unfortunately, I also think they unwittingly saddled their son with a grossly unnecessary financial burden out of the gate.

This seems to be a woefully scary plan for many today...buy the 'best' education you can 'afford'. 

Unfortunately people interpret this as 'Biggest Name Brand' that you 'can get a loan for'.  Ugh.

I was a high-aptitude-test-scoring high school student (top at my school in the ACT, only tied with the valedictorian), and my college guidance counselor couldn't believe that I wasn't considering (pick your big name expensive school) and simply enrolled at State U.  As far as I was concerned, I did not see a discernible difference between State U and any other state's State U nor any private school not in the Ivy League.  I was also going in for engineering, and State U was going to be more than adequate, with only the CalTechs or MITs being a discernible difference, but at the expense of a grinding existence and no fun.  And in any case, the Ivy League schools did not have the very nice scholarships for middle class students, so it was going to cost me a bunch, and I didn't want to spend (or have my parents spend) that kind of money.  State U gave me super cheap tuition and a nice scholarship - and an hour & half ride home - and nice scholarships as I went through my program (a string of 4.0 semesters in mechanical engineer will get those checks coming), so I didn't have to take out any loans or get a job, and the money my parents had set aside I could use for general spending.

swampwiz

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I was in pretty bad CC debt prior to the Great Recession, and I paid it all off. It took a lifestyle change, much like what this guy did, and I stuck with it and sent everything I could to the banks.

Rather than work hard to get out of my 6-figure unsecured debt (built up over a 2-decade period by juggling low-interest deals) at that time, I decided to FIRE and used the Trumpian method (or at least the 7th Chapter of his method) to get out of debt, subtracting a negative $150K of debt from my portfolio, while keeping my even larger IRA, newly purchased cheap renovated home (I had been rendered homeless by a major hurricane a few years prior) in a depressed little town 1-1/2 hours from a major city center, beater car, a bunch of amusement toys (that had a very low "garage sale" value) and even my grand piano exempt.  So you could say that instead of "stuck with it and sent everything I could to the banks" I stuck it to the banks.
« Last Edit: February 18, 2018, 04:50:31 AM by swampwiz »

aspiringnomad

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It is a good story in terms of killing debt.

I felt weird reading it because while I agree he did a very admirable job saving.... boy-oh-boy what a bad decision on the schooling.

I get it.  I also regret the choice in school I made years ago.  Thankfully, it wasn't as clown ridiculous as 'Tufts' tuition...but I still could have cost avoided a significant amount of it.

Is it a status thing? 

Quit caring about the 'brand' on an education.  Buy the best value education.  Period.

His parents had great intentions.  Unfortunately, I also think they unwittingly saddled their son with a grossly unnecessary financial burden out of the gate.

This seems to be a woefully scary plan for many today...buy the 'best' education you can 'afford'. 

Unfortunately people interpret this as 'Biggest Name Brand' that you 'can get a loan for'.  Ugh.

I was a high-aptitude-test-scoring high school student (top at my school in the ACT, only tied with the valedictorian), and my college guidance counselor couldn't believe that I wasn't considering (pick your big name expensive school) and simply enrolled at State U.  As far as I was concerned, I did not see a discernible difference between State U and any other state's State U nor any private school not in the Ivy League.  I was also going in for engineering, and State U was going to be more than adequate, with only the CalTechs or MITs being a discernible difference, but at the expense of a grinding existence and no fun.  And in any case, the Ivy League schools did not have the very nice scholarships for middle class students, so it was going to cost me a bunch, and I didn't want to spend (or have my parents spend) that kind of money.  State U gave me super cheap tuition and a nice scholarship - and an hour & half ride home - and nice scholarships as I went through my program (a string of 4.0 semesters in mechanical engineer will get those checks coming), so I didn't have to take out any loans or get a job, and the money my parents had set aside I could use for general spending.

+1. Chose a free ride at State U over Ivy League, then received a free ride to a top private grad school. I think I’d have seen no discernible difference in my career trajectory had I paid for the Ivy League undergraduate degree considering I work alongside and manage some Ivy alums. But I did put a deposit down to hold my spot at the Ivy League school and at 17 y/o had to go against lots of “helpful” advice and my own expectations for myself to decide on State U at the last minute. It really could have gone either way, and I sympathize with those who went the crazy debt route.

fuzzy math

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I went to an expensive small liberal arts college my first year. Not a good value or education overall. Lots of entitled upper middle class kids doing some bad stuff and flunking out. The poorer people I knew there were on track to exceed $100k in loans by graduation.

Transferred to state U for my sophomore year and found that the bigger school offered way more variety in courses for my (science) major. I have no idea what my parents were thinking letting me go to that fancy school. They probably thought I'd be happy and were just willing to pay for it. Being a smaller school, I have not heard of it having much reputation nationally. They had a huge physical and occupational therapy program. Probably the same thing offered at state Us all over the country. No one says "wow, you went to expensive Catholic U and paid $100k for your nursing degree! Let's pay you twice as much!" And yet I know many nurses who paid close to $80k for their education.

DirtDiva

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Quote
I guess it depends. If your goal is to become a high earning, automaton-like employee who keeps their head down and buys a crap ton of stock while working towards retiring early, then a value school is probably your best bet. No hate here, it's what I did/am doing.


This is the route I took. Sometimes I wonder what my life would be like if I had chosen a college that was a better fit for me, not just a place that looks good on a resume.

Our son took the state school route, because we were those parents who made too much for any aid but not enough to bankroll him to a 50k school at that time, and we weren’t willing to cosign for 25-30k per year loans. He graduated debt-free.

Sometimes I wonder how his life would be different if he had surrounded himself with aspirational people and a school that looked better on a resume.

Malkynn

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Man...

This makes me so grateful for Canadian universities, which are all pretty much the exact same level of education, with really only appreciable differences depending on individual program resources. Even one the “worst” universities has one of the top engineering programs in the country. For most programs, you could pick your school based on mascot and you would still be making a solid choice.

I’ve gone to both the above mentioned “worst” school and then one of the “best” schools and they were pretty much identical in terms of quality of education and caliber of students. In fact, I preferred the “worst” school.

I can’t imagine being a parent and having to make that kind of decision if these crazy expensive schools really can have a possible significant impact on their future. That is so stressful.