Last November, I ran a marathon. Specifically, I ran the New York City Marathon.

For those of you thinking “she’s a lunatic,” I can only respond that running a marathon is much like paying off debt. Unless you’re trying to be Paula Radcliffe, there’s a lot to be said for the slow and steady approach. I reached the finish line in under five hours, but it took six months of training and some tedious long runs.

Unless you inherit a pile of cash, paying off a large pile of debt takes a lot longer than six month. This is why everyone should approach education loans with caution.

Because unlike a marathon, you can’t drop out. Student loans are almost never wiped away in bankruptcy filings. They must be paid before you put food in your mouth (or your child’s mouth) or shelter over your head. Sometimes you can take a vacation from paying your loans through forbearance, but guess what? That costs you too. Interest continues to accumulate on those loans until you decide to get serious about them.

If you’ve taken private loans to pay for college, you may forfeit the ability to take a vacation from paying them. If you do, you’re likely to end up paying a lot more than you originally signed up for.

So evaluate those private loans carefully, and make sure that the end result is worth taking the risk. If you’re going to come out of school making $40,000 a year in annual salary, you should not be taking on twice that amount in loans. Doing a little math can save you a lot of heartache down the road.

If you’ve already taken those loans, though, there’s no choice but to tough it out. Or leave the country. According to CNN.com,

To date, there is about $60 billion in defaulted student loan debt according to Chris Lang of the New York-based debt collection agency, ConServe. But while skipping town to avoid paying student loans isn’t very common – Lang estimates that only about 2% to 4% of delinquent student loan debt is owed from students abroad – for some, it seems like the only way out.

Honestly, for “Chris,” the guy interviewed for this article, staying abroad is probably the best option.

Chris (who doesn’t want his last name used) graduated with about $160,000 in student loan debt with a master’s degree in music.

“At the time I thought I could handle it. I thought the most I’d be paying was $600 a month,” he says.

But his payments were $2,400 a month. So Chris started looking for jobs overseas. He thought he’d be able to earn more and pay off his loans. But it didn’t turn out that way. His salary was even less than what he was making back home.”

Chris’s payments for his education are far beyond what most music grad students make in a single month, much less leaving anything for food or rent. Now, Chris doesn’t appear to have been particularly analytical about the amount of debt he was taking on or the returns he could expect on is education investment. This was not smart. But neither is a system that penalizes students for seeking degrees with no chance of escape the debt they incur along the way.

For many people, the amount of debt taken on during college or grad school determines their options for the rest of their lives.

For most of us, paying down student debt is going to be more time-consuming than running a marathon. Trust me – paying down $12,681 in student loan debt has taken a lot longer than it took me to train for and run a marathon. And I still have over $18,000 to go. But having done the marathon, I know I can pay this off.

I read a lot about personal finance. Ever since taking a class as a high school student about personal finance, I’ve been one of those weirdos who actually enjoys budgeting. When you don’t have a lot of money it’s a challenge; when you do, it’s even more of a challenge. (More on this in a later post.)

The best personal finance writer in existence is Liz Pulliam Weston, hands down. You don’t have to agree with me, but I’ve read her work for years now and I think that she has a wonderful ability to balance deep analysis of complex problems with compassion for fallible human nature. But her real talent lies in her ability to do both of those things and still pick readers up by the collar and give them a swat in the behind to get moving – in articles of two pages or less.

She’s a genius.

Anyone – students, parents, would-be grad students – thinking about student loans should first read Liz’s article, “How Much College Debt is Too Much?”. I wish I had before making my college selection,  especially since I didn’t have a very good sense of what it was going to cost me to attend that “experiential” school.

Had I known I would wind up $31,000 in debt, I might have reconsidered.

As Liz shows, going into serious debt for college degrees that don’t pay well make life pretty difficult long after that last keg-stand.

At 8%, each $1,000 you borrow will cost you about $12 a month to repay, assuming a 10-year loan. If you’re a student and you borrow the maximum allowed under current federal student loan programs […] your monthly payments will be around $276.

That payment level should be manageable if you’re making at least $33,000, which means you’d better be an accounting or business major. Starting salaries in those fields range from about $36,000 for business administration types to $43,000 for management-information-systems graduates.

Liberal arts grads, on the other hand, generally have to settle for salaries under $30,000 to start.

Beginning pay for psychology majors is about $26,000, while English majors are getting about $28,000. At those pay levels, you’re better off borrowing no more than about $18,000 over your college career. [emphasis mine]

Did ya get that? Tech jobs pay. Business administration and accounting pay less well. Forget psychology; even English grads do better. And I had $31,000 in student debt and was very lucky to find a job paying exactly that starting salary. In the most expensive city in the country. Was I an idiot or what?

Don’t be like me.

If you’re looking at attending one of the most expensive colleges in the country, you are going to need either a substantial trust fund or a financial aid package offering something close to a free ride to pay for it. Before you sign on the dotted line, ask yourself this: am I willing to spend the next twenty years paying for four years of self-discovery?

What if you want to go to grad school? What if you want to buy a home? Even if those ambitions aren’t on your radar yet, how about having the flexibility to quit your job and travel? What if you can’t find a job or get laid off?

Come hell or high water, those student loans must be repaid.

Education is a product that schools compete to sell to you. Rather than approaching school with some arty notion of experiences and developing self, think about choosing a college in terms of buying a car. You want the very best model you can afford, one that will last you a long time. One that won’t cost you a fortune in repairs. One that looks nice is preferable, of course, but you want a car that’s going to get you places. Which means that you really shouldn’t be shopping for a Porsche when a Honda best fits your budget.

If a college really wants you, it will provide its services at no or at reasonable cost to you. If it’s the other way around, you’d better make the experience so good  that the sacrifices you’ll have to make for the rest of your life seem still seem worth it in twenty years.

Having BTDT, I would not recommend that path. There are many experiences in life. Why limit yourself to a life of debt slavery when there’s so much more to experience?

This isn’t to say that you shouldn’t take out loans ever. My point is that if you are looking at an associate’s or bachelor’s degree, you shouldn’t be taking on $30,000 or $50,000 in debt. When student debt is used judiciously, it dramatically increases your standard of living. When abused, it becomes an anchor preventing you from living a full life.

Student loans are often called good debt, but no debt is good if it consigns you to debt slavery. I see a lot of students who gamble heavily on the value of their degrees. If you’re going to gamble, know your chances of winning and bet accordingly.

Graduating from college into the real world with my shiny new English degree was tough. While I had been drinking and philosophizing and occasionally writing papers, the real world had been suffering through the Internet bubble bust. Although my school was quite forward-thinking in requiring its liberal arts grads to acquire some tech skills, my graduation could not have been more poorly timed.

In a market flooded with unemployed techies, there was no place for me to begin honing the few skills I’d picked up. In a peculiar reversal of fortune, my English degree actually proved nominally useful in obtaining a job – teaching English abroad.  I rode out the bear market in another country, which was fine for what it was, which is to say that it was essentially another year of college. I didn’t learn very much of anything except that teaching wasn’t really my calling.

Meanwhile, my student debt was climbing the Stairway to Perpetual Servitude.

I had taken out two loans, you see, to pay for that very expensive “experiential” undergraduate degree, but upon graduation received counseling for only one. Being a clueless student – my entire analysis of the cost of college had consisted signing on the dotted line – I figured that $17,000 in student loans was a pretty ordinary amount to have and, though twice my anticipated salary abroad, it would somehow disappear.

In other words, I followed the time-honored method of dealing with burdensome debt: stick my head in the sand and flee the country.

When I came back, my mother presented me a neat stack of envelopes printed with increasingly fluorescent and dire warnings. “Maybe you should consider consolidation,” my mother suggested, sticking another envelope on the top of the pile. “Are you sure you deferred those loans?”

You can probably guess my response: “Sure mom, stick them in that bag there and I’ll figure it out in New York.” Undaunted, I moved to the most expensive city in the country. Jobless. In the middle of a recession. Behind on my student loans (read: trashed credit). I opened the consolidation envelope, sent it in, and set about securing a job and a place to live.

Apart from my student loan follies, I was actually doing pretty well for a post-grad in a still-crappy job market. I had a low salary and a lot of roommates, but I also had a budget and stuck to it more or less faithfully.* I had a credit card that was pretty tough to get into trouble with at a $500 limit, and this went a long way toward repairing my credit as my consolidation application wound its painful way through to completion.**

Since I had no money, I continued to not make payments. Those fluorescent envelopes turned positively volcanic in tone and color. By the time the consolidation company tacked on the interest and penalties, I owed over $31k.

This is the story of what $31k and a generic degree*** do to your plans for the future. In my next post, I’ll start exploring some of the data on student loans.

*In fact, I managed to save a whole $3,000 on a $28k annual salary, but that’s another post.

**Seriously, students, if I have one piece of advice it is this: just say no to the credit card offers. I don’t care how they’re branded. Choose one, and don’t let them give you a large balance.

*** For the record, I love studying literature, it’s just almost impossible to find anyone willing to pay you for reading or writing it.

I like telling stories, so telling my own seems like a good way to kick off this blog.

My high school education was, through my own intervention, somewhat haphazard. I attended multiple schools in multiple states and had probably less than the usual degree of self-discipline accorded to high school kids. I was good at doing the minimum to get by and very, very resistant to the notion that if you just sat down and did something, it was usually over with a lot more quickly than if you agonized over it incessantly and then finally did a rush job at the last minute.

Then I took a personal finance class as part of my math curriculum. Suddenly, math wasn’t just abstract formulas floating on a page – these were the numbers that defined the parameters of my life! Balancing a checkbook (this was in the early days of the Internet, and people actually still did this) was suddenly interesting! Financial management became fun!

And then I encountered the college application process. Slick glossy catalogs promising a vast network of new friends, experiences of a lifetime, travel, individualized access to thought-provoking enlightened leaders…how could I choose among the bright and shiny futures that landed in my mailbox each and every day?! Each seemed better than the last.

I applied to many, many colleges, at $100 a pop or more. I didn’t get into some, which was expected. As you’ve probably surmised, I wasn’t a stellar student. I was, however, a naive one. Personal finance classes didn’t seem to apply to college – this was an Investment in my Future. Somehow, mere acceptance into these schools proved that I that would be transformed from a mediocre student from a slightly less-than-mediocre background into a Guiding Light of the Future of Our Nation. The mysterious alchemy of the college experience would leave me with skills ensuring my continued participaiton in the middle class – if only I signed on the dotted line.

When it came down to two options, I chose the Experience. The Experience option came with a $30k student loan commitment. That is way above even the most recent figure for the average student loan debt load in 2009, $23,200, and this was nearly a decade ago. In short, there is no way that this choice made sense from a financial standpoint. After all, I was an English major, and no one expected me to do anything else.  English degrees are ACME diplomas that leave you with few marketable skills and do not substantially increase your earning power.

But I picked it. And I’m still paying it off. I’ll be spending quite a bit of time on this blog talking about the consequences of that decision and how I’ve handled the debt. I would love to hear your stories of how you chose a college or what you are looking for in a college education. I hope you’ve thought about it more critically than I did!

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