Hacker News Reader

Comment by milennialthrwy | Hacker News Reader

Here's my grim reality I'm just waking up to now as a millennial.

Married with $100k in student loans between the two of us. Her first job out of college paid $30k with no benefits. No matter, I had the money making tech degree, we'd be fine. My first job out of college was $100k, so I didn't see a problem there.

Three year later I'm facing mounting healthcare costs incurred even with top notch gold plated tech insurance. Most of my salary the last 3 years went to my landlord and the government. The remainder went to student loans and medical costs, so I don't have much in the way of savings even after earning $300k. And somehow I still owe $100k in student loans.

And my $100k tech job didn't come with retirement benefits so I don't have any retirement savings yet. It did however come with a generous stock grant. But then again, the company folded and now I don't have a job or insurance.

And now I'm a full time caregiver for my wife, with no health insurance, trying to get a job, with $100k in non-dischargable debt, looking to get on welfare, but at the same time reading about how our government wants to take even that away.

So that's what I'm doing this weekend.

View on HN

I'd like to contrast that with my own personal story. After college, I got a job that paid $60K in tech. Wife got one that paid $50K. So similar total income. However, We moved to a city with a lower cost of living and no state income taxes. We lived with family for the first year and saved up enough to put a down payment on a house. We got the house for $160,000 (cheap cost of living for the win). Our mortgage was only $800 a month, but we poured over $4K a month into it and paid it off in 4 years. We did not have student loans, but the extra we paid into the mortgage could have gone toward that. Once the house was paid down, we only paid $5K per year in property taxes for the house. We were living on less than 40% of our income. We both had good health insurance, but there are also high medical expenses.

For us the cost of living of a city and state were game-changers.

A once-in-a-lifetime domestic relocation credit (which pays for moving costs and your first N months of living expenses in your new place, as well as a return ticket in case things go south) would be a great idea for labor mobility.

Thanks for sharing your anecdote! A couple questions: how did you pay for college without incurring debt, and what jobs did you get for those salaries in a low cost-of-living (presumably small-town?) area?

My parents paid for the first year and a half, and then I got a job and paid for the rest. Tuition was like 10K per year at a public state school. I also tested out of a couple classes due to advanced placement in HS.

One of us was doing software/web development and another was financial accounting (CPA). This was not a small town, it was a suburb of the Dallas/Fort Worth metroplex. The farther out you move from the city, the lower the cost of living, but we had a 30-40 minute commute.

Neither of us wanted to pay for cable so we saved like $8K over a number of years skipping out on that.

Thanks for the data points! I suspected one or both of you might have chosen a geographically transferable profession that requires limited or no post-grad like accounting or nursing. I think these are the best kinds of jobs to target. What else fits into this category? Maybe software / web development fits too, though I don't think it's so geographically transferable. I wish teaching (which is what lots of my college friends do) was one of these, but alas, it pays extremely poorly.

I guess outlying suburbs of somewhat-but-but-wildly-bustling metros are viable as low-cost / high-employment places to live, though I'm not sure requiring long commutes that aren't well suited to mass transit is a great solution for most people.

Most people with tons of college debt that I know worked the entire time, so YMMV on that one. The people I know without debt are actually more likely to have not worked (because their parents were paying).

> how did you pay for college without incurring debt

Another option for keeping college costs down is to start out at a community college and then transfer. With teachers there interested in teaching the material, the education can sometimes be better than entry level classes at a 4-year school.

Seems foolish to pay the mortgage off so quickly instead of paying the minimum and investing the rest.

> Married with $100k in student loans between the two of us

You may want to look into deferring or forbearing your student loans [1], at least until you're back on your feet.

> my $100k tech job didn't come with retirement benefits

Next time around, consider a SEP-IRA [2]. In the meantime, contact a local NGO about subsidized healthcare, food, education and job-training and placement programs.

Also, don't be embarrassed asking for charity. When I started my first company, I took a gamble and skipped out on health insurance. A few months of sleep deprivation later, I'm in the hospital with pneumonia. Huge bill. Wrote a letter to the hospital board asking for a deferral; they wrote down the bill to pennies on the dollar.

[1] https://studentaid.ed.gov/sa/repay-loans/deferment-forbearan...

[2] https://www.irs.gov/retirement-plans/plan-sponsor/simplified...

>You may want to look into deferring or forbearing your student loans

Politely, no, do not do that. Instead look at enrolling in an "income-driven repayment plan."[1] With this, even if your required payment is $0, you will receive credit toward the total # of payments required for your loan term.

https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...

Seconded. Try to get on the "REPAYE" plan, I feel that's the best one. Only downside -- when they forgive your loans after 20 years, you pay taxes on that as if it's income.

Thanks. And yes, this whole thing requires a bit of finagling, which I think unfortunate.

I advise couples w/ debt to rethink formal marriage because of how tax laws are structured. Same goes for those who are married; strategic divorce is a real and sometimes necessary option.

Why did you suggest a SEP? Only businesses can establish those for their employees. An employee cannot open one on his own.

Did you mean Roth or traditional IRA instead?

Although I am not in your position yet (a few years laggard) I feel echoes of your sentiment in my life already.

Alas, all I have to offer is a measly upvote, the currency of Millennials' bright shining future.

I'm sorry about your personal struggles, and hope things look up for you and your wife soon.

There is something that millennials together can do differently, though -- vote.

Millenial turnout is terribly low in the US. https://media.npr.org/assets/img/2016/05/16/pew2ft_16.05.13_... (So, yes, one party has made it a mission to suppress turnout; yes, Election Day is a work day, which makes it harder for working people to vote; etc. -- we can change all that, but first we have to work in the system as it is today.) And that means that boomers and the wealthy have had a much larger influence over society than young people. (The Piketty theory is that the West went through a few decades of stability after the 1970s and that made many people complacent, especially the young, allowing the wealthy and corporations to acquire power. Given the last two years, the time for complacency is ending.)

In particular, a better social safety net and a better education cost and education loan system would make for a fairer playing field for all. The only way you and I in America are going to get that is if we all vote - especially young people.

And in your particular case, the biggest travesty is the non-dischargeability of educational debt. That's a hard problem - both universities and the loan companies are at fault for lobbying for and setting up this system. But we need to fix it.

Again sorry for your current situation and I hope it looks up soon.

Well, government came up already with solution to "better education". It now holds like 90% of all student debt and 100K USD useless degrees are common.

Point here, before voting you need figure out actual solution. Not sure if anyone you can vote for now has actual solution.

Here's a solution. Discharge student loan debt and directly fund public university budgets to cover tuition.

Yeah, and who you should vote for to get it done? Sorry to remind it, but US had 8 years of democratic president (and mostly democratic congress) and student debt exploded in size during the same time period. So, millenials voting for Obama were wrong? Who they should have voted instead?

Why would you think voting for a single solitary politician would solve it all?

> So, millenials voting for Obama were wrong?

Hi, unfortunately, yes. I, like many others, wrote to him [and a few notable Democrat and Republican Senators who publicly champion(ed)] SL reform. My letter actually had supporting facts, and practical actionable policy suggestions. I heard back (directly) only from one Senator, a Republican, whose form letter was unrelated to SLs.

Though I didn't receive a direct response from anyone in Obama's administration, shortly after I'd sent my letter, the administration suggested cutting the SL interest deduction, which was polar opposite of what I'd suggested. And as you probably know, during last year's tax reform debates, the Republicans picked up, but ultimately dropped, that very same idea of removing said deduction.

There were some other policy changes that I saw effected after my letter that makes me certain that it was read and understood. Unfortunately, those changes, harmful to borrowers, were again the opposite of what I'd suggested.

Given what I am reading in Ron Suskind's Confidence Men, and have read/heard elsewhere, I'm not all that surprised.[1]

Young people will continue to be politically and financially expendable until they learn from history, organize themselves into strong blocks and directly involve themselves in the political process. Voting is merely a small part of participation. And I say that having been on the inside of the political machine.

[1] http://ronsuskind.com/books/confidence-men/

Part of the problem here is that we don't have a very good range of views represented in our political parties. The Republicans actually have a pretty diverse mix of traditional conservatives, neoconservatives and libertarians. The Democrats, on the other hand, are almost pathologically centrist. The most popular politician in America is a left-wing Democrat who supports free public universities and halving student loan interest rates, but rather than trying to cultivate that popularity, the Democratic Party can barely mask its contempt for him. So if those are the sorts of causes you support, you really will have a hard time finding good candidates to vote for, but your best bet is probably to vote in Democratic primaries and try to push them a bit left.

That's a terrible solution that doesn't fix any of the real problems. It just shifts around the financial burden of an increasingly eroded and expensive education system.

Here's a solution: Make sure that everyone who cannot cut it in college does not go in the first place. Start by not letting people who cannot complete basic requirements graduate from high school.

This starts to turn off the money tap, instead of turning it on full blast by hooking it up to even more public funds, so it will never happen. It also prevents lots of people who can barely read from taking on debt only to drop out 2 years later after doing a few "remedial" years.

https://medium.com/@simon.sarris/higher-education-erodes-a7c...

Then, make college more difficult until the credentialism becomes less pointless. It is insane that we have baristas 100k in debt after being in school from age 5 to 22. There are more ways to solve that than just redirecting the debt.

Alternatively: shut down all the scam universities and programs, sieze and auction off their holdings to pay off student loan debt.

> So, yes, one party has made it a mission to suppress turnout; yes, Election Day is a work day, which makes it harder for working people to vote; etc. -- we can change all that, but first we have to work in the system as it is today.

This is why non-compulsory voting hasn't ever made sense to me; it effectively biases the system towards those who care the most and enables those same people to influence the system further by making it difficult enough for others that they won't bother.

When it's compulsory to vote, things like weekday voting stop happening because laws will be introduced making it illegal to prevent your employees from taking time off work to go vote, so naturally both employers and employees alike want weekend voting.

Additionally, it incentivises the government to make voting accessible, because it is unreasonable for them to enforce voting via fines etc if it's not really possible for people to vote.

When I moved to the US from Australia I heard stories from my new colleagues about people in poor neighbourhoods lining up literally all day just to maybe get to vote before the booth closed, while those in richer neighbourhoods had practically no line at their voting booths. This is not how democracy should work. Your "freedom to choose not to vote" only serves to hurt any other freedoms you may have had.

> This is why non-compulsory voting hasn't ever made sense to me; it effectively biases the system towards those who care the most

That doesn't sound unreasonable on the face of it, to be honest.

Until you realise that those who care the most often hold extreme views and are the most outspoken even when representing a relative minority. Deeply conservative fundamentalist Christians, anti-vaxxers, and climate change deniers are some examples that come to mind.

A feature of current voting patterns because it takes place on a work day is that voting is dominated by 50+ people. The voice of those who are paid hourly or without flexible work schedules is not heard very proportionately. It's not that different from a poll tax or reading test or similar barriers to voting - those who care the most in order to spend time/money get to vote - are those reasonable as well?

As someone who is over 50, I feel the current system is stupid. I vote from home using a mail in ballot but the ballot is several pages, often six pages long, and takes me an hour to fill out while I do research online, so someone doing it in person has to make a lot of time before or after work (polling places near their home).

> the biggest travesty is the non-dischargeability of educational debt

There's no doubt that non-dischargeable student can be really rough for a lot of people. I'm not in insurance or anything, but it seems like if we just implemented the simplest fix, i.e. let people declare bankrupcy to forgive student loans, the math might just not pencil out to make it feasible to grant any student loans.

For instance I couldn't take out an $80k loan to start a business with instead of getting a student loan, no bank would give it to me. So there's definitely something special about student loans and the way in which they're so easy to get without needing good credit or any collateral behind them.

And if they could be forgiven by declaring bankruptcy, what would stop lots of people from doing that right after they graduate? For a lot of young people (including myself at that age), your total cumulative assets are worth approximately nothing when you graduate. And it's not like you're gonna be able to buy a house within 7 years of graduating anyway so the hit to your credit score of a bankruptcy might not be that bad.

It really doesn't seem like there's a silver bullet solution to help people finance the massive cost of college easily. What's the best solution here? Is it possible to reduce the underlying cost structure of higher education enough to make a big enough difference?

> What's the best solution here?

Let lenders vary interest rates by institution and major. Also, give lenders a choice: (a) loans dischargeable in court like any debt or (b) non-dischargeable loans where total payments in a calendar year are capped as a fraction of AGI.

This combination incentivises lenders to communicate employment and wage information from the labor market to students deciding where to go for school and what to study.

And it will at the same time vary the price of education based on financial post-graduation prospects. Have a shortage of teachers or social workers due to low salary? Well, the relevant degrees would only cost 10% of a STEM degree. I see this as a major win.

Pretty sure b. already exists, there are consolidation programs where you can get your monthly payment capped at a percentage of your salary. The downside is just like with paying the minimum due on a credit card, the interest can really screw you. In some cases the amount you can afford to pay may even be less than the interest.

Why do you say you won't be buying a house within seven years of graduating? I bought a house a little less than seven years after graduation. The guy next door bought his house like 2 years after graduation, since it was a bit of a fixer-upper he paid about 65% of what I paid for my house.

The median price of houses sold in the US is around $200,000. If you have a good job you can afford a house in 99% of America. And, indeed, there are more homeowners than renters.

Surely you're trolling? Good for you that you live somewhere affordable. Lots of people (much more than 1% of the population) don't, or can't find these "good jobs" you speak of right out of college.

No, absolutely not.

99% of Americans live somewhere where buying a house is affordable for most people. That's cold hard facts backed up by the average house price and ownership statistics. Most Americans don't live in New York City or San Francisco.

More people own (~65% IIRC) than rent and mortgages are stupid easy to get as long as you're employed; you don't even need a sizable down payment OR a good credit score. The requirements for a FHA loan is 3.5% down and 580 credit score - that's it! There's also plenty of other government subsidized programs for buying a house, my State has one that's available to almost everyone - the income limits are stupid high, more than six figures IIRC. I know people who are in a financial mess and have no business owning a house but they do own because it's so easy to get a mortgage. My friend makes only $30,000/year working for the government and owns a house because she qualified for a mortgage.

If it was so impossible to buy a house then it wouldn't be possible for 67% of the population to own a house.

Good jobs doesn't need scare quotes.

And I don't live in the Midwest either - I live on the east coast. I have friends all over the east coast and don't live in the city where I grew up, so it's not like my experience is hyper localized.

Thoughtful replies here, thanks.

Perhaps letting rates vary across institutions might be the simplest improvement. That would help Stanford students and make it hard to attend lower tier colleges. So we’d also need a way to advantage community colleges with a service mission. The big losers would be lower-tier, high-cost private schools and for-profits. But that’s a good thing- those are the schools that are breaking the American educational system and loading up students with low-value degrees and high debt.

Implicit in your post is a call for improved social programs, meanwhile the GP already stated he feels he is paying too much of his income in taxes.

None of what you cite - affordable education, a better social safety net would directly benefit the GP at this point. Indeed, he would be the one paying for it.

Improving social programs could be done without raising taxes.

Given how much an educated workforce gives back to our country, I never understood why the government doesn't offer interest-free student loans - especially since the debt cannot be discharged via bankruptcy.

Because interest-free student loans don't necessarily increase an educated workforce; they might also just line the pockets of the academic-industrial complex.

The Case Against Education is a great book on this topic.

Thanks for the suggestion. I'll take a look at it.

I do not know the solution but the current system already just lines the pockets of the academic-industrial complex, education costs keep rising at rates that are similar to healthcare in the USA.

> Given how much an educated workforce gives back to our country

Subsidized student loans produced many quality graduates. They also spun off reams of communication majors.

I'd actually argue part of the problem is lenders are totally immunized from the risk of their loans; if loans were priced to each institution and each major and each individual's academic record, that might pull wage and labor demand information from the labor market to undergraduate campuses.

Isn't it simply guaranteed by the government? Private banks put up the money and the government only steps in to pay if there is a default. Isn't it a profitable business for the banks?

In my opinion America's educational woes starts far earlier than university, I doubt throwing free money at the problem would solve anything except inflate college costs and bureaucracy.

It seems easy - and everyone balks about it - but hardly anyone considers what a major medical event can do to your health, your esteem, your loved ones, and your financial situation; all in one fell swoop.

Very true.

These struggles sound much harder than what I've had to deal with; please accept my sympathy.

About the student debt: That's a lot of debt. I suspect you and many other millenials were lied to when you were told that getting that much student debt is normal and necessary, when it is in fact neither. For example it takes longer to graduate when the student alternates semesters of school and work, but it does get them through (especially if the school has a strong co-op program), without nearly as severe a crushing debt load. Second, the overall benefit of an education goes way beyond the differences between schools, i.e. for many careers an inexpensive school is just as good as an expensive one. (Counterpoint: if you want to be on the Supreme Court someday, you apparently have to go to Harvard Law School...)

I confess that I'm puzzled when I hear about such high debt numbers from new grads, and the main explanation I can think of for what's different now from when I came up is that people are systematically being told that any college debt is a good investment (and loans are freely granted on that basis), when it plainly is not (and they should not be).

There is a lot true in this - though I personally think it has more to do with parents being put in a bind, than with adolescents being lied to - but there is one obvious thing you're missing: tuition and fees are much much higher now, across the board.

1) Sorry to read about your situation.

2) Please see my comment below about getting yourself on an "income-based repayment plan," if you aren't already on one.

3) Believe it or not, student loan debt is dischargable, though not easily so. See [1] & [2] for a 'success'(?) story not involving a fraudulent institution. IMO this decision was the impetus for Sallie Mae (SM) restructuring itself into SM and Navient.

[1] https://abovethelaw.com/2013/05/in-showing-undue-hardship-co...

[2] https://cdn.ca9.uscourts.gov/datastore/opinions/2013/05/22/1...

> $100k in student loans

I don't really know how student loans work in the US, but I've heard that federal loans payements were indexed on income. For that reason, they are more akin to taxation than to a regular debt. Is that correct?

You have to pay back your loan in full, with interest.

Under an income-based repayment plan, if you don't make enough money over 20-25 years to pay off the loan with interest, the remaining loan balance is forgiven.

10 years if working for in public service or an approved non-profit agency and the amount forgiven is not counted as taxable income.

However, there is currently at least one lawsuit pending because the gov't is trying to talk its way out of providing the forgiveness. Essentially telling the group that they were mistakenly approved for the program.

Also people should read the program's fine print (in the FAQs). There is no guarantee that the program will remain or that the commitment will be honored.

There are programs like that but they are only for certain people, usually only for certain professions.

The government cant really afford to forgive everyones loans. The repaid interest goes to federal programs and the principal goes to giving new loans to the younger generation.

"Usury is the operating system of the [American] empire" - heard this on a talk recently and it seemed to have some truth to it. Sorry about your situation.

Debt is a very useful tool for transferring money in time at a cost. Like all tools they can be useful, but they can also be taken advantage of and used for harm (or in this case asymmetrically).

Yes there are predators that take advantage of others using said tool. Its been known to cause "indentured servitude". But lets not criticize the tool here. This is an issue of governance, and societal scale.

look into discharging wife's student debt due to permanent disability. pursue divorce as legal strategy if it helps obtaining relief

Just going to note that, presumably, the idea is to divorce but stay together, not divorce then dump her.

What city is this in? There are other tech jobs, right? You had no 401k or anything?

I hope things turn up for you soon.

Do you mind me asking what the interest rate on your and your wife's student loan debt is?

Subsidized rates are ~5-7%. I know some of my sisters private loans are higher than 7% (I think somewhere around 10%). My parents gave her absolutely terrible advice about taking on the loans that she did, the millennial generation needs to be told the truth about the real life implications in servicing that much debt.

https://studentaid.ed.gov/sa/types/loans/interest-rates

And the debt is nondischargeable in bankruptcy. It's a societal failing that we're letting people take on this debt.

Anyone who takes on debt like that is increasing the risk to their lives. Sure, if everything follows the mean - good job, good health, good relationships - people on average come out ahead after an expensive education. But the downside risk is amplified. Get sick, and there's nowhere to turn and you're stuck servicing that debt for the rest of your life.

It's a problem that crosses party lines. Both finance firms and universities have played a role in setting this system up. But millenials have to vote in numbers and advocate for making student debt dischargeable in bankruptcy -- this is the whole social point of bankruptcy law dating back centuries, to reduce crazy downside risk to individuals.

I think we can start by cutting federal loan programs. If the programs have less money then it means less loans will be made and less debt.

If student loans were dischargable in bankruptcy, why wouldn't everyone go through bankrupcy proceedings after graduation? If you finance education with debt, you're virtually guaranteed to graduate with a negative net worth, and no real tangible assets worth seizing.

Income-based repayment plans already exist, limiting your payments to 10% of discretionary income, with full forgiveness after 20-25 years if any balance remains. "Servicing that debt for the rest of your life" is not a thing.

You could always have them bankrutable and have strong anti-fraud rules. But i think overall it is a bad idea. It is better to just have percentage income repayment rather than bankruptcy.

No doubt about it if student loans were bankruptable then it would be ripe with fraud.

Student loans discharged through bankruptcy should also include repossession of your degree -- that is, make it criminal fraud to represent your degree to any employer upon bankruptcy.

> And the debt is nondischargeable in bankruptcy. It's a societal failing that we're letting people take on this debt.

Houses, cars, businesses, etc. can all be surrendered. Knowledge cannot. A degree cannot. Why should it be dischargeable if the recipient cannot discharge the benefits?

Risk of borrowers defaulting is the entire ethical justification for lending with interest. Collateralization reduces the risk of the loan, but doesn't eliminate it; after all, cars lose value over time, and businesses may or may not be able to sell assets for enough to cover their liabilities. Indeed, the closest you get to eliminating the risk of a loan is having the federal government guarantee it, so...

> Risk of borrowers defaulting is the entire ethical justification for lending with interest.

Ethics has little to do with it. The lender has money you want, and you pay them for the privilege of using that money for a while. Supply and demand.

One can't collateralize a mind aside from claiming a fraction of the attached body's output.

Completely agree. I avoided going to an expensive college. Went to a cal state instead and still ended up getting a 50k/year job. Some of my co workers have 60-80k in loans still. It is soul crushing because they want to buy homes but cant because their debt is too much.

For us, parent PLUS loans from 2003-2007: ~7.5%.

Look into medicaid. Your income on paper may qualify you both.

I don't understand. Why can't you apply for another job? It seems like if you were able to get one, you could get another, right?

(Full disclosure: I am an unemployed millennial as well, and too naive to understand what's keeping you from getting another job. Hence the question.)

They are a full-time care giver to their wife.

He can hire someone to do that for far less than his 100k salary (even after taxes). There are possibly further issues that OP left out of his post but as written it is a bit confusing.

FWIW, they'll have to coordinate this after a new job since there isn't one at all providing for the household, which may or may not be easily attainable considering the FT care provider situation (and assuming the worst as far as how much attention/care is required throughout the day).

Ya, that's definitely true. And the issues there can vary A LOT depending on where OP lives. It can be a tremendous amount of work to manage these sorts of situations.

(I spent two years working for a home care company.)

Not in an area that gives you a 100k salary. And any kind of 'household employee' you hire will be after tax income.

There might be some tax deduction when it's medical reasons, but I'm not sure about that.

Reply on news.ycombinator.com