that is just horrible.. i love it
Take your upvote and get out.
"Make it sew" FTFY.
Federal student loans generally have an income-adjusted option, which makes your payment 10% of your "discretionary income." Discretionary income is calculated as any income above a set point at 150% of poverty level, or a salary of $17,655 for a single person like me. Non-federal loans may or may not have an income-based repayment option.
Interest accumulates (at a rate of 4-8% depending on which Federal loan and when it was dispersed) regardless of your ability to repay.
So, for instance, let's say you graduate with $120k in student loans at 6.5% interest, into a job paying $36,000/year. On the income-based repayment plan, you will pay $224/month initially, rising to $634/month for the final payment (assuming a 3.5%/year salary growth relative to inflation) At the end of the 25 year maximum you will have paid $119,539. Due to interest accumulation you would still technically owe $195,871.
This $195k would be discharged, but in most situations the 'forgiven' amount would be considered taxable income. So after paying $119k of your $120k loan over a 25 year period, you would be liable for taxes on your 'income' of $195k in forgiven loan debt. That tax debt would be somewhere in the $40-60k range, and must be paid in the year which the 'income' occurs. Yup, congrats - after paying $119k over 25 years on your $120k loan, you now owe the government $60k in taxes in year number 26. On your $36k/year salary. Good luck!
And during that 25 (or 26) years? Your debt/income ratio is insane. You will never qualify for a home loan. You will have a great deal of difficulty in qualifying for a car loan (and a car is a necessity to work in most of the US). You will be paying rent into someone else's pocket the entire time, unable to build equity. When you retire you won't own a home. Oh, your projected retirement income is less than the cost of rent in your area? Guess you can't retire; have fun working until you die.
That's for Federal loans. Private loans typically have a higher interest rate, and may or may not have an income-based repayment option at all. Can't pay? Tough. Student loans can't be discharged in bankruptcy, so it'll go to a collection agency. They will garnish your pay. If you are on Social Security or Disability payments, they will take a portion of those. They will take their money - quite legally -until you have paid or died.
That $120k loan into a $36k/year salary? Not hypothetical. I know two people right now who are about 2-3 years into the 'Federal loan' chain of events above with $100-140k in loans each. One is going back to school (adding loan debt, gambling on getting into a higher-paid field). The other is working a $36k/year job. In reality, salary growth will be flat against inflation. After 5-8 years she might land a job paying $50-60k/year, but she will never rise above that level without going back for a PhD.
I did the same thing, but walked out with about $60k in debt instead of $100k+. Fortunately a couple grandparents died around the time I had to start repaying debts, so I was able to shave about $30k off immediately. And yeah, think for a minute about how fucked up that statement was. I also have no hobbies and no social life because I pay 4-5 times the minimum payment each month. I'll be debt-free in a total of about 6 years (instead of 25 plus tax issues if I paid minimum), and as a result I might be able to buy a house and save for retirement. Cost is a mere 6 years of literally every penny of income not dedicated to rent/food/insurance/etc.
TLDR; Fuck student loans, and fuck everyone involved in their dispersal and repayment. If someone took a cue from the Sasanians and poured molten fucking gold down their throats I would pay good money to watch. If I had any goddamn money.
Edit: In reply to the myriad "lol, worthless degree" comments - It's a shit system. And yeah, part of the reason it's a shit system is that it allows people to borrow $120k on a set of degrees that will never allow them to pay that much. And part of the reason it's shitty is that people do that anyway. Doesn't make it any less shit. And it doesn't make the half dozen people making millions on the backs of everyone stuck in that shit any less deserving of a good, swift punch in the throat.
If you want more of a response, see my reply to the first of those comments. It starts with the phrase "You're not wrong," if that's enough to stroke your ego into actually reading it.
This was posted in another sub a while back by /u/jacobbarber and is exactly how I feel trying to pay off debt
I think another problem is that this decision is made by a 17 year old who has been going to school their whole life. That's all they know and they are told that its the right path for a prosperous future.