I’m a 30-year-old whose student loan balance increased by more than $20,000 in 6 years, despite making every payment. It’s enough to make you question your sanity.

Ashley Strahm standing in a brick alley
Ashley Strahm says her original student loan balance increased by over $20,000 in six years due to interest rates.

  • Ashley Strahm, 30, is a content strategist, activist, and writer in Durham, North Carolina.
  • She went to college at age 16 and took out $60,000 in student loans by graduation, which ballooned to over $82,000 thanks to interest rates.
  • Even after refinancing her loans she still owes $44,000, and it’s often “the first thing I think about when I wake up,” Strahm says.
  • See more stories on Insider’s business page.

I knew what I was getting into.

I’m a first-generation college grad born to two amazing parents from South America. I prepared to graduate from a private, all-girls, college-preparatory high school at 16, got a partial academic scholarship to a private university, and proceeded to take out $15,000 a year in federal Stafford and parent plus loans to cover the rest. (Fun fact: no one, not even the government, is willing to lend to a college-bound kid who’s not even remotely 18 yet. This meant my parents had to put their credit on the line to help me finance my education. I know that’s not unorthodox, but it would’ve been nice to at least have the option to shoulder the burden myself from the outset.)

Read more: This couple paid off $114,000 of debt then saved up $431,000 with these 4 side hustles. Here’s how much money they made from each gig and their advice to others.

So, let’s recap. It’s 2008, I’m aware America’s economy is going up in flames, but I got a pretty significant scholarship to attend college – which no one in my immediate family has done before. I went in with my eyes wide open, researching interest rates, deciding against private loans, refusing to accept my dad dipping into his 401k to fund my endeavor, and getting an on-campus job to subsidize costs while I was in school. (I obviously wasn’t aware of what we should all know by now – women, and Black women in particular, are disproportionately ensnared in student debt.)

“There’s more you could have done!” say folks who refuse to empathize with us (greedy/lazy/opportunistic/careless?!) millennials. “You chose to play rugby and spend frivolously on cleats, gas, and stitches for your unnecessarily procured gaping wounds! You could’ve sold a kidney, donated plasma, or went to a community college! How dare you even begin to complain about a college experience you knew would cost so much?!”

Stop right there, y’all. I knew. I was ready.

I lay awake at 20 years old in the spring of my senior year with unwavering determination. I was going to get a kick-ass job in journalism/communications/marketing and not even wait the six-month deferment period to allow my loan’s interest to capitalize. I viewed my loan balance as yet another thiccc rugby woman I had to stiff-arm into submission (and I’d had plenty of practice). I wasn’t scared. I’d incurred a significant fee to finance an education I both desired and relished the process of receiving … and I was ready to pay when my bill came due. I understood that each promissory note was another proverbial nail in my coffin.

This is what folks who stridently and stubbornly refuse to empathize with young student loan borrowers will never understand.

Many of us operate as though no one will save us, forgive our debt, and pretend our responsibility has ended. There are millions of us who lose sleep every night for years, plugging formulas into Excel spreadsheets and debt repayment calculators, budgeting for jobs they apply for mere months after enrolling in school. There are countless tears, anxieties, and plans that result in this burden we know we are accountable for.

Before I’d turned 21, I already accepted that the remainder of the decade would be spent in service to the investment I’d made when I was still too young to vote.

So I got down to it. I’m 30 now, and I’ve never missed a student loan payment. The monthly bills have fluctuated between $462 and $2,695 dollars per month, but I have never. missed. a single one.

What began as an original balance of nearly $60,000 when I graduated in 2012 ballooned to over $82,000 in 2018.

Yes, you read that right.

A 21-year-old who never missed a monthly $450+ student loan payment financed by the United States government saw her balance increase by over $20,000 over the course of six years.

You could comment on how I should’ve paid more than the minimum, how I should’ve worked over the course of six years to land a job that paid double so I could make a dent in the principal. That I should’ve gotten my parents or family to help, should’ve gotten a side hustle, should’ve lived in squalor and cut back on my already meager meal plans to pay more, ever more.

And I’m going to call bullshit on that.

I made my debt a massive priority. But when the minimum payment for my federal 8.5% interest rate loan is nearly $500, I will not accept that the issue lies with me. A kid with a degree bringing home $50,000 a year three years out of school should be able to make at least a dent in her debt burden. Instead of seeing my diligence rewarded, I saw my balance increase.

It’s earth-shattering. It’s enough to make you question if you’re insane; if you’ve been reading your billing statements correctly; if the loan officers you call every quarter are lying to you; if you’re the reason your efforts are failing.

But I’m still at it, y’all. I refinanced my loans to a 5.25% interest rate because my credit is over 815 at this point (yes, I’m proud). I married – which, besides being the best decision I ever made for my heart, also helps because (and I’ll just say it) after paying off his student debt, we’re contributing his entire monthly salary to mine. Every. last. cent.

We’re choosing not to have children partially because we’re already paying the equivalent of Montessori tuition for a non-existent five-year-old.

Hear this: People are feeling all kinds of ways about potential federal student loan forgiveness. I forfeited any possibility of that when I refinanced my loans with a private company three years ago, and I’d do it again in a heartbeat. I pray every night for the millions of folks still paying endlessly to the government to get their loans forgiven. They deserve it. They’re still sprinting up a treacherous mountain with no end in sight, paying astounding amounts of interest while suffocating under the weight of other basic financial responsibilities.

I wanted to be out of that hell so badly that I gave up any hope of a government bailout. If I still had federal loans, I’d still be running in place. I will support anyone who is still trapped in that federal student debt purgatory and sees their loans forgiven, because I know that pain. I feel that strife. When they are free, we’ll all be free. Their salvation couldn’t possibly deny me the sweet reprieve of my efforts for all of these years.

My husband and I are now paying twice the amount of our mortgage to my student loans every month. From the fall of 2018 to now, my balance has decreased from over $82,000 to $44,000. It’s the first thing I think about when I wake up and the last thing we talk about most nights before bed.

Sometimes, people ask me if I ever think about graduate school and it makes me want to vomit. Even as the pursuit of knowledge calls out to me, the shadowy nightmare of its cost keeps me far from ever considering it.

Read the original article on Business Insider

Gen Z is paying double what boomers paid for college – and the gap will only widen in the future

college students
Gen Z is staring down a pricey college experience.

  • College costs are more than double what they were in the 1970s, according to a GoBankingRates report.
  • Boomers paid $39,780 in today’s dollars for a four-year public university. Gen Z is paying $90,875.
  • It’s a bad sign for Gen Z, as college costs are expected to continue to climb.
  • See more stories on Insider’s business page.

While US politicians continue to debate student-loan forgiveness, college tuition continues to soar.

Overall college costs are twice what they were in the 1970s, according to a recent GoBankingRates report that assessed generational differences among college expenses. It signals a rough road ahead for Gen Z, the first of whom just began to graduate college in 2019.

The report looked at the College Board’s estimates for average annual costs of tuition, fees, and room and board. It assumed that students attended a four-year institution between ages 18 and 22 for baby boomers, Gen X, millennials, and Gen Z, adjusting estimates for inflation.

The chart below shows just how much college costs have climbed.

From fall 1973 to spring 1977, boomers paid around $39,780 in today’s dollars for four years of public college. That’s a little more than half the cost for millennials attending public college from fall 2006 to spring 2010: $70,000. And what Gen Z is paying today is more than double that: $90,875.

The numbers are even starker for private tuition, which cost around $80,000 in inflation-adjusted dollars for boomers, compared to $165,000 for millennials and a whopping $210,000 for Gen Z.

Gen X experienced the beginning of this uphill battle, as tuition costs rose at a compounded annual growth rate of more than 7% a year from fall 1973 through the fall 1990 in real dollars. From fall 1990 to spring 1994, they would have paid $43,857 at a four-year public university and $115,000 for a private college, adjusted for inflation.

College has become so expensive, some question its value

College is expensive for many reasons, including an increase in financial aid, a lack of state funding, a need for more faculty members and money to pay them, and ballooning student services.

A surge in demand is also driving the price hike, Richard Vedder, an author and distinguished professor emeritus of economics at Ohio University, previously told Insider: “The rewards for college have expanded and grown from 1985 to a little after 2000 and sort of leveled off in the past decade.”

The “advantage of a degree today is less than it was 10 years ago, because of the rising cost,” he added. “The return on investment has fallen.”

Just ask the 49% of indebted millennials still paying off their student loans who said in an Insider and Morning Consult survey that college wasn’t worth the cost.

The pandemic scrambled this equation somewhat, with remote learning leading some to question the value proposition. Insider’s Bradley Saacks and Shana Lebowitz reported in summer 2020 that at least some colleges faced the prospect of students not returning for the upcoming school year, with potentially huge hits to revenue.

Harvard projected last spring that it would lose out on hundreds of millions of dollars during the current school year due to fewer students and no room-and-board revenue. NYU professor Scott Galloway said at a December Insider event that academia is ripe for disruption and likened Harvard to a “$50,000 streaming platform.” But even Galloway said tuition costs haven’t started coming down yet, and don’t seem likely to.

The overall increase in students attending college now compared with previous years indicates that the advantages college offers still outweigh its increasing costs for many, which will fuel costs further. And getting a degree has become increasingly important, according to Joel Anderson, author of the report.

As he wrote of Gen Z, “Not only will they need more money – comparably – than any previous generation, but the shift toward a service economy also means that a career without that pricey education is harder than ever.”

Read the original article on Business Insider