Making Student Debt Decisions Personal
I want to welcome Christian Sherrill to the NGPF team. He will be laser-focused on increasing access to financial education in classrooms across the United States. This is a story he wanted to share about why he is so passionate about financial education.
As the new NGPF documentary suggests, millennial college-educated professionals aren’t alone in having made costly investments in student loans. Lifelong educators with multiple degrees have ‘em too. And it’s a real problem that contributes to widespread churn-and-burn practices in education. Teaching is a one-two punch: it requires a lot of education and then under-compensates for that education. So teachers’ stories about student debt can be powerful. They’re deeply personal accounts of the pitfalls of student debt, the intentional opacity of financial institutions, and the will to persevere on behalf of high-needs students.
Here’s my story:
I started teaching 7th grade in 2013 at a school whose Title 1 status (40% or more students enrolled in free and reduced-price lunch program) qualified me for the federal Public Service Loan Forgiveness (PSLF) program if I served for 5 years or more. But when an office administrator forgot to submit the school’s free and reduced-price lunch applications, my school’s Title 1 funds were revoked, and my chances of forgiveness through public service were - like that - gone (even for those who follow the rules, PSLF may not be the panacea they thought when they signed up).
I had graduated from a private college with $80k in loans, and was earning a $36k/year teacher salary. I quickly had to choose between rent, food, monthly payments to my servicer and my ongoing payments to my new university for my teacher credentialing courses. After three years of teaching, my finances were so dire I had to leave the classroom and start a new career.
Reflecting back on the role student debt played in my unplanned transition out of teaching, I think the best advice I could have gotten prior to taking out loans for college was to figure out on much you will need to borrow to graduate from college BEFORE you sign on the dotted line and commit yourself to an educational institution. [editor's note: One expert's rule of thumb is not to borrow more than 1X your expected first year salary coming out of college]
But at the time my family and I were in a bind. Unfortunately, the financial aid package from my college was calculated based on historical tax returns. It didn’t matter that we were in a tight spot. So to cover the immediate costs, we made an investment that I’m paying off to this day. That’s also why forgiveness programs like PSLF seemed so promising to me when I first graduated. Here was a chance to pay down my debt in a sustainable way, then earn full forgiveness after serving low-income students for at least 5 years - a passion I already knew was my calling.
The broader lesson I’d share with students is that you can take nothing in the future for granted. This is true when you decide to attend a prestigious university, when you take out loans to pay for it, and even when you take a job that qualifies you for debt forgiveness. Financial institutions, universities and government regulatory bodies all rely on us to think everything will work out the way we plan.
And they’re often intentionally opaque about the risky road ahead. Plus, as everyone knows, in life things rarely do work out as planned. The only way to protect ourselves from an uncertain future then is to make well-informed decisions about our finances today.
Personal stories like this - cringe-worthy as they are to read and tell - are great lessons for students, particularly if we augment them thought-provoking questions and immersive activities.
- Bell Ringer: Here’s a great bell-ringer article from NPR you could start your class with. About a 5 minute read with stories about teachers struggling with student debt.
- Project: Students interview community members, family members or teachers about their experiences with student loans, presenting their take-aways in a classroom symposium. Here are some interview questions to get them started:
- Did you take out student loans to attend college?
- How much debt did you graduate with?
- How did that compare with your first year's salary coming out of school?
- How well did you think you understood the commitment that you were making?
- What do you wish you knew than that you know now about student debt?
- In-Class Student Challenge: Opaque or Transparent? (See below)
In-Class Student Challenge
- Stopwatch or phone timer.
- Chromebook or laptop.
- Time how long it takes, using a search engine, to find and write down the exact eligibility requirements for three different federal student loan forgiveness programs.
- Time how long it takes you, using the same search engine and computer, to get a find a website where you can apply for a student loan; stop the clock when you find the actual application form. Record.
- Compare the times in 1 to 2, or gather a sample from classmates and compare mean times.
- Discussion Questions:
- Was there a difference between the time in a and the time in b? What was it?
- What does time represent in this scenario?
- If there WAS a difference, why do you think that is?
Check out the NGPF Unit on Paying for College with numerous resources to help your students make better decisions about college finance.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.