Recently, I wore a "Student Loan Hero" t-shirt on a run to a smoothie shop. When the cashier glanced at me, she said, “Oh, cool shirt. What’s it for?”
“It’s where I work,” I said. “We help people with their student loans.”
“Well, you couldn't help me. I have like $70,000 in student loans,” she said.
I didn't respond, but my stomach immediately sank. She reminded me of myself just a few years ago, when I was facing my own six-figure student debt. I saw something in her, a belief I used to have: that I was a victim of my student loan debt.
Three reasons student loan borrowers feel like victims.
I graduated with $74,000 in student loans and saw my balance grow to $107,000 in only a few short years. At the time, I bought into a victim mindset regarding my student debt. I had worked so hard in college, only to graduate with debt I was powerless to pay back.
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I’ve talked to a lot of student loan borrowers since I started Student Loan Hero, and I know many of them feel like victims as well. Here’s why they might be correct.
1. Rising college costs.
From where I’m standing, many of today’s student loan borrowers thought college was a must-have, not a choice. Our parents told us, “You have to get a college degree.” So we did.
But we paid more to do so. College prices increased by 45 percent from 2005 to 2015, according to Lumina Foundation, while family incomes dipped by 7 percent over the same period. College tuition and fees increased by 63 percent from January 2006 to July 2016, according to the Bureau of Labor Statistics.
With college costs rising faster than both wages and inflation, more students had to resort to loans. Recent student loan debt statistics show that borrowers owe an average $37,172.
2. Lower college degree ROI.
A degree used to get you a high-paying job. Today, it just gets you a job.
The return on investment of a college degree has eroded. Starting pay for people with a bachelor’s degree has remained about the same over the past decade, according to the National Association of Colleges and Employers. Meanwhile, student loan balances have crept up, making it difficult for college graduates to pay down high debt without higher wages.
Plus, college graduates won’t always get the job they’re aiming for. After graduating at the height of the Great Recession, I couldn't land a gig and ended up waiting tables to make ends meet.
I’m not the only one, either. As of June 2017, about a third of college graduates are underemployed in jobs that don’t require a college degree, according to the Federal Reserve Bank of New York.
3. Inadequate support systems.
College-bound students and their families are more sensitive to costs today than they were a decade ago, according to Sallie Mae’s How America Pays for College 2017 study. And in 2015, the Department of Education rolled out the Gainful Employment Rule, which incentivizes colleges to prepare students for careers.
But for many student loan borrowers who graduated several years ago, these trends don’t help. The time for conversations with financial aid administrators and parents about how to pay for college is long past. And for many people with student loan debt, those conversations never even happened.
Four ways you can fight your student loan victim mindset.
There’s a quote from Jim Rohn that applies to the student loan struggle -- “We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.”
Although I felt completely justified in my victim mindset, it held me back. I had to take ownership of my situation before I could change it. Here are some ways you can feel empowered to tackle your debt.
1. Take ownership of your choices.
While I was waiting tables, I realized nobody was going to help me except myself. I started owning my choices, as well as my sense of entitlement. The fact that I had an economics degree didn't guarantee me a job. Nobody was going to hand me a job or a check for my student loan balance. I made this mess by choosing to attend an expensive school and taking out student loans. I had to be the person to fix it.
2. Find your grit.
Many opportunities depend on how hard you push, how much you care and how much energy you invest -- in short, your grit.
When I couldn't find a job, I set out to make my own. I moved to Asia and co-founded a software development company, building websites for small- and medium-sized businesses without knowing much about software development. I pushed hard, working 12 to 14 hours per day to build that company. The first year, our revenue was just $12,000. But I kept pushing, and we ultimately grew the business to $250,000 in annual revenue.
My experience building my first company taught me that if you want something to happen, you have to be creative and find a way to do it yourself.
3. Let yourself rage -- and then use it as fuel.
Are you angry or stressed about your student loans? I was too. It’s like the five stages of grief -- denial, anger and so on. I went through all of it, and it wasn't always pretty.
When you’re up against a wall with student debt, there are two options. You can allow stress to force you into a corner, do nothing and let the situation get worse, or you can use your emotions to your advantage.
When you feel those intense emotions, don’t use them to beat yourself up. Instead, focus them on the real target: your student debt. Use your frustration as fuel to spring into action and start paying off your debt.
4. Find a financial role model.
I strongly believe in modeling. If you’re trying to win the Olympics, talk to an Olympian who’s done it. Similarly, if you want to get out of debt, find a mentor who’s done it or read debt payoff success stories and follow those paths.
Modeling is one of the easiest ways to change your thinking. Look for case studies and examples of people who dug themselves out of situations similar to yours. Then, try to model how they accomplished it.
In the end, I beat my victim mindset and felt empowered to pay off my student debt. I sent in my last payment in August 2016. When I saw that same mindset in the smoothie shop cashier, I wish I would have told her I’ve been there, and I still believe that there’s hope for student loan borrowers. You have the power to change your situation if you’re willing to use it.