Thursday, March 27, 2008

Effects of Student Loan Debts on Career Options

We have started to get comments on some of our blog postings and want to encourage more. This blog is intended to be a discussion, and we welcome your comments.

Another aspect of career development that has not been discussed much is the impact of student loan debt on career options. Law school is not cheap (nor are paralegal programs), but I suspect that most students incur student loan debt, viewing it as an investment in their future. After all, if you are able to land a $150,000 annual salary upon graduation, an $80,000 student loan debt may seem worth the investment. Sometimes law firms will assist or pay off student loan debt, making it seem an even better investment.

However, if you do not get that high annual salary, such debt seems insurmountable and pointless. You may take the first job you can find just to keep yourself financially afloat, even if it does not meet any of your career goals.
Solutions? I have a few proposals, some simple, some a long shot. I am open to more suggestions.

First, if you are working on a contract basis, take a new look at your rates. Take the rate that is reasonable for your work and then add a "surcharge" for student loan repayment (this also should be done for benefits that you have to provide for yourself such as retirement, vacations, health insurance, etc.). If your clients or temp agency think your rates are too high, explain that they include this items which are normally provided to employees.

Second, take ample advantage of forbearances and other programs for altering payment schedules or sometimes reducing the total bill when needed. It is important to pay your financial obligations, but lenders are willing to work with you; don't hesitate to take advantage of these options.

Third, look into jobs that will pay some of your student loan debt. Certain organizations will contribute to student loan repayment when you work for them for a certain period of time. I believe the Peace Corps is one of these, but there are many others.

Fourth, and this is the long shot, perhaps there should be some lobbying for changes in tax laws or bankruptcy laws to allow more flexibility with respect to student loan repayments when the industry conditions are dramatically different than expected when you started school, thus making repayment much more difficult. Who wants to take on this lobbying job?

Most importantly, have a plan for getting your student loan debt paid off eventually. You may have to make many adjustments as the years go by, but having a goal does help.

Take a moment to respond to our poll regarding the volume of student loan debt of our readers.

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