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October 19, 2009

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I think I'll join you in the "I feel sorry for their clueless-ness" pod. The sad part is, I don't think they are particularly extraordinary. Hundreds of thousands of couples out there are like this, and the only reason we don't know about it is because they haven't done a "Tell Us Your Story for $250" thing.

Sad, sad, sad.

No scolding, no tsk-tsking, no lecture, no sympathy.

Why don't they declare bankruptcy and then hit up the parents to help pay off the college loan debt. Certainly they are not going to be able to dig their way out of this with normal payments...

Sorry to be harsh, but after declaring BK they can live at home and focus on paying off the student loans in full... looks like they can trim their food and snack expenditures as well. Health benefits and cost savings, who'd have thunk it?

-Mike

I agree, this story doesn't exactly excite my sympathy.

I can't seem to whip up a batch of sympathy for these folks. I have pulled a few bone headed financial stunts in my younger days, but nothing compared to these guys. I hope they can learn from this experience.

"a $650-a-month mortgage" - that's what I remember about my years of living in Pittsburgh, you could find fantastic housing for cheap, whether renting or buying.

The thing is, if they had stayed out of debt, the $2100/month of his unemployment (sweet PA benefits) plus her $1K/month for her part-time work would be more than enough to pay all the bills in that city and maybe they'd actually be enjoying the "time off" while looking for work instead of stressing themselves into mental and physical health issues. Even the $700/month student loan payment doesn't sound like that much of a burden if one of them regains full employment (though I'm guessing even paying $700/month, $88K+interest is going to be with you for a long time)

Seems to me that the student loan debt is the real killer here. Without the student loans they'd probably be able to get by.

I think the real tragedy is that someone believed that piling up $88k in student loan debt for a liberal arts degree was a good idea. And I wouldn't blame her for that entirely, she was undoubtedly coached that getting a college degree is the best financial move and yet at the same time convinced that private schools are the 'best'. Yet nobody told her she really needed to get a degree in something employable.

They need to be getting additional part-time jobs. Also, why do they still have cable when they are having trouble even buying food?

@JimL: I know someone who is about to lose their house and has no money for food but who refuses to give up cable and TiVO becuase they "don't have any other choice".

I agree with the author, Mitchell Allen, who was mentioned near the end of the article...they are going to have to make some tough living changes so they can "right-size" their life.

If they live with family while they job hunt, that would help. If they can continue living cheap while they have good jobs, they could start making significant progress towards their debt.

Since they still have cable while they pick and choose which bills to pay, I doubt they have the mindset to actually do what needs to be done...

One's planning for a secure future should start early in life.
The sooner you can decide what you want to be and start zeroing in on the type of education and experience that it will take then the better are you chances of success. Better to realize early rather than later that you are not suited for a certain type of career.

On my hiking group's trip today there was a 42 year old guy that I have known for a while. He used to have a very well paid job with a computer software related company,and was a manager earning over $130K. He has now been unemployed for over 2 years, cannot find a job he likes, and his unemployment benefits have recently run out. He also goes to court this week to have his child support to his ex wife cut to zero since his income is zero. He also isn't motivated to get a lower paying job because most of it would go to his ex-wife. He lives with his significant other who has a very good job, and relies on his savings for other expenses. His significant other's company even gives him healthcare benefits as her dependent. Here's why he can't get a job - he has a BS in Psychology, so his resume looks very weak in today's job market where the competition for jobs like the one he had is very stiff indeed. What was he thinking when he got his degree? This is a common story - many people disassociate education from its ability to help you earn a good living.

I meet young people frequently that are working on a degree that has next to no application in the job market whatsoever unless you want to be a History, Social Science, Political Science, or English Literature teacher where there aren't any jobs anyway. Some of these degrees help you make very interesting dinner conversations but aren't too useful for paying the rent and putting food on the table.

I feel that you should concentrate on what it takes to provide a good income first of all, you can always develop your knowledge and social skills later with evening courses at a Junior College - but one's First priority should be obtaining the ability to make a decent living! You have to be able to present the best possible resume you can to a potential employer - good looks and BS won't cut it when times are tough.

@Old Limey, can the 42-year-old man really get his child support lowered to zero due to his having no income? We can't do that in Ohio - we go to jail after first having our driver's license suspended! It's true that most of his income from a low-paying job would go to child support - in Ohio they'll take up to 60% of your income, no matter how little you make, for one child. This guy's in for a world of hurt.

That story made me want to scream quite honestly. No sympathy from me either. Especially about getting turned down for food-stamps. The unemployment check alone is much larger than many full-time worker's checks are.

Ok the student loans suck, but maybe they could refinance. But in three years she couldn't find a better job? I know the economy is awful right now but THREE YEARS?! And why do they have cable? Good heavens, throw that cost at the student loans. Why do they have two cars? Especially if one is out of work? Especially with loans on them. Sell both cars, pay off the loans and buy one decent used car.

There are legit examples of debts I feel bad for people about, (think medical debt) but this is definitely not one of them.

Old Limey, it's not the degree that's the problem. There's lots of jobs with a BS in Psych you can get. Case Manager, Direct Care, etc. It's the attitude. His resume's weaker for the massive gap in employment not the degree. If he doesn't like his job then he needs to go back to school. It's not a secret that you need an advanced degree to get a "good job" in psych, but there are options. Hope things work out for him.

I can't feel sorry for these people. Common sense would be that you don't spend 12000 on a wedding when you don't have the money. It may have been a fun time.. but really with a few friends and family a couple of thousand would have been plenty to have nice wedding with. These are stupid people. They need to wise up... Probably the kind of folks that never will though. As soon as they get close to crawling out of debt, they'll decide its time for a new car or something. If they needed to spend so much on the wedding, they'll always want to "keep up" with thier friends.

dePriest & Shakela:
It seems that in California if you have zero income then your child support can go also go to zero. There's actually more to the story than I described. The ex husband has a lot of vindictiveness towards his ex-wife because she obtained a judgment that forbids him from seeing his children. The young man's father is a wealthy entrepreneur in the electronics field and could no doubt get him a job fairly easily but the son seems quite content to remain in his current lifestyle until his child support obligations lapse.

Even though the guy's Psychology degree has no direct application to his previous employment he taught himself to become an excellent programmer and used his other skills to work his way up into management. First level managers have been very vulnerable to layoff in the severe downturn that has taken place in Silicon Valley's industries. The ex wife ran off with her Karate instructor and they now live on the East coast with her parents. It's a sad, messy, but typical story that has probably happened all over the USA. Like all such stories I have only heard one side of it - you need to hear both sides before you can really make a judgment.

I am just glad personally that I have been very happily married for 53 years and that my three children are supporting themselves. I taught them the value of money when they were growing up by not giving them allowances and encouraging them to get jobs while they were at high school. All three are very secure financially. It helped them to learn early in life the lesson that 'Money doesn't grow on Trees'.

I have to agree that attitude and people skills acocunt for more than a degree does. If you're smart enough, you can land a job anywhere with a degree in anything.

For example, my wife and I both have advanced degrees in (gasp) English, and we have no debt and sock away a considerable amount from our well paying (non-teaching) jobs.

Meanwhile, I have a friend with degrees in Comp Sci. and Accounting who doesn't do anything but play PS3 and complain about the system failing to recognize his brilliance.

Wow, I just checked the undergrad tuition at her college:

http://admissions.carlow.edu/tuit-fees/tuit-undergrad.html

And it's $22K/year. Her student loans are $88K, which tells me her education was fully financed: No work study, no summer job, no help from parents, and no scholarships.

Oops, I skimmed right past the room and board! That's another ~ $9K/year. That makes me feel better - I was very disappointed when I thought the whole college experience was mortgaged to the hilt.

As someone who switched from a career in my major to something entirely different a year later, I have to say you can't plan your life too far in advance, and there's no guarantee that you'll land a job that will pay off any student debts you accrue.

When I went to college in the 90's, all of my loans were federally subsidized and went into deferral as long as I was taking >6 credits. After college I signed up for evening classes at the community college for that career move, so for $600 in tuition I deferred payments for 6 months *and* prepared myself for a better paying job. I'm not sure deferral would help Mrs. Obringer, but night classes might.

First time commenter here ... just in case there are any "entry level" PF readers following along I'd like to address the wedding scenario in this story.

First a disclaimer. I didn't marry until I was nearly 35 ... and I'm darned glad I didn't, because I was choosing the wrong partners up to age 30 ... as many people do.

When DH and I got engaged, we decided what kind of wedding we wanted (formal, evening, sit-down dinner, big dance floor, attached to a hotel for ease of out-of-town guests). Then we researched how much that would cost ($80 - $100 per person). Then we figured out how many people we "needed" to invite (about 80). And that gave us the cost of the wedding. Then we figured out how long it would take for us to save enough to pay for the party in cash (22 months). And that is how long we were engaged.

So many people start their adult lives "under water" because of a wedding!! It's ridiculous, especially given that money trouble is the #1 cause of divorce.

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