What To Do When Your Debt Situation Feels Hopeless (From A Student Loan Expert)


One of the great things about running TFD has always been getting to read, every day, money stories from people who run the financial spectrum — from students who only have a budget for ramen noodles, to lawyers married to other lawyers, who cannot make their money (and debt) work, despite earning more money than the vast majority of Americans ever will. It’s a privilege to be able to hear about their lives and finances, and more importantly, it’s been an incredible reminder of how much we’re all dealing with the weight of living well, financially. It’s easy to think someone’s life is perfect (or at least incredibly comfortable) from the outside, but the truth is that you can earn a lot, and have very little at the end of the month. You can be debt-free and still spend your way into precarity. You can have a bunch of gorgeous luxury items bought on a credit card you defaulted on, which I very much did as soon as I turned 18 and got my first card.

The point is, you can be anyone, and still have a hard time with money. And for many of us, the hardest part about our financial lives are our debt. With the average millennial debt for a Bachelor’s degree being just around $31,000, struggling to make student loan payments has become an almost banal part of millennial money life. If you feel like your debt is hopeless, or that you might never have all the “normal” adult things in life because of it, you are far from alone.

And it’s for that reason that we’ve teamed up with Andy, founder of Student Loan Hero for round two of his awesome Q&A with the TFD community. (Student Loan Hero is a free, easy-to-use and unbiased program that helps you manage and plan your student loan repayment. It has calculators, tools, and tons of information, and like that budget app you might already have on your phone, it keeps you accountable for the details and numbers you’re likely to forget.) TFD readers have been writing in their most burning questions, and Andy has been answering them, as only someone with his seriously-awesome perspective on student loans can.

This week, he’s talking to that aforementioned lawyer-married-to-a-lawyer, someone who, from the outside, should have everything right when it comes to money — but who finds herself struggling all the same. So, without further ado, let’s get into it!

Hi Chelsea!

My name is Devon and I am an associate attorney working in rural Pennsylvania. I feel like I am absolutely drowning! I recently got married and my husband and I combined incomes but not bank accounts (yet). It is out of pure laziness. Here is a little overview of our finances. Thank you so much for your consideration.

I currently earn a base salary of $72,500. My side hustle is court appointments and I take on whatever I possibly can. This year so far I have earned about $15,000 on them but most of that money went to pay for my wedding in April. Taxes are not withheld from that amount so I put 30% of each gig into my savings account. I contribute 10% of my salary to my 401K.

My husband earns a base salary of $75,000. He is also an attorney and his job does not allow side hustles. He contributes 6% to his 401K.

Debt (gulp)
I have approximately $16,000 in loans from undergrad. I am paying about $400/month on the undergrad debt through American Education Services. Over the past two months, I have taken some of the smaller loans and paid them in full (approximately $1,300).

I also have approximately $175,000 in student debt from law school. I pay about $1,100/month on the law school debt through Nelnet. I am on the Income Based Repayment Plan. I tried to refinance when I got out of law school, but Nelnet basically advised me that it would not be beneficial.

My husband has student loan debt in the amount of $43,000, but his parents are currently making payments on it. I believe we will have to take it over someday but that day is not today. However, I think the payment they are making is basically just keeping the interest at bay.

We have $6,000 in credit card debt. It is all on one card. We have a lot of other cards with zero balance. We typically pay them off each month but this card got a little out of control.

We are currently renting at $1,450/per month and are locked into a two-year lease. At the end of the lease we would like to buy a house.

My car payment is $400/month. My husbands is half that. We both have life insurance and disability insurance policies that we pay yearly premiums on. We have car insurance premiums as well.

We definitely like to eat out and go for drinks. I love to cook, so our food budget is probably way higher than it needs to be. I also have a wicked little shopping habit that I know has slowed me down in my financial goals.

We have about $8,000 in savings but a large portion of that is the 30% that I set aside for taxes.

Phew! I think that is everything.

I have totally come to peace with the fact that I am going to be paying on these student loans every month for a long time and that the payment will be a significant amount of my income. But I cannot come to peace with the fact that I do not understand my debt. These payments are so big but the balance never goes down.

It just seems like my husband and I should be in a better place financially than what we are. We have each been working as attorneys for the past three years. I worry so much about my student debt. So many of your articles feature people who have $40,000 or $50,000 and I just think, “I could manage that.” I don’t know where to even begin with six figures of debt hanging over my head. I am truly working my butt off and I just feel like the money I pump into those loans every month doesn’t even touch the debt. Compound that with the fact that I am a newlywed and I think my financial profile would resonate with a lot of people. My financial goals and habits are pretty on point with many people my age. I want a house, I want a savings account with a nice cushion and I want to get a grip on my student loans.

I would truly love for Andy to help me. Thank you so much for your consideration.



Hi Devon,

First off, you’ve got a nice side hustle going! That extra income will definitely help in your quest to get your loans under control.

When it comes to saving more money, you’ve really answered that question for yourself already in terms of what you can do better. You’ve admitted there’s room to cut back on the food budget and shopping. Just a little bit of mindfulness can go a long way in helping you be more aware of unnecessary spending and avoiding it. Whatever money you save, put that money towards your debt instead.

In terms of paying off debt, sounds like that credit card debt needs to go! I recommend paying off debt with the highest interest rates first and working your way down with the debt avalanche. And though you didn’t include interest rates, I’m betting your credit cards have the highest rates of all the debt you owe.

So how about those student loans that don’t seem to get any smaller? Income-driven repayment plans are typically the slowest way to pay off your student debt. Since the payments are reduced, most of that money goes toward interest charges and barely makes a dent in the principal balance. Plus, a longer repayment period means paying more interest over the life of your loans.

This is probably why it feels like you keep throwing money at these loans but don’t see any progress. Of course, monthly payments totaling $1,500 is obviously pretty high, so I understand it’s not easy to pay more than that.

Based on your current debt and income, you might be eligible for forgiveness of your remaining balance through your Income-Based Repayment plan. However, if your income increases substantially, you might not. Even if you do qualify for forgiveness, you’re looking at 20 years of payments in the meantime – which is a long time! (You can use an IBR calculator to help you figure it out).

Have you considered refinancing your student loans through an online lender such as SoFi, Earnest, or another? It may be worth looking into, as it could help you consolidate your debt at a lower interest rate and save quite a bit of money over time.

Just keep in mind that if you do refinance, you’ll lose access to your Income-Based Repayment and other federal student loan repayment options. It’s a tradeoff to consider.

If you’re not able to or don’t want to refinance your loans, you’re likely going to need to increase your income somehow to be able to afford extra payments and get rid of that debt faster.


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  • Tara

    No offense to Andy, but these people need to buckle down and focus solely on their debt, not their savings, not their retirement, not living the lawyer life. They make a combined gross income of $162,500 and have a total of $240,000 in debt. They should live on about $60K per year and throw everything else at debt and be done in 2-3 years depending on intensity and taxes. I know many people don’t like Dave Ramsey, but the idea of living in debt forever is not a life worth living. Buying a house while you are hundreds of thousands of dollars in debt is insane. Things break and need to be replaced, and you will finance them and be in more debt.

    FWIW, I make about $93,000 as a lawyer. I graduated law school in 2006, have never earned six figures, and really got focused on my loans this past year when they were hovering around the 100K mark. I’m single and pay all of my own bills. I’ve paid about $45K this year on my loans (living very frugally, obviously). I pay around $3K per month depending on other expenses. (I also threw some savings at the loans this year in accordance with the Baby Steps.) My rent is $1350/month. I will be debt free by the end of next year or beginning of the following year depending on work/pay increases.

    I still use a credit card and pay it off monthly. I use Everydollar.com. You don’t have to do everything Ramsey says to succeed. But you cannot do 6 things at once and still get out of debt. It requires focus and a limited time period of sacrifice. It’s worth it.

    • Ellie Rockhill

      Tara, how much of a savings buffer do you keep? I know some people following Dave Ramsey just keep the $1000, and others have 3-6 months of emergency savings. I am going to be doing the debt snowball approach this year and am looking at paying off my $56,000 of debt ($34k loans, $12k car, $8k personal loan, $2k credit card) in about 5 years (my current salary is $34,000 and I am single). Do you have any thoughts on my circumstance?

      • Tara

        I keep about $2500 in savings. My job is very stable and for me this amount makes me comfortable.

      • Summer

        I’m in a very similar boat as you and am also curious what should “ideally” be sitting in my savings account. I have about 3k in savings right now but I dip into it pretty regularly if it comes down to either transferring money out of savings or paying interest on the month’s credit card balance, which I am adamant about paying in full with each statement. Most of my student loans are lumped together with Great Lakes, but I have one old one out on its own with another provider and the balance is just over $2k. The monthly payment is only $50 so it’s not like getting rid of that loan will free up a ton of extra cash to throw at the big, $32k chunk of loans, but part of me wonders if I should just pay it off with money in savings and be rid of it. I guess I’m just nervous about only having $1000 in savings, feels like too close of a flashback to the days when I had literally $0 saved. $1000 can go very quickly and my income is not consistent. I’ve commented several times on TFD that I’m simply not willing to sacrifice every shred of joy in life for the sake of paying off debt faster, so I guess that mentality also has something to do with my hesitation to demolish my already meager savings… In short, idk and I was also kind of hoping someone would reply to you with some advice. 🙂

    • KG

      Focusing solely on debt sounds like a great plan in theory, and while “living in debt forever” is certainly not ideal (I think debt = life not worth living is a bit extreme), real life happens and having a little bit of cash savings and contributing a modest amount to retirement/long term goals is also a part of looking out for your financial future. Specifically, saving for their taxes sounds like a smart plan.

      Your estimation of paying off their debt in 2-3 years is wildly optimistic. If they live in my state, they’re taking home about 60% of that $162,500, and if they live on $60k (not impossible), they have less than $40K per year to pay down the debt- which would mean more like 6-7 years to pay it off, not including the interest that will continue to accrue during that period.

  • I was kind of hoping for more of a detailed response on this… my partner pays $3k/month on student loans which is set to go up to $4k next year when his IBR expires due to a slightly higher salary. How does anyone do anything when SEVERAL THOUSAND DOLLARS goes out the door every month? That’s a mortgage payment on a McMansion in the suburbs. It’s a European vacation every month. It’s the cost of leasing 10 luxury vehicles every month. “Earn more.” Done, and it sort of backfired on the IBR front. “Save for retirement.” With what money? “Cut your expenses.” When your expenses are literally rent and food, where do you cut? We don’t have a car, and a public transportation pass is provided through work. I pay for any trip we take, which basically are just quick weekend trips to attend weddings of family & friends I couldn’t bear to miss out on. I just don’t even know where to begin anymore when your salary on paper is much higher than the average American but your actual available income every month is much lower.

    Student loans are a huge burden for our generation and I understand the bulk of people owe tens of thousands, rather than hundreds of thousands, so run-of-the-mill advice may work for them. Articles about people who owe a quarter of a million dollars are few & far between, so I had high hopes for this one but it feels like more of the same.

    • egust01

      I agree- I feel like a lot of these “tips to get out of debt” articles are starting to be really repetitive.

  • SC

    I really liked seeing the breakdown of this woman’s expenses, but the advice was pretty disappointing and a lot of fluff that could have summarized in two sentences.