'Collecting degrees like a thermometer': This Atlanta woman has three different degrees and $311,000 in student debt – but refuses to use her law degree to make more money. Dave Ramsey answers
College may be expensive, but generations of young adults have been sold on the promise of high returns once they make it into the job market.
But for Atlanta resident Helen, who now relies on $311,000 from three different deals, that's not the case.
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She recently called into The Ramsey Show to get financial expert Dave Ramsey's input on her situation.
As is his style, Ramsey pulled no punches as he informed Helen that she was “collecting degrees like a thermometer” before urging her to change her perspective on work, money and relationships.
Overqualified and underemployed
Helen says she has degrees in law, conflict management and information technology. She admits the conflict management degree was a “waste of money”, while the information technology degree is now outdated. Her only direct route to income would be through law school.
However, Helen worked as a trial lawyer for three years but left the job because she “hated” it. She is now employed as an attorney at a nonprofit firm where she earns an annual salary of $85,000.
Unfortunately, that's not enough to pay off their debts. Helen says interest rates on her student loans range from 6.8% to 7.6% – and she also carries a mortgage that brings her total debt load to about half a million dollars.
Helen finds herself at the intersection of two crises. According to the Education Data Initiative, about 43.6 million Americans are saddled with student loans, while a third of college graduates are in jobs that don't require a college degree, according to a survey by ResumeBuilder.com. Too much debt and too little income due to underemployment are overlapping problems.
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Luckily for Helen, she has some options to quickly supplement her income and escape this situation.
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Increase the size of your shovel
Helen's refusal to work as a trial lawyer has reduced her income. At the same time, her husband makes $50,000 (and doesn't have the degree to dramatically increase his income overnight) – and he also has separate debts. Ramsey summarized their main problem: “You have a deep, deep hole and a medium to small shovel. We need to increase the size of your shovel and your income.”
The income a lawyer can earn depends on location, type of law, and years of experience. However, according to the latest report from the National Association for Law Placement (NALP), even entry-level professionals can earn up to $215,000 in major markets. Based on her three years of experience, Helen should be above this salary range.
Ramsey estimates that by working as a lawyer, Helen could earn an extra $100,000 a year and get out of debt in about three years. He says this may be a temporary measure rather than a permanent career change because she doesn't enjoy the work.
To be fair, Helen isn't the only one who doesn't enjoy working as a lawyer. According to a recent study from the University of Minnesota, lawyers are at high risk of feeling stressed, overworked and lonely because of the high stakes in their work. Ramsey acknowledges this, but argues that “dealing with litigation is less depressing than dealing with $311,000 in student loan debt.”
He also recommends that the couple combine their debts and work together to increase their income. Helen can still pay off her loans with her current income – and without her husband's help – but “it will take you three or four times longer.”
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This article is for informational purposes only and should not be construed as advice. The provision is made without any guarantee.