I Took Out $135,000 in Student Loans in Order To Survive

Summary

Summary of "I Took Out $135,000 in Student Loans in Order To Survive" – The Ramsey Show Highlights

Release Date: February 12, 2025

In this compelling episode of The Ramsey Show Highlights, hosted by the Ramsey Network, listeners are presented with a heartfelt discussion between Dave Ramsey, financial expert John Delony, and Hayley—a 25-year-old aspiring licensed therapist grappling with substantial student loan debt. The episode delves deep into Hayley’s financial struggles, the challenges of managing student debt, and actionable strategies to overcome such financial hurdles.

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Introduction

The episode opens with Hayley reaching out for advice on managing her significant student loan debt. At 25 years old, Hayley has accumulated $135,000 in student loans while striving to complete her education and build a career in therapy. Her journey is marked by financial instability, including periods of potential homelessness and reliance on multiple loans to sustain herself.

Timestamp [00:04]:
Hayley introduces her predicament:
"I am 25 years old and I am on the end of my road to become a licensed therapist... I have about $135,000 and in student debt."

Understanding the Debt Crisis

John Delony provides context on how such substantial debt often arises from systemic issues within the student loan system. He explains that students frequently take out multiple loans to cover living expenses, leading to a cycle of debt accumulation.

Timestamp [01:05]:
John Delony elaborates on the prevalence of student loan problems:
"They've kind of curbed it over the last few years, but there used to be lines of students... accepting multiple loans just to live off of those refund checks."

Navigating Career Challenges

The conversation shifts to the realities of starting a career in therapy, especially in Tennessee, where typical counselor salaries range between $50,000 to $60,000. Hayley expresses concern that such earnings may not suffice to manage her debt effectively.

Timestamp [02:20]:
Hayley shares her concerns:
"Because unfortunately, in the state of Tennessee, a typical counselor salary is only about 50 to 60,000 a year."

John Delony emphasizes the need to break away from the conventional career path to increase income. He encourages Hayley to work harder, take on additional responsibilities, and possibly accept unconventional working hours to differentiate herself in the field.

Timestamp [02:32]:
John Delony advises:
"You have to choose to not be typical... you have to do groups, you got to do early mornings on Sundays and late nights on Saturday nights."

Strategies for Increasing Income

Dave Ramsey and John Delony discuss practical steps Hayley can take to boost her income. They suggest leveraging her skills and certifications to offer additional services, such as life coaching or spiritual coaching, to diversify her income streams.

Timestamp [08:00]:
Hayley mentions her additional certifications:
"I did get a life coach and spiritual coach certification to maybe open up another side business as well."

John Delony encourages Hayley to utilize every possible avenue to meet clients, regardless of the time or effort required, to maximize her earning potential.

Timestamp [08:15]:
John Delony affirms:
"You're going to use all of your certificates, all of your extra things, and you're gonna meet clients where they are all across the board."

Debt Management and Repayment Plan

Dave Ramsey provides critical advice on managing and planning the repayment of Hayley’s debts. He highlights the importance of not accruing additional debt and outlines a step-by-step approach to tackle existing loans.

Timestamp [05:53]:
Dave Ramsey emphasizes urgency:
"You owe $135,000. Making 50 grand is going to take you a decade to pay off if you're lucky. And that's not a plan."

He advises Hayley to halt any further borrowing and focus on increasing her income to manage and pay down her debts more aggressively.

Timestamp [07:30]:
Dave Ramsey outlines the repayment strategy:
"Pay off the debt in order of smallest to largest balance, ignoring the interest rate... attack that with all the extra margin we can get with our newfound income from working extra."

John Delony supports this strategy by highlighting the necessity of discipline and hard work to achieve financial freedom.

Timestamp [07:03]:
John Delony concludes:
"You gotta have the ego to say, I'm about helping people and I can't help my clients if I'm worried about how I'm going to get my bills paid. And I'm going to work like bananas all across the board and there's no job too small for me."

Future Outlook and Encouragement

Hayley shares her plans to complete her classes by May and begin an unpaid internship, all while maintaining a full-time job. Dave Ramsey suggests that once Hayley completes her education and stabilizes her income, she can implement a structured debt repayment plan.

Timestamp [07:20]:
Dave Ramsey advises:
"When you're ready to pay off the debt, when you're through this program and you haven't taken on any more debt and you've got this down, then we can begin paying it off."

John Delony encourages Hayley to harness her experiences and additional certifications to interact with a diverse client base, thereby increasing her earning potential and accelerating debt repayment.

Timestamp [09:04]:
Dave Ramsey offers further support:
"We're gonna send you Financial Peace University... Create your free every dollar budget today."

Conclusion

The episode concludes with affirmations of support from Dave Ramsey and John Delony, urging Hayley to utilize available resources and maintain financial discipline. They emphasize that achieving debt freedom is attainable through strategic planning, increased income, and unwavering dedication.

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Key Takeaways:

1. Increase Income: Diversify income streams by leveraging additional skills and certifications.
2. Maximize Work Hours: Be willing to work unconventional hours and take on extra responsibilities to elevate your career.
3. Debt Repayment Strategy: Focus on paying off debts from smallest to largest without consolidating, using the "debt snowball" method.
4. Financial Discipline: Avoid taking on new debt and manage existing obligations diligently.
5. Utilize Resources: Engage with financial education programs like Financial Peace University for structured guidance.

This episode serves as a powerful narrative for individuals facing similar financial challenges, offering both empathy and practical solutions to navigate the complexities of managing and overcoming substantial debt.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app.

[Hayley]

Start budgeting for free today. So I am wanting a great startup advice on how to start paying off my student loans. I am 25 years old and I am on the end of my road to become a licensed therapist. And during. Between the ages of 21 to 23, there was a lot of struggles, unfortunately. To where to the point I was possibly stealing food, risk of homelessness. And when I had found out about refund checks, I was accepting multiple loans just to live off of those refund checks, from ranging of 4,000 to about $7,000. And now being 25, I have about $135,000 and in student debt. I'm not out of college or graduate school yet, but I'm wanting to go ahead and start tackling this.

[John Delony]

Yeah, that was a real common thing. I used to see. They've. They've kind of curbed it over the last few years, but there used to be lines of students that come out and register for classes, get the loan check, and then cancel their classes, and it would just float them to the next semester and then float to the next semester. So here's the crummy part. You're not gonna like our answer. You're gonna have to work really hard and make a whole bunch of money to pay that stuff off.

[Hayley]

Okay, there's not.

[John Delony]

I mean, I know that sounds so annoying. I remember one time in grad school, I asked a guy who came in, and you've probably done this too, in a counseling class. And I just. He was a professional, had a big, successful practice. And I said, hey, how do you make six figures as a counselor? In the room kind of gasped because you're not supposed to ask that question, because it's supposed to be all altruistic and kind, and I do it for free. Yeah. And he looked at me and he said, you're not going to like my answer, just like I said to you. And I said, okay, go for it. And he said, you got to work really, really hard, and you got to be really, really good at being a counselor. And you got to take clients on Sundays. You got to take clients at 6:00 in the morning, because that's the only time they can get in there before work. And you got to work really, really hard. And if you become very, very good at what you do, people will pay you to. To come help them.

[Hayley]

I absolutely agree. That is, that is one thought I was having. Because unfortunately, in the state of Tennessee, a typical counselor salary is only about 50 to 60,000 a year.

[John Delony]

So I'm in Tennessee. Here's what you have to choose. You have to choose to not be typical. And so the typical, the typical counselor follows a particular track. And those are my friends. That's my community, that's my world. And so I don't, I don't hate on that one bit. But if you want to get your head out above the clouds, you got to do some things that are going to put your head out above the clouds, which means you got to do things differently. You got to do groups, you got to, you got to do early mornings on Sundays and late nights on Saturday nights. And you got to do things that other people don't want to do or.

[Dave Ramsey]

Can'T do, probably other jobs in between.

[John Delony]

Your sessions while you're building your client base, you got to do other jobs and not have enough arrogance to say, well, I'm a licensed counselor, I don't do Uber. You have to have the, the, the ego to say, I'm about helping people and I can't help my clients if I'm worried about how I'm going to get my bills paid. And so I'm going to work like B A N A nas all across the board and there's no job too small for me and I'm going to get it done. And then what you'll find is you become an amazing therapist because you begin meeting clients where they are at 6:00 in the morning. At 5. I used to see clients 6:00 in the morning. That's the only time she could meet. And so I was like, cool, I'll be there.

[Hayley]

I absolutely do love that.

[Dave Ramsey]

How much, how much further do you have to finish this program?

[Hayley]

I will be done with my classes by May. And then I'm starting my internship May 26th to November 2nd.

[John Delony]

And then you got several years.

[Dave Ramsey]

Is that a paid internship or.

[Hayley]

No, this is unpaid internship. I already have a full time job at another treatment center.

[Dave Ramsey]

When does that start?

[Hayley]

How much does it, how much does it pay?

[Dave Ramsey]

When does, is that starting in November?

[Hayley]

No. So I'm currently working a full time job right now, but my unpaid internship starts May 26th.

[Dave Ramsey]

Okay.

[John Delony]

And so you're gonna have a season where you're just gonna have to, you're gonna have to scratch and claw. Make it work because you're working full time, you're doing a great thing, and you got to get your internship hours just to graduate. And then you're gonna have to do your 3,000 hours after that, right after you pass Your exams?

[Hayley]

Yes.

[Dave Ramsey]

So what are you making right now?

[Hayley]

I make roughly about 42,000 a year.

[Dave Ramsey]

Good. And what will you be making at this new job, do you know?

[Hayley]

Roughly about just. Just the same. Just because it's about. Because right now for mental health technicians, that's just what I work as. You make. It's about going to be about $22 an hour.

[Dave Ramsey]

So after all this school, you're going to make the same. Is that what you're telling me or am I hearing it wrong?

[Hayley]

Okay, so for a therapist, it would really depend ultimately on the agency to where hopefully I can try to make about 55 to 60,000. But that's my dream to start off with.

[John Delony]

Yeah, but that's only at the agency. You're going to have to also see clients on Saturdays and Sundays and Monday mornings and Tuesday nights.

[Hayley]

Yes.

[John Delony]

You owe $100,000.

[Dave Ramsey]

135,000. Making 50 grand is going to take you a decade to pay off if you're lucky.

[John Delony]

Can't do that.

[Dave Ramsey]

And that's not a plan. I want to see you debt free in a few years, not 10 or 12. So that means, like John said, getting that income way up and also not going further into debt. So here's the advice that you may be shocked to hear. I would not begin paying off your debt. Your goal should be to stop the bleeding and to don't not go into any more debt. So have you already paid all the way through this program or do you still owe more?

[Hayley]

I have not paid all the way through yet.

[Dave Ramsey]

How much is remaining?

[Hayley]

I believe. Oh, gosh, it's still. You talking about student loans itself.

[Dave Ramsey]

Well, you owe 135. Are you going to go take out more student loans to finish this program?

[Hayley]

No.

[Dave Ramsey]

So you're done? We're done taking out debt?

[Hayley]

Yes.

[Dave Ramsey]

Are you using debt in any other area of your life? Do you have a credit card?

[Hayley]

No, I do not have. Well, the only credit card I do have is Care Credit just for my dog to take him to his yearly vet appointments.

[Dave Ramsey]

Okay. And you don't have any other debt outside of the student loans? No car payment? How much is that?

[Hayley]

That is about. I have the exact number right here. I have about $10,000 left on that.

[Dave Ramsey]

Okay. And what's the monthly payment?

[Hayley]

That is about $350 a month.

[Dave Ramsey]

All right, so when you're ready to pay off the debt, when you're through this program and you haven't taken on any more debt and you've got this down, then we can begin paying it.

[John Delony]

Off.

[Dave Ramsey]

And you're going to do this in order of smallest to largest balance, ignoring the interest rate. And I'm guessing all these student loans, you probably have like 11 or 12 student loans if you broke them all out.

[Hayley]

Yes, Correct.

[Dave Ramsey]

Okay, so don't do any consolidation here. Focus on attacking the smallest debt, whatever's next. If the next is a thousand bucks, let's attack that with all the extra margin we can get with our newfound income from working extra. That's how you're going to pay this thing off. But again, it's going to take a whole lot more income.

[Hayley]

Okay. And the good thing is, is that I also got. I don't really know though, how to quite use it. I did get a life coach and spiritual coach certification to maybe open up another side business as well, or.

[John Delony]

That's what I'm talking about. You're going to have to be a. I love that you're getting the experience in the field at a treatment center. That's some of the best experience you could possibly get. I love it because you're going to be. You're going to get to interact with wealthy clients and clients that don't have any. You're going to get to see everybody, right? You get to see how systems work. And you're going to get to work with top notch physicians and psychologists and crummy counselors. You're going to see everybody. That's fantastic. But yes, you're gonna have to use every hustle move. You've got to see any kind of client all day, every day. You're gonna be exhausted, but you've dug yourself $130,000 hole. And so we're gonna use all of your certificates, all of your extra things, and you're gonna meet clients where they are all across the board. And you're gonna work and you're gonna work and you're gonna work and you're gonna become very, very good. And you're gonna get this stuff paid off quick.

[Dave Ramsey]

Hang on the line, Hayley. We're gonna send you Financial Peace University Watch all nine lessons. It's going to put a pep in your step and give you the financial literacy you need to actually get through this. Create your free every dollar budget today. The simplest way to budget for your life.