After a three-year COVID-19 moratorium, interest on student loans will resume on Sept. 1, 2023, with disbursements expected to begin in October, according to the Department of Education. “We will notify the borrower well in advance of when payments will resume.”
Given that the pandemic was officially declared over on May 11, 2023, it makes sense to start paying off student loan debt. But of course not everyone agrees.
Some believe that a three-year hiatus from student loan payments is not enough. Rather, they feel entitled to a debt forgiveness. This kind of entitlement is a major factor that prevents them from becoming financially independent.
Let’s take a look at some examples of Twitter users’ rights awareness in action.
I was surprised that I had to pay off my student loans
Below is a tweet from a woman living in New York City. I grayed out her name to focus on the message. Let’s call her Patty. Consider how her entitlement mindset destroys her wealth potential.
Paying a $1,298.83 monthly student loan is expensive. But on the bright side, at least her rent is affordable in New York.
Patty’s comment of “how do you expect Americans to pay for this” is strange because she is the one who took out the loan. Of course, it is she who must repay her lender. who else?
If I borrowed money from the bank to buy a house, I wouldn’t take a pause and then be shocked to have to pay it back. I think I was lucky to get a mortgage right from the start so that I could live in my new house. And when you finally pay off your mortgage, you’ll be proud to have met your obligations.
The same logic applies when taking out student loans. Students should be grateful to their educational institution for lending them money to attend college. You can’t go to college without it!according to Lumina Foundation ReportAbout 54% of Americans will have a college degree by 2021.
As you can see from the data below, education is a very valuable asset.
A college degree is a valuable asset
A college degree is worth it because the median lifetime income of a college graduate is much higher than that of someone who only graduated from high school.
According to 2022 data from Federal Reserve Bank of New YorkThe median annual wage for full-time workers ages 22 to 27 with a high school diploma is $30,000. For a full-time worker with a bachelor’s degree, that’s $52,000 for him. That’s $22,000 a year, or a 73% difference.
according to Association of Public Universities and Land Grant UniversitiesA person with a bachelor’s degree earns a lifetime income of $2,268,000 compared to a lifetime income of only $1,304,000 for a person with a high school diploma. Therefore, it can be estimated that the value of a college education is worth millions.
High tuition fees at private universities
Considering that Patty’s monthly student loan payment is $1,298.83, she must have borrowed between $100,000 and $200,000 in student loans.
Borrowing $100,000 to $200,000 for a college education is expensive, but as long as Patty graduates from college, given enough time, the return on investment in college should be even greater.
Given this logic, I naturally looked up where she went to school and what she studied. A school with so many student loans must be pretty extravagant.
Hahaha! Patty got her bachelor’s degree from Champlain College, a private college I’ve never heard of. She then completed her Master of Fine Arts in Writing at Columbia University, an Ivy League university.
This year’s tuition at Champlain University is $45,100, is actually $10,000 to $15,000 cheaper per year than other private universities.However, it costs money to get a Lighting MFA from Columbia $76,177 For this year’s tuition and fees alone.
Considering her monthly student loan payments, we can assume that she does not receive any significant grants or scholarships.
Going to a private university is one thing. However, going into debt to study writing is not financially optimal. The median income of Ivy League graduates is already not significantly higher than that of non-Ivy League graduates.
Your profession becomes more important if you owe student loans
Having written online for 14 years and published several books, I know how difficult it is to become a professional writer. The pay is low and the unemployment rate is high.
Without other sources of income, it would have been very difficult to support a family of four here in San Francisco.
It would have been better if Patty had gone to a cheap state school, had a high-paying day job, and been writing on the side. But she’s done. Future college-goers can only learn from this example to help them make better decisions.
low return on investment
As a parent who attended a public college, this kind of situation Patty faces is worrying for her children.
What if my kids were kicked out of the top 50 colleges after 13 years of private elementary school? What if you end up with low wages or underemployment? This seems to happen all the time.
As a financial samurai, I can’t help but notice: return on investment (ROI) accounts for most of the fiscal expenditure. Paying for college and devoting all his time to earning a degree are he two of the greatest investments a person can make.
Unless your family is already wealthy or you are receiving scholarships, it is wiser to avoid debt and attend a cheap college.
fear of parental failure
Parenting is hard. Because you don’t fully know how good a parent you are until your kids are independent.
The idea of rights can have a way of creeping up on children who grow up in secure homes. But if my kids don’t understand the importance of meeting their obligations, I feel like I’m a failing FIRE parent.
Most people don’t have the privilege of attending two private colleges and pursuing a writing career in one of America’s most expensive cities. It would be a mistake to not appreciate such luxuries and expect others to pay for them.
Having this take-for-granted attitude would mean that all the guidance we gave our children growing up didn’t stick. So all the trips we took to give them perspective didn’t matter. And all the money we spent on their education just kept them protected.
But finding shelter in the real world is hard. Everyone is fighting to move forward!
Feeling entitled to free money undermines your wealth
We understand that everyone wants to get something for free. Even I find it hard to turn down a rubber chicken lunch until I’ve calculated the value of my time.
However, when borrowing money, whether from a friend or an institution, it is a disgrace to not repay the lender. If everyone felt that way, interest rates would skyrocket and the entire banking system would collapse. Only wealthy and well-connected people can get loans.
In return, we must honor our contract. Another party decided to take a risk against us. We have read and understood the terms of the loan. If you were given three years of grace, you should be grateful. And when it comes time to pay off our debts, we seriously need to pay them back.
Once you adopt an entitlement mindset, you may be deprived of a brighter, more prosperous future. If you continue to expect everything to be given, you will eventually be disappointed because not everyone will agree with your rights.
Examples where entitlement may lead to sub-optimal outcomes
- They don’t study as hard in high school because they expect to get into college based on their identity and social status. However, the year you apply, the admissions office decides to give more weight to merit.
- Your mom was the senior vice president of a company, so you haven’t practiced your interviewing skills. However, in the year she applied the hiring policy, she broke away from nepotism.
- You don’t build a strong network of supporters at work because you think your work is good enough to bring you a big promotion. But no one promotes an aloof and uncooperative colleague, so you get passed.
- You don’t save enough for retirement because you expect Social Security to cover all your retirement expenses. But when you reach your 60s, the government will delay your full retirement age by 5 years.
- We’re not building passive investment income streams because we expect work to always be there. But when the recession hits, your boss rescues your secret lover and decides to fire you.
- You don’t market your product because you expect everyone to support your work once it’s launched. But the world is an incredibly noisy place, and even your best work won’t get noticed without enough publicity, so your product will fail.
nothing is given, all is earned
It is better to have a mindset of “nothing is given, all is taken”. If you adopt this mindset, you will approach life with this attitude: force position.
Once my sense of entitlement took hold, I wondered how I turned down five job offers, wrote a best-selling book, and built my own library in New York City while complaining about having to pay off student loan debt. You might end up doing weird things, like posting what you built on Twitter. Apartment! Yes, this is Patty with the same title as above.
A sense of entitlement lowers self-awareness. Or maybe people who lack sufficient self-awareness have a greater sense of entitlement. Maybe it’s the same reason some people always believe they’re part of the middle class, no matter how wealthy they become.
It doesn’t matter if you don’t feel entitled or if no one gives you a leg up. You didn’t expect any help in the first place. Take action to get what you want instead of always waiting for something to happen.
If by any chance something happens, like getting a three-year deferment on your student loan payments, you’ll be incredibly grateful. And the more grateful you are, the happier and richer you feel.
Reader Questions and Suggestions
How can the idea of entitlement be mitigated? Is it the idea of entitlement that causes future generations to squander the hard work and fortune of previous generations? Expect more for free?
If you want to learn how to negotiate your retirement and find out how to put money in your pocket and be free, pick up How To Engineer Your Layoff. The biggest reason I left his high-paying job in 2012 and never came back was negotiating severance pay.Save $10 with code ‘saveten’ check out.
For more nuanced personal financial content, join over 60,000 other users and sign up for our free Financial Samurai newsletter and email submissions. Financial Samurai is one of the largest independent personal finance sites launched in 2009.
