Getting a New Degree or Sticking with What You Have?

I understand your dilemma. You have amassed a substantial 120,000 in student loan debt and hold a master's degree. You're considering whether to take the plunge and pursue a new degree in an entirely unrelated field. Before you make any drastic moves, let's break down the financial and practical implications of both paths.

Considering Your Financial Situation

First, let's tackle the financial aspect of your current situation. Assuming your student loan is at the federal Stafford unsub rate of around 6.8%, your monthly payment would be approximately $1,381 if you opt for a 10-year repayment plan. While this might seem daunting, let's look at how you can manage this debt more effectively.

Compelling Case for Earning Potential

Let's start by considering your earning potential. If you aim for a salary of around 45,000 per year, your take-home pay would be approximately $3,000 per month after taxes. By setting aside $1,500 for living expenses and paying around $1,000 for rent, $125 for weekly expenses like gas and groceries, you can pay off your debt in 10 years. Of course, these numbers assume no further financial strain over that period.

Rising Income Scenarios

However, it's important to recognize that a higher salary can make a significant difference. With an annual salary of 75,000, your monthly take-home pay would be closer to $4,500. This means you could not only pay off your debt but also save, invest, or even live a more comfortable lifestyle.

Contributing to Society with Steady Employment

I understand the desire for passion and personal fulfillment. It's understandable to want to follow your heart. However, at the moment, being unemployed can hinder your ability to contribute to society in substantial ways. It's essential to secure steady employment before considering any further education.

Look for programs that offer loan forgiveness, particularly those in areas with high demand for teachers. Teaching in hard-to-staff locations can help forgive a portion of your debt, providing a pathway to both financial and social fulfillment. Alternatively, focusing on paying down your debt as quickly as possible, even if it means paying more than the minimum, will reduce the principal and shorten the repayment period.

Feasible Education Options

If you are passionate about psychology, consider part-time masters programs at a city or state university. Avoid private institutions and loans as much as possible. You can take a class a semester, which might extend your timeline, but taking a step-by-step approach can be more financially manageable. If you earn a salary and diligently pay down your debt, you can achieve financial freedom.

Enrolling in part-time education will give you a clearer idea of your passion for a subject. Complete a few classes and gauge if your interest is deep enough to commit to a full degree program. Alternatively, you might find that your curiosity is satisfied after just a couple of classes, allowing you to redirect your efforts elsewhere.

Conclusion and Inspiration

Ultimately, the decision to pursue a new degree should be well-considered. Weigh both the financial benefits and the social impact of your actions. Keep your options open and stay committed to your goals. I wish you the best of luck in your journey and invite you to share your progress with us!