How to Thrive in an Era of Unprecedented Student Debt

Ben Joiner
Ben Joiner

Ben Joiner was tinkering with his motorcycle in a parking lot outside his apartment near Washington, D.C., when his life changed. A fellow biking enthusiast approached him, and they started chatting about Joiner’s 92 Kawasaki ZG1000. Eventually, the talk turned to graduate school.

“I’d been wanting to go to business school, but I wasn’t going to because of the cost,” says Joiner, who was working as a consultant in Northern Virginia. The communications and rhetorical studies undergraduate wanted to fuse his love of communications with a broader knowledge of business — but he was already paying roughly $700 per month in undergraduate loans.

“It was awful. It was like paying rent,” Joiner says.

The mysterious motorcycle lover introduced himself as Abhay James , an Isenberg School of Management at UMass Amherst graduate student from India in town for an internship.

“Abhay convinced me to apply to Isenberg because of their tuition-free fellowship program for full-time students. I took the GMAT three weeks later, and I applied as soon as I could,” Joiner says.

The Financial and Psychological Burden of Loans

Joiner’s financial situation is all too common. According to the Bureau of Labor Statistics, student loan debt is the second-largest consumer obligation after mortgages. The Institute for College Access & Success notes that 7 in 10 seniors who graduated from public and nonprofit colleges in 2015 had debt. The number is growing, too. Outstanding student loan balances stood at $1.31 trillion at the end of 2016, according to new research from the Federal Reserve Bank of New York. It’s an enormous burden by any stretch; they found that 11.2 percent of this debt was more than 90 days delinquent or in default.

The financial repercussions for loan borrowers are huge and well-chronicled, of course. But the psychological ramifications of debt are equally crippling, says Chris Nellum, policy director at Young Invincibles, a Washington, D.C.-based nonpartisan research and advocacy organization that focuses in part on student debt.

“Students and young people are delaying major life decisions: mortgages, cars, getting married. We know anecdotally that having debt is a stressor. People have to think about it constantly,” Nellum says.

There’s a domino effect. It worries them, and it impedes their future educational plans. It’s a Catch-22: In an era where a graduate degree provides a vital professional edge, it’s often completely unaffordable.

Stephanie Holt
Photo by Jack Brotman

Paving a Way Forward, Without the Debt

“Student debt has affected my peers [so much],” says Stephanie Holt MBA ’16, 30, who earned an undergraduate economics degree with $140,000 in loans. She says she would have been hamstrung without Isenberg’s full-time MBA fellowship program, in which her tuition was completely covered.

Despite her staggering undergraduate debt, she was driven to return to school. As a management trainee at Sherwin-Williams, she wasn’t advancing as quickly as she would have liked. There was just one problem; many of her loans were private and non-deferrable, so she couldn’t afford to take on additional educational debt while in school — she had to pay off her existing loans instead. Isenberg’s full-time fellowship put a graduate degree within reach, allowing her to avoid more tuition costs.

Now Holt is a marketing and sales operations specialist focusing on analytics at Cisco in Waltham, Massachusetts. Sure, she pays $1,300 on her loans each month. But now she can afford to, thanks to a more lucrative job.

“I’m absolutely glad I went back to school,” she says. “A friend of mine recently asked me if I should leave the workforce and go to Isenberg full-time. I told her, ‘Yes. Absolutely.’”

Holt says the skills she learned and the relationships she formed as a full-time Isenberg MBA student helped her to pivot to an analytics position at Cisco.

“I’d originally considered business school because I wanted to go into finance, but in my first semester at Isenberg, I took a business intelligence class. It completely opened my eyes to a whole new world. We learned data manipulation tools that businesses actually use, and I realized that I like the puzzle of it. I like taking raw data and making sense of it,” she says.

And when it was time to apply for a job at Cisco, Holt was able to apply her business school relationships to land the just the right job offer.

“I appreciated the ability of advisers to sit and work me through it, to give ideas on negotiating, to figure out how much I was worth,” she says, noting that faculty members helped her research salaries for comparable jobs. “Isenberg taught me to stick to my guns and not to back down.”

Many Paths, the Same Drive

Her story mirrors those of Isenberg alumni from diverse walks of life. For each student, a crucial degree transformed from a financially unfeasible dream into a reality, whether they were baseball players from New Jersey or wine exporters from Moldova.

Mike Nemeth
Mike Nemeth

Take Mike Nemeth MBA ’16: The 27-year-old client services manager at RGP Consulting in Parsippany, New Jersey, arrived at Isenberg as a former Minor League baseball player with the Milwaukee Brewers. Banish all thoughts of a lucrative, glamorous sports career, though: “You wouldn’t know I was a pro based on what we got paid,” the former first baseman says with a laugh.

He left pro ball to take a Division One coaching job at the University of Hartford, all while paying down his undergraduate debt. He was eager to explore the business side of athletics, though, particularly at a business school that had a strong focus on sports management.

“I’ve known so many people who’ve put their lives on hold, or who take on debt, to cover their degree. I didn’t need to at Isenberg,” he says.

In fact, he continued to work while finishing up his coursework. After starting full-time at Isenberg and working as a TA for a sports analytics class, he was offered a job at a New Jersey-based baseball start-up. The opportunity was too good to pass up. Nemeth was able to take online classes to keep up with his degree, learning from the same faculty that he knew in person.

“The way the online courses are structured,  you get just as much benefit and knowledge as you would in person — it’s a huge draw,” he says. Despite the switch from full-time to online, he was able to complete his degree on pace.

“When I say Isenberg’s faculty were the best people I’ve been around, it’s true. They were tremendous in helping me graduate on time, they were supportive, and they went out of their way to have my back. Professors treated us as equals,” he says.

Plus, Nemeth was able to pay down his undergraduate debt in a timely way thanks to the fellowship, saving what he estimates to be about $4,000 in interest charges so far. He subsequently left the baseball start-up to a pursue a career in consulting, which he says pairs the problem-solving techniques he honed in school with the people skills he developed during his years an athlete and a coach.

“For me, quite honestly, the ability not to have [debt] tacked on to what I was paying as an undergrad really opened up doors. I cannot imagine taking out another two years’ worth of loans — to think about doubling what I owed. I certainly wouldn’t be able to be paying down my loans from my undergraduate degree,” he says.

Igor Garabajiv MBA ’15, 32, feels the same way. He traveled to Isenberg from Moldova, where he had a successful career in wine and fruit exports. The notion of educational debt is discouraged in the small Eastern European country, he says, but he knew he wanted to study in the United States after spending his high school years here as a transfer student, intrigued by a sense of academic freedom and collaboration.

“My philosophy is that education shouldn’t cost so much. It’s a pillar of society. Some money is normal, but it just shouldn’t be a burden for a young person coming out of school,” Garabajiv says.

Today, he’s a senior supply chain analyst at BJ’s Wholesale Club in Westborough, Massachusetts, where he works closely with several Isenberg alumni. Now he focuses on growing his career instead of paying down loans.

“Borrowing $100,000 would mean that I’d give away some freedom. It’s stress that I wanted to avoid, and now I have the financial liberty to do what I want and to be flexible,” he says.

For Garabajiv and others like him, this sense of freedom will last long after classes are over.

“I have everything awful to say about student loans and debt. But Isenberg, in contrast, offered free tuition. This is such a major contribution to society — and to my life,” says Joiner, the biking enthusiast. “I make money to cover my undergrad debt, and Isenberg has made me marketable enough that I don’t have to worry.”

Now he’s a strategic analytics consultant at MassMutual in Springfield, Massachusetts, a job he secured after his first year of school.

“Isenberg launched me right up,” he says.

And he still has the motorcycle, too.