Today we have a guest post from Ben Barrett of The How to Social Worker. If you’re a social worker interested in developing new career skills, preparing for a job interview, or earning a promotion, be sure to check out Ben’s blog!
In addition to supporting the social work field, Ben also writes about his commitment to promoting mental health awareness and advocating for social justice.
If you’re like me, student loans seemed to be some nebulous term when in school.
Sure, everybody around you talks about just how much they suck.
But despite all the advice that we ignore, we somehow find ourselves in a mess upon graduation.
How much do you owe: $30k… $60k… $100k?
How will someone on a social worker’s salary ever afford student debt like that?
Well, I have some good news and some bad news for you.
The bad news: paying off your student loans as a social worker is going to be difficult.
A bachelor level social worker’s average salary as reported by Payscale.com is $55,779. With a master’s degree, you can expect to earn a bit more.
What compounds this bad news is that you likely don’t want to live like a hermit. Many financial advisers may tell you to – and with your personal situation, it may be necessary.
However, when you are fresh out of school, the last thing you want is more Ramen Noodles.
So if that’s the bad news, how can the good news overcome such a dire situation?
Well, first let’s all agree that we didn’t choose this field for the money. So now that I’ve lowered your expectations some, I’ve devised a list of student loan hacks that you may not have ever heard of.
Your student loans won’t go away overnight, but these hacks will likely provide you with some cushion in your budget. If you find yourself especially frugal and work these hacks with other debt payoff methods like Dave Ramsey’s snowball method or the avalanche method, you likely will be leaps and bounds ahead of your peers.
So, without further ado, here are my student loan hacks for underpaid social workers!
This one is obvious. But let me help you become more realistic.
It’s unlikely you are going to be awarded one scholarship that wipes out nearly all your debt. Instead, you’ll need to implement a few strategies for applying for scholarships.
If you are currently in school, start by asking your department about scholarships. There are often monies available for students for with a wide range of circumstances.
As an example, while in graduate school, I found scholarships for maintaining a GPA above 3.5. I found one for being a non-traditional student. There was even one for simply saying I wanted to work with an underserved population.
The list is endless.
These scholarships may only be a few hundred dollars or… maybe a couple thousand.
The idea isn’t to apply to one and get your debt wiped away. That rarely happens. You want to play your odds because even these smaller scholarships can be competitive.
If you are able to apply for just 10 smaller scholarships, you may only be awarded one or two. That’s still free money that you will no longer have to pay back later.
These scholarships often don’t require you to write a long dissertation. They tend to be shorter and “personal statement”-oriented. With this requirement, applying to ten different scholarships is definitely doable.
This is a pretty popular method for paying off Department of Education loans. Once you’re immediately out of school, look to consolidate these loans. You cannot begin the 10-year clock until you do!
If you’re not familiar with 10-year forgiveness, here’s the long and short of it.
You must first work in an approved public service position. This generally would be at a community health location, Federal Qualified Health Center, probation, parole, and other similar positions.
It is super important to make sure your job qualifies before you get invested.
If you are working in an approved position, this program requires you to make 120 consecutive payments. You cannot enter forbearance, miss a payment, or try to pay the term amount before the 120 months has elapsed. Any remaining debt owed is forgiven due to your service.
In my opinion, that’s pretty cool. The downfall of this method is that no private loans can be forgiven. And if you’re like me, the 10-year forgiveness may only take care of a fraction of your student debt.
National Health Service Corp
So now it’s time to bust out the big guns.
The National Service Corp is super underutilized and frankly unheard of. A score between 0-25 is given to qualifying agencies: the higher the score, the more underserved they are.
According to the NHSC website, scholarship money allotted this year to recipients can be as much as $75k for a three-year commitment to your current job!
Eligible disciplines include physicians, dentists, professional counselors, clinical social workers, marriage and family therapists, psychologists, and psychiatric nurse specialists.
In 2018, NHSC reported that smaller denominations – $30k-$50k – can be given to providers with lower scores or who are in more common disciplines.
The requirements are surprisingly pretty inclusive: be a US citizen, be a provider to Medicare and Medicaid, fully trained and full licensure to practice, and be an eligible health professional with qualifying student debt.
So, if you are a recent graduate, you may not qualify for this just yet.
Your best bet is to get your limited license, supervision hours, and take your licensing exam. Once you receive your full license, you will be eligible!
There are very few types of loans that NHSC does not cover. The big upside is that unlike 10-year forgiveness, NHSC will pay your private loans.
To fully drive home the seriousness of this program, I spoke to a co-worker of mine who is currently enrolled in this program.
Once she was accepted, she checked her bank account the next day to find $50,000 sitting there. Her only real commitment was to stay at her current job for the next two years.
If you are laid off, fired, or change jobs to an employer with a lower score, you will likely have to pay back the money. So it is very important that in applying to this program you have job security.
Some employers will offer student loan repayment options. One such organization is the Americorps.
Now, they don’t pay much of a living wage. In fact, on their website, they boast the wage to be a “modest living stipend.” However, there is a big strategy that can be implemented through this organization.
If you can stay on your Ramen Noodle diet for a bit longer, the Americorps can help you make short work of those student loans. This hack lies in tackling the interest your loans accrue over time.
The Americorps has a trust fund to pay its members’ interest on their student loans. Depending on your interest rates, this could be a significant amount of money. With that hard work of yours, your loans aren’t inflating while you sleep!
Although the Americorps alone is a big commitment, finding extra work on the side can really make a dent in your amount owed.
With your loans no longer expanding, you can focus on paying down that principal amount. Now each penny attributed to your loans has a direct reduction to what you owe!
Another simple strategy to implement with this route is making a student loan payment every two weeks.
There are 12 months in a year but 26 biweekly pay periods. So by just paying half your monthly amount every two weeks, over the course of a year, you would have made another full month’s payment.
Using this option might be a heavy burden for some. But if you are fresh out of school and looking to add some experience to your resume, this can be a great option. With the modest living stipend, however, look to family or adding a roommate to make this as impactful as it can be.
In the years that I’ve been out of school, the one cold hard truth is that my student debt will not go away without effort.
For the longest time, I hoped that the loan servicers would have a computer meltdown and wipe away my debt. It didn’t happen.
So unless Tyler Durden steps in, we are all in this for the long haul.
Though long, there are many options out there that can help ease your burden. It certainly will not be easy. After four years of undergrad and likely graduate school, more work is the last thing that you want.
Coming from a social work perspective, we may believe that loans, interest, numbers, and the sort are not in our wheelhouse. To make progress in this area, we have to work smarter not harder. If the options outlined here seem practical in any sense, then there is a way to make it work.
There will not be any single method across the board. Mix and match these options for what suits you and your family. I encourage you to continue doing the work that you do because no one else can or will.
The field needs dedicated professionals; unfortunately, our salaries can detract from that. Yet with the implementation of these methods, your professionalism can outlast the debt hovering over you.
Tackle your student loans head-on!