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“The Killer Comes in the Private Loans.”

Michael Macrae knows a lot of about student debt. The 20-year-old government major recently interned with a local initiative that aims to reform the financial aid system, but the policy work was more than just a line on his resume. As a junior at a private university in downtown Boston, Macrae has his own student debt to reckon with.

“I will probably be graduating with…” Macrae said, pausing. His sharp blue eyes turned upwards as he mentally added his current and future expenses. “We’re probably looking at $52 to $55,000, before interest,” he concluded. With a smile that fills his face, Macrae tacked on some sarcastic laughter to that oppressive statement.

And why not laugh about it? Student debt in this country has reached a hilarious all-time high. Across the United States, university graduates owe a total of roughly $1.4 trillion in student loans. The average student has just over $30,000 in debt. This places Macrae on the high end, but the Suffolk University junior has always been realistic about his family’s finances.

“Loans are going to happen,” Macrae remembers thinking as a high school senior. “Let’s not fight that part. Let’s fight the out-of-pocket costs.”

Before he came to Suffolk University, Macrae was a theatre major at Seton Hall University in New Jersey. Even with a scholarship, Seton Hall required Macrae to take out $8,000 in federal loans and cost his family $1,600 per month on a payment plan.

“Suddenly my family was paying double what they had been paying just on a mortgage,” said Macrae.

In that sense, it was fortunate Macrae hated Jersey. In the spring of 2016, he transferred to Suffolk University and switched his area of study from theatre to government – a financially convenient change of interest. With a career in the public sector, Macrae can qualify for PSLF: Public Service Loan Forgiveness.  Under this program, anyone who works in an eligible nonprofit or government agency and makes ten years of loan payments on time, without defaulting, can have the remainder of their student debt forgiven. A clean slate. For someone who wants to go into public service, PSLF is a massive perk.

“I didn’t think that I brought much to the table in terms of performance, in that I enjoy playing myself and not playing other characters,” said Macrae of his start in theatre. “Public service gave me the opportunity to kind of play myself and still change things.”

The change of study set Macrae up for a more financially stable future, and the change of location allowed him to commute from his family’s home in Quincy, Massachusetts. Plus, a new school meant a whole new financial aid package. Macrae received $18,000 per year through Suffolk’s Dean’s Scholarship and several thousand more through government grants. The rest of Suffolk’s nearly $40,000 tuition was paid with federal Stafford loans, both subsidized and unsubsidized. There were no out-of-pocket costs. Overall, Suffolk gave him a better deal than Seton Hall, but that wasn’t happily ever after for Macrae’s bank account.

The following semester, Macrae received a letter from Suffolk University’s financial aid office stating that one of his subsidized federal loans was replaced with a Suffolk institutional loan. This meant the borrowed money would start earning interest immediately—instead of after graduation as with a subsidized loan—and it would be doing so at a higher rate. Not only this, but Suffolk loans are private, meaning they’re not eligible for forgiveness through PSLF. Switching a federal subsidized loan to an institutional loan means Macrae will owe more over time, with no options for loan forgiveness. Despite the impact this has a student’s financial future, the university can legally make this change without the student’s permission.

“It’s just part of our underregulated student debt system,” said Macrae calmly.

The curve balls didn’t end there. In fall 2017, Macrae decided to take out a private loan from Wells Fargo. The money allowed him to rent the apartment he now shares with two friends in East Boston, instead of commuting from home.

“Private loans suck, but… I’d rather be happy and pay it off later,” said Macrae, noting that while he loves his family, it was time to move out on his own.

This leaves Macrae with loans from three different sources: the federal government, Suffolk University, and Wells Fargo. His Stafford loans currently have a balance of nearly $19,000, and those that are unsubsidized have already accrued $400 in interest. His total debt in the private sector, which is not eligible for PSLF, is $18,000 plus interest. As a junior, Macrae still plans to take out more loans for summer classes and his final year of undergrad.

“It’s not super uplifting,” said Macrae, who is already planning on how to start paying back his loans after graduation next year. As a public employee just entering the workforce, he isn’t expecting to have an overwhelmingly high salary, so Macrae plans to start with paying the lowest possible monthly installments. While smaller payments mean the loans will be earning more on interest, Macrae feels this can be managed down the line, when he’s more experienced, earning a larger salary, and can afford larger monthly payments.

“What’s more important to me is surviving at the beginning of the career,” he said. “There’s no point in making yourself miserable for years and years trying to repay it all because you don’t want to pay any extra interest. I’d rather pay the interest when I’m making significantly more.”

With this plan, Macrae expects he’ll pay roughly $17,000 of his federal loans over the first ten years, and then around $10,000 will be forgiven through PSLF. The private loans, however, cannot be forgiven. That’ll be somewhere around $20,000 that he’ll owe, regardless of where he ends up after college.

“The killer comes in the private loans,” says Macrae. While his words carry weight, his voice remains even, accepting of the debt the educational system has forced upon him and other students.

Macrae makes the most of the situation. Right now, he’s interning with the office of the State Senate President under Boston’s golden dome, learning the exact kind of work he intends to do after graduation. Next year, he’ll take the LSATs. Since the scores are valid for five years, he can take some time to get field experience and save more money before considering graduate school. Suffolk offers a 5-year program for masters, but this would have cost Macrae another $20,000, something he wasn’t able to afford. A break between undergraduate and graduate school wasn’t in the original plan, but Macrae’s finances helped make the decision for him.

“The system sucks,” said Macrae, as blunt and sensible as ever. “The student loan system is unmanageable. Nobody was every supposed to be able to pay this much money every single month. So, you know what? Screw the system. We’ve got to make it work for ourselves. You’ve got to afford to live.”

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