What It’s Like to Repay All Your Grad School Debt After Your Parents Bankrolled Undergrad

The story of Rachel Johnson, age 33, who works on program support for state prisons in Sacramento, California.

33-year-old woman smiling
Olivia Fields

This is part of Debt Nation, a series of interviews with people about how student loans have shaped their lives. Read the rest here.

Education: Bachelor’s in public health, master’s in public policy
Current job: Works on program support for state prisons
Household income: $270,000
Relationship status: Married, expecting a child
Peak student debt: $53,000 in 2013
Current student debt: $0, last payment was May 2017

I am student loan debt–free. My parents paid for my undergrad education. My mom is in management in the social work field, and my dad works for a trucking company in sales. We were not super wealthy growing up. My parents got a bit of a late start. They met in the Army in training and served together. Then they went to school on the GI Bill. It took them a while to build their professional careers. They didn’t have a ton of savings, so they just paid out of pocket for my education. But because education had been such a help for them, it was really important to them to get me and my two sisters started. The deal was everyone gets undergrad paid for, and then grad school you figure out on your own.

I went to UC Berkeley for undergrad. Tuition at that point was probably $7,000 to $10,000 a semester. They covered that and also living expenses in the Bay Area. I lived cheap, in cooperative housing, but still it was a thing I didn’t have to pay for. All told, I’m estimating that the amount they paid was probably $80,000 or so. But I didn’t have to pay for it, so I didn’t pay that much attention.

My mom has some student loan debt from her graduate education, but the environment is really different now in terms of educational costs. I’m the oldest, so my college experience was my parents’ first time going through the process. My dad has a background in accounting, which was extremely helpful in figuring out, OK, my rent is this month. I get this much monthly from my employment. My scholarship amount is this much, and then books and electric bills and food cost this much. He helped me calculate how much I would have to take out in order to cover the gap between my scholarship and my expenses.

Then I did a master’s in public policy at Georgetown. I had no counseling about loans. Basically you just kind of go online, and you type in how much you want. I had a pretty heavy scholarship there for a lot of my tuition, and I worked part time as well. In the end, I still had about $53,000 in loans. One of the things I thought a lot about was trying to pick a highly regarded institution, because I wanted to have a lot of options when I left grad school to be able to pay off the debt. Because I didn’t have debt from undergrad, that made it a lot easier for me to have flexibility about where I went. For example, I was offered a full-ride scholarship to another school that I turned down even though the financial aid offer was better.

My payments, when I graduated, were roughly $670 a month. And then every couple of months I would throw $500, $1,000 extra at it. I would get my tax refund check, and I would throw that at it. Another thing my parents did for me was they co-signed on a loan and paid a down payment on a house for me in my hometown. That was huge for me, obviously, because I then had this asset, which has now appreciated substantially. They helped subsidize me for a little bit so I could make that monthly student loan payment while still being able to make a monthly payment on this house.

In mid-2015, my husband moved in with me as well. He had a similar amount of debt from his grad school and also no undergrad debt. We’re both high-income earners; we earn relatively the same, about $10,600 each a month. Between our two incomes, our relatively cheap house, and not having to save for a down payment, which is what a lot of our friends were doing at that point, we were able to really aggressively start paying off our loans.

We had been dating maybe for four years when he proposed. I had still probably $15,000 in loans, and he had some savings. He had paid off his loans by then, and we just decided to wipe my loan debt out. And then we were able to start putting the money that would have gone toward student loans toward a wedding and things like vacations.

I did not expect to be making anywhere near this amount of money at this point in my career. It just kind of worked out that way. When I was leaving school, before I decided to come back to California, I’d actually accepted a job working for a consulting firm in D.C., largely just related to the amount of debt I had. When you’re looking at jobs where you can use a public policy degree, consulting way out-earns anything in the public sector. But I wanted to come back to California. My parents helping with the home purchase is the thing that made the decision for me. Paying D.C. rent and paying off my student loans, even working for a consulting firm, it would have taken me forever to get enough money to pay a down payment.

I have about 70 staffers who work for me, and a lot of them are very close in age to me. All our jobs require college educations, so they all have at least a bachelor’s degree, and many have lots of debt. I just feel very grateful for my parents’ help but also guilty for how much opportunity I got and how much advantage I’ve had. It feels so deeply unfair.

My husband and I still have our jobs right now, but I have been thinking about how grateful I am that I’ve paid off that debt and it’s just not a liability that I have to worry about—being pregnant in a pandemic and thinking about having to save money to pay for day care and college funds and things like that. We just bought a new, bigger house, and we thought about selling the old one because we would have gotten a lot of money from the equity. But we decided to hold onto it as a rental property and then by the time our kids are ready to go to school, that property will be paid off, and we’ll just have the rental income. That’s one of our thoughts in terms of paying for a kid to go to school. But yeah, we plan to pay for our kids’ education.

I think there’s this sense that folks who have done what I did and aggressively paid off their loans somehow feel like, “Well, other people should have done that.” That is not how I feel at all. I don’t think we should be allowing people to get into this kind of debt. It’s just outrageous and stupid. I also don’t think education should be this expensive. I would love to see other people’s debt wiped out. This will 100 percent play into who I vote for. My husband and I do not pay enough in taxes. It’s ridiculous. Anyone else who earns like us needs to be paying more in taxes.

Rachel Johnson is a pseudonym.