Have you ever felt like you’re the lead character in a movie playing on slow motion? You know, like you can see yourself making a mistake, but can’t stop it from happening? Well, here’s my $30,000 student loan mistake:
8 years ago on a cold rainy morning in May, my family proudly watched me march across the stage and shake hands with my University’s president. As I posed for my photo, freshly printed diploma in hand, I had no idea how my student debt would impact my life. It wasn’t until 3 months later, when I actually started receiving the bills in the mail, that I realized how much of a financial mess I was in. Owing so much money felt daunting. I felt like someone had punched me in the stomach and I couldn’t catch my breath.
You’d think that’s when I’d get my financial “act” together, right? $20,000 in non-defaultable debt at age 22 should have snapped me back into reality pretty quick. But it didn’t. I was young, stupid and irresponsible. Instead of buckling down and paying off my debt, I decided that I wanted to go back to school to get my graduate degree. Add another 10K to my undergraduate debt and I was hovering at just over $30k. $30,304.87 to be exact, but who’s counting right?
Shortly after I earned my masters degree, I ran a few numbers in an online loan calculator program and, “learned” that I’d owe nearly $350 per month and would pay back $11,500 in interest alone. Ouch! You’d think that somebody would have told me that when I signed up for $30K in student loans, right? Oh yeah, They DID! But was I paying attention? NO! I signed on the dotted line and didn’t even think about what the future payments or consequences would be. I figured I’d worry about that, “later”. Well later came quicker then I’d thought…Look for a post next week detailing how I came to my senses and paid off $30k in student loan debt.
Did You Take Out Student Loans? Do You Wish You Hadn’t?
| Loan Balance: | $30,000.00 |
| Adjusted Loan Balance: | $30,000.00 |
| Loan Interest Rate: | 6.80% |
| Loan Fees: | 0.00% |
| Loan Term: | 10 years |
| Minimum Payment: | $50.00 |
| Total Years in College: | 4 years |
| Average Debt per Year: | $7,500.00 |
| Monthly Loan Payment: | $345.24 |
| Number of Payments: | 120 |
| Cumulative Payments: | $41,428.97 |
| Total Interest Paid: | $11,428.97 |
Image: DoobyBrain
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Glen @ Monster Piggy Bank
February 11, 2013 at 6:25 am (UTC -4) Link to this comment
I ended up paying all my student debt up front as I knew I didn’t want to be saddled with all the interest repayments.
KK
February 11, 2013 at 9:05 pm (UTC -4) Link to this comment
An excellent plan! Interest is no fun to say the least.
Michelle
February 11, 2013 at 8:23 am (UTC -4) Link to this comment
I made a super long post about my student loans a while ago too (http://www.makingsenseofcents.com/2012/11/student-loan-plan.html)! I’m working on having my student loans gone by next month, and possibly April at the latest. I can’t wait until they’re gone because I hate them so much.
KK
February 11, 2013 at 9:07 pm (UTC -4) Link to this comment
Woo hoo! Two months until student debt freedom! When I made my final payment I practically threw a party I was so excited. Getting that “monkey” off your back feels so good.
Laurie @thefrugalfarmer
February 11, 2013 at 8:24 am (UTC -4) Link to this comment
Oh, KK, I get how you feel, even if our debt wasn’t student loan debt but other debt. I suppose though, what’s done is done, right? You’ll (and we will) be out of debt before we know it.
KK
February 11, 2013 at 9:08 pm (UTC -4) Link to this comment
Thanks Laurie. I’m debt free now, watch for a post next week that details how I paid off my loans. Keep plugging away, slow and steady (or fast and steady if you can do it) wins the debt race.
Edgar @ Degrees and Debt
February 11, 2013 at 9:53 am (UTC -4) Link to this comment
I wish I had those kind of numbers
I paid for my entire undergrad and grad school with loans (very little but a bit with credit cards) and now have $122,000 in student loan debt.
KK
February 11, 2013 at 9:10 pm (UTC -4) Link to this comment
Many of my friends are in similar financial spot as you. Although my debt felt huge, I totally recognize and respect that I was fortunate to “only” have $30K in student loans. Many many people have so much more. You’ll get there, just keep fighting to pay them down.
debtperception
February 11, 2013 at 12:10 pm (UTC -4) Link to this comment
You better believe I wish I hadn’t taken out $79,000 in student loans ($96k easily after interest capitalized)! The biggest mistake of my life, next to falling for a for-profit school and believing their lies!
KK
February 11, 2013 at 9:11 pm (UTC -4) Link to this comment
Ugg don’t even get me started on the for-profit schools. I’m sorry that happened to you. You’ll beat them, it’s not easy, but you’re motivated and dedicated, so you’ll do it.
Mackenzie
February 11, 2013 at 12:14 pm (UTC -4) Link to this comment
I didn’t take out student loans for college, but one of my friends who did, stopped making payments towards it and they ended up atttaching themselves to her paycheck and getting their money that way. Student loans are no joke…
KK
February 11, 2013 at 9:13 pm (UTC -4) Link to this comment
For real, you can’t bankrupt them and they will follow you until you die. Pretty scary really.
Pauline
February 11, 2013 at 1:03 pm (UTC -4) Link to this comment
ouch! I was lucky not to take out loans, but tuition was cheap. I paid for all my living expenses with jobs and graduated with $25K in savings. It impacted my grades a bit as I didn’t study as much as a student with no job but I did pretty good and am rarely using my degree anyway..
KK
February 11, 2013 at 9:17 pm (UTC -4) Link to this comment
What a “novel” idea, pay for your living expenses out of pocket, work while you go to school and chose a school with reasonable tuition rates. Pauline, you are my hero. You did exactly what I should have done and what I now encourage other people to do.
Jana @ Daily Money Shot
February 11, 2013 at 4:46 pm (UTC -4) Link to this comment
I don’t have loans from either undergraduate or grad school but my husband has loans from both. He wasn’t very responsible with his undergraduate loans and took out way more than he needed to “live”, even though he had a job (or 2). He was better with his grad school loans, particularly once his scholarship came through and he didn’t need loans, but the $40K we’re paying down? Not fun at all.
KK
February 11, 2013 at 9:19 pm (UTC -4) Link to this comment
Ugg, I have an upcoming post about paying student loans when one partner has none and the other has a bunch. Good for you for hanging in there with him and paying it down.
Girl Meets Debt
February 11, 2013 at 10:00 pm (UTC -4) Link to this comment
I don’t regret my student loans because it was the only way I could afford my university education but I do regret spending the extra loan money on stupid things like drinking and clubbing. But you live and learn I guess.
P.S. I can’t wait to read your post on when one partner has none and the other has a bunch!
KK
February 12, 2013 at 10:06 pm (UTC -4) Link to this comment
I took more then I needed in undergrad, but thankfully by the time I got to grad school I recognized I’d have to pay that money back. That drinking and clubbing has probably turned out to be the most expensive drinking and clubbing I ever did
C The Writer
February 12, 2013 at 10:11 am (UTC -4) Link to this comment
Yes. I took out $41,726 in student loans and now it’s up to nearly $46,000. I would honestly give my degree back to get rid of the debt. I wish I could have included it in bankruptcy. I really don’t like having it.
KK
February 12, 2013 at 10:07 pm (UTC -4) Link to this comment
yup, that’s part of what makes student loans so scary, they aren’t bankruptable. Hang in there, you’ll make it through.
Savvy Scot
February 12, 2013 at 2:04 pm (UTC -4) Link to this comment
6.8% rate is crazy!! You will hate me for saying this, but as Scottish people we don’t pay tuition at all – we get it paid for by the government!
KK
February 12, 2013 at 10:10 pm (UTC -4) Link to this comment
No hate here, I’m glad for you. I wish that the states would catch on and catch up with other countries and the ways they manage education. It’s insane how much we spend on school, and the honest truth is that our high school diplomas don’t really mean much anymore. We’re way behind other countries and need to catch up. Sad!
C The Writer
February 13, 2013 at 1:32 am (UTC -4) Link to this comment
No hate from me. Mine is reserved for the government, my school, and for people in the U.S. whose parents pay for their education. Haha.
Jacob @ iHeartBudgets
February 12, 2013 at 3:46 pm (UTC -4) Link to this comment
I had enough cash to pay off my student loans, but still borrowed $16k for no real reason. Pretty dumb. Now, of course, i don’t have the cash to pay them off….ugh!
KK
February 12, 2013 at 10:15 pm (UTC -4) Link to this comment
Ah hindsight is 20-20 right? I sure have made my fair share of dumb mistakes. Student loans was one of many.
Catherine
February 13, 2013 at 7:58 am (UTC -4) Link to this comment
Funny, I’m in the process of writing about my experience w/ school loans…I’ll gladly trade your 30 k for my 100k….
KK
February 14, 2013 at 9:42 am (UTC -4) Link to this comment
I’m all set, thanks
Brick By Brick Investing | Marvin
February 13, 2013 at 10:42 pm (UTC -4) Link to this comment
Luckily I was able to have the Army pay for my education. I’m very interested to see how you tackled this debt. Don’t beat yourself up too much, because of the lack of financial education in our public schools a lot of loan officers (in my opinion) take advantage of young ambitious men & women who want an education.
KK
February 14, 2013 at 9:45 am (UTC -4) Link to this comment
Very smart. I think there’s a lot of folks who could and should take advantage of the military. Teaches good self-discipline and also pays for your education, a win-win if you’re the type of person who would do well in that environment. My grandfather told me the other day his biggest regret was not getting an education with the GI bill. It made me kind of sad.
No beating up here. Debt is paid, lesson learned. Now I’m just talking to everybody I know about how to avoid student loans and not put themselves into a mess it takes years to clean up.
Sarah
February 15, 2013 at 1:53 pm (UTC -4) Link to this comment
I graduated debt-free (full scholarship), but my husband took out about $50K in student loans for his degree at RIT.
To be fair, he got a great job straight out of college (paid internship that went full-time when he graduated) while I’m still working two jobs to make ends meet. So his degree was definitely worthwhile.
However, the fact that we’re throwing away over $500 per month on his student loans really sucks (for lack of a better word)… and that’s just the minimum payment!
KK
February 16, 2013 at 11:55 am (UTC -4) Link to this comment
Good for you! Full scholarships are definitely the way to go if you can get one. Paying back student loans is pretty painful, but at least your husband got a good job as a result of his degree/education.
Brian @ Luke1428
February 15, 2013 at 5:20 pm (UTC -4) Link to this comment
Funny how our mind tricks us into thinking that things will always be better later. Often they are much worse. Looking forward to hearing the rest of your story.
KK
February 16, 2013 at 11:56 am (UTC -4) Link to this comment
Thanks Brain. Yeah our minds do funny things. Stay tuned
Jerry
February 17, 2013 at 9:11 pm (UTC -4) Link to this comment
Ach! I’m still paying on my student loans. But, I’m making progress which I know is insurance for the rest of my goals. It can lead to some sleepless nights knowing how much you owe but slowly and steadily it’s getting taken care of.
KK
February 18, 2013 at 9:12 pm (UTC -4) Link to this comment
It’s a tough journey, hang in there. Once they’re paid you’ll sleep so much better!
robert leabo
February 25, 2013 at 8:41 pm (UTC -4) Link to this comment
I’m basically in the same boat: i graduated in May and in November had to start making the payments… I only worked part-time at Target so really couldn’t afford rent+ utilities+ student loans… so naturally I dinged up my credit card really bad to help sustain me. In December I came to the realization that I didn’t want to do this anymore, so decided to sign up for my master’s degree– which is where I am now– because I knew, I could at least defer the loans while in school. I’m getting my master’s degree in 2014 in education, I’ll be certified in NY grades 1-6 so at least there’s more of an opportunity for me to travel around and get a job vs being certified in only one subject. I’m *hoping* to get something decent right after I graduate in May so I can move during the summer and start fall 2014, because obviously I’ll have to repay the loans in November 2014. Since I receive NO AID for grad school, I had to take out 11K more in loans just for this semester + 10K or so next year so I’m looking at owing around 40,000 when all is said and done. Is that a lot of money? Yes. But it’s an investment… a lot of people borrow all kinds of money for all kinds of things… and look at lawyers and doctors who spend $100,000 financing their education… but it’s worth it in the end, right? At least it used to be. Though with the economy the way it is now, there probably won’t be any jobs next year when I graduate again. (sigh) Maybe I’ll just stay in school forever. Dare to dream!
Financial Black Sheep
March 9, 2013 at 12:06 pm (UTC -4) Link to this comment
Ouch that is a lot of debt. I didn’t have student loans, but had debt from other areas. I never could take loans out for school, even if it means I am in school for another 10 years. I don’t know something about seeing the payments per month made me want to throw up. I am currently still pursuing my degree, but I also have side jobs to help out, so I won’t be taking out ANY loans. I did have a tiny loan for my car and house, but I couldn’t even stand those.
STEVEN J. FROMM, ATTORNEY, LL.M. (TAXATION)
March 17, 2013 at 12:33 pm (UTC -4) Link to this comment
This is the new “gotcha” for our newly minted graduates. Here is a question: If you knew what you know now, would you have done anything different. Would you have gotten a job while at college? Would you have gotten a summer job?
The silver lining here is that you got these degrees and your debt is not just stupid credit card debt.
KK
March 19, 2013 at 9:38 am (UTC -4) Link to this comment
True true. The irony is, I’ve never had any sort of credit card debt and haven’t gotten myself into any “money trouble” so to speak, except for taking out student loans. Knowing what I know now I probably would have gone to a cheaper university (instate). I did work during school and summers and made pretty decent money for a kid, but I could have worked more hours during the school year.
vanessa
April 30, 2013 at 10:44 pm (UTC -4) Link to this comment
this is so scary for me.. I am a senior in high school and I got into UC Davis. I accepted the admission with the dreadful and miserable thought of being 36,000 ( estimate) dollars in debt for those four years… im starting to feel if it was a mistake, if I should’ve gone to community college. what if I cant pay it off? what if I don’t get a good job after I graduate? what about my masters degree???
KK
May 2, 2013 at 10:53 pm (UTC -4) Link to this comment
If you know what you want to do (and it will pay you a decent salary in proportion to the debt) then it might not be the worst thing to take out the loans. What I learned from my mistakes are: pay for your living expenses if you can (don’t take out loans for them-get a job or do whatever you have to do to avoid loans), chose a school you can afford, and be sure about what you want to do when you graduate. If you’re unsure about what you want to do, or will go into a profession that doesn’t pay well I’d consider community college for a couple of years first. With the job market being what it is, you don’t want to dig yourself into a hole you can’t shovel yourself out of
Shoot me an e-mail if you have questions I might be able to help you with. And congrats on your acceptance!
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