I recently watched a video on Pete the Planner‘s website featuring a segment he did on WishTV regarding avoiding student loans. I instantly wished that he had been my BFF when I was 18 and had talked me out of every federal education loan and SallieMae loan I was going to take out over the next 5 years of my life. So, when his Facebook and blog posts regarding the subject began blowing up with negative comments I was really confused. Surely I can’t be the ONLY one who feels some regret for or struggles with my student loan debt.
Out of natural curiousity, I put up a Craiglist ad asking interested individuals with $40,000 or more in student loans to do an interview with me for a blog post. Several people e-mailed me, often late at night, giving minor details, asking where this would be published, and if they could remain anonymous because no one else in their life really knows about their struggles. I would always respond, however their second thoughts seemed to scare them all off, but those e-mails were enough to make me realize that student loan debt is still a scary topic. No one knows how to talk about it, most people probably regret it, and a lot of people are slaves to student loans while in pursuit of their dreams (after all, how else are you supposed to afford the university of your dreams?!) So naturally, when someone (like Pete the Planner) takes such a strong stance against something that many see as their only vessel to success, there is going to be negative reaction.
I am going to share my personal story in defense of Pete the Planner’s stance on avoiding student loans. Pete the Planner has no idea that I am writing this, he didn’t endorse it, and I haven’t even read his most recent book regarding student loans. However, I feel so strongly about what he is preached in that 5 minute video that if I can get one future college student to think twice about borrowing way too much in student loans, then I want to share my story.
I was an average high school student, and never really planned ahead for college. As a senior, I decided to go to Ball State University. I applied to Ball State, and Ball State alone. I was accepted, and that was that. I didn’t research options or costs. My parents were supportive, but left the decision to me. As far as the cost, I feel like as a family we were all kind of naive. My parents attended college during a very different time and they were able to afford tuition with part time jobs, and worked themselves through college. Student loans and financing college was something none of us really knew much about. I was their first daughter to head off to a 4 year school, and student loans seemed to be the only option to finance that dream.
The process was simple:
- Fill out FAFSA
- Get check in mail
- Pay BSU
- Pay monthly expenses with the rest
I was clearing about $1600 a month after taxes. I set myself up with a nice little apartment and started assimilating into the adult world. I wasn’t making much money, but I was doing well enough to provide for myself. I thought I had it made.
“Bring on the student loan payments!”, I thought. “I can afford loan payments!”
I got my first student loan bill in the mail December 2007. I opened it expecting an affordable bill. The reality was much different…
Amount due by January 2008: $600.12
Then came the bill from SallieMae.
Amount due by January 2008: $200.34
During my 5 years in college, I had amassed well over $40,000 in student loans. I had no idea. No idea that my minimum payments would be so high and no idea that I had accumulated so much debt in 5 years…and no idea how I was going to pay it every month and still be independent of my parents. Over the next 6 years, which would bring us to present day, I would work with my lenders to reduce my payments to something I could afford, fall back on forbearance twice, and do my very best to pay back the student loans as I worked my butt off to pursue my career dreams and financial success.
Present day, I do extremely well for myself in relation to others my age, I work hard, and I am just now at a point financially where I can truly afford the payment I owe on my student loans. Due to my lack of sufficient income during the past 6 years, my student loan balance is still close to $40,000…despite the fact that I have paid them what I could afford every month for 6 years. I am looking forward to paying that off quickly over the next 5 years (God willing that I continue to find success and continue to manage my finances responsibly).
How This Relates to Pete’s Message
The dialogue that Pete the Planner is trying to start isn’t about NOT going to college. No one in their right mind would tell you not to go to college. Despite how I feel about student loans, I don’t ever look back on my college years and regret the education or experiences I had at Ball State. Pete the Planner is trying to encourage people to do their research and really understand what these student loans are going to mean to you financially 5, 10, and even 15 years after you graduate from school. If someone had sat me down at 18 and said, “Look, you’re going to write a check for over $500 every month for this education for the next 10 years…are you sure you don’t want to find a way to do this without loans?” I may have done more research into other schools or scholarships. I may have seriously considered the option of living with my parents and attending Ivy Tech. I may have worked a little harder while I was in college and tried to pay down the balances as I went. I never would have NOT received my education, but I know for fact that if I knew what I know now, I would have found a different way to pay for my education.
My story isn’t really horrific. In fact, consider it the best case scenario for someone with student loans. I make a great salary, don’t have kids to provide for, I’ve never suffered unemployment and I’ve always been able to scrape together enough money to pay back what myself and my lenders had agreed upon. No matter how well my situation seems, it still hurts every month to write out that check for my student loans. I could do a lot of fun stuff with an extra $10k every year…like…oh, I dunno…beef up my savings, invest in my 401k or real estate, or travel to Europe.
If you and your child are preparing for their college career, I strongly encourage (almost beg!) you to listen to the advice that Pete the Planner is sharing with you. These student loans are not fun to pay back, and they are a thorn in my financial side. Looking back, I wish someone had taken the time with me to really help me understand what I was committing to before I ever signed the back of a check from SallieMae or the Dept of Ed. It doesn’t mean you have to take his advice, but at least give yourself and your child the benefit of understanding what their financial situation is going to be after graduation day.
Do you have a student loan story to share? Click here to join the conversation and leave your story in the comments