My Ongoing Experience with Student Loans

The only thing I regret about taking student loans is that I didn’t monitor how much I took and should have took less over my academic career. I consider myself financially savvy but I didn’t foresee that taking out student loans would have such a financial impact on my future. My debt isn’t that bad when you consider it ($21 k) but my parent’s PLUS loans are the main issues sitting at over $50k which in total is almost $80k for a PUBLIC school education. The reality is that I should be no where near this number because tuition each year is around $10k and there is no way that living expenses will reach up to another $10k. I know this because the last few years I started to learn and there was a term (11 weeks) where my living expenses were less than $2,000. One thing I am grateful for is that the student loans allowed me to fully enjoy my college career because I didn’t need money from a second job to help me stay in school. This gave me the time  to party and study without giving me the prior commitment of going to work. On the downside, it gave me a lot of free time which I didn’t always use in the most productive manner but hey, its college! So would I have traded this debt for a lesser college experience? No because I had such a blast with all my friends and I think having the loans allowed me to focus more on school and not on my surrounding finances. I’ve read that the main culprit for why people drop out of college is not because they are incapable of handling the course load but because they run out of financial funds.

Now that I have graduated and can finally see with a clear vision of what my debt truly is, I’m a little shocked at the amount I was able to amass. I decided to take on my parent’s PLUS loan because it seems only right with living at their house free of rent, car insurance payments, and grocery payments. This one is going to take the longest to pay down just because the interest rate is 7.9% compared to 5.2% for my own loans. One of the thing I hate most in this life is paying interest!! But I don’t foresee any other way around it unless I went the lottery sometime in the near future. I have decided to live a frugal life and spend the majority of my dispensable income on paying off my student loans. The loans are slated to be paid off in 25 years but I’m hoping to have ALL of my student loans paid off within 3 years. The main reason I’m attempting to do this is because of the higher-than-expected salary I was offered. Hopefully I can stick through this plan and pay off my debt as quick as possible so that I can start saving up money for retirement, buying a house someday, my daughter’s education, and some spending cash if I decide to go back to school.

So here are some things that I learned about student loans:
1. Take more money the first 2 years and then the 2 last years should only be enough for you to survive. The best years of college for me was 1 & 2 and then partying got a little boring after that and it was time to focus on studying and graduating. So take the money to be able to live your college career (you’re only young once) to the fullest and then be more mature about taking loans as college comes to an end.
2. Stick with FEDERAL loans and avoid PRIVATE loans. The good thing about federal loans is they have many repayment options and are usually more flexible when it comes to complications. I’ve heard horror stories about private loans but if you have no option then try to find one with the lowest possible interest rate and be sure to do your homework/research.
3. Take a student loan seminar to know all your rights and responsibilities so you won’t be surprised when you graduate.

Please be cautious when taking out your student loans and learn quickly about how to balance your college experience and what you can financially afford in the future. It will be difficult but you future self will thank you dearly!

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