Student Loans, Investment or Downfall?

Here I am, happy AF I just paid off all my private student loans! In your face Sallimae|Navient| NaviRefi. Glad those suckers are gone…

Here I am, happy AF I just paid off all my private student loans! In your face Sallimae|Navient| NaviRefi. Glad those suckers are gone and although I’m not done paying off my federal loans, this has given me a great sense of achievement.

It’s been almost 10 years since I graduated with my bachelor’s and almost 8 years since I graduated with my Master’s and like many of you, I’m still here paying on this investment that allowed me to attend college.

Investment is a word I often heard when people referred to having a college education–and I get it, I really do. All education, whether formal or not, is a great investment, but at what cost? The people who preached to us that loans were just a minor investment into our better future forgot to tell us that graduating with a degree did not guarantee a high paying job right after college. They forgot to mention that employers will want a degree but will also require extensive experience to bypass mediocre entry-level jobs. They forgot to mention there was a high probability that your first job out of college would not provide enough of a salary to afford all your bills with one income; forcing you to choose between paying your loans or staying at home to afford the other. They also forgot to say that most likely you will have to have a roommate or have a second gig to be able to split your regular expenses. They forgot to tell us that eventually we will have to come to the realization that we will want to buy a home and in order to afford the down payment, many other sacrifices will be made.

Don’t get me wrong, I know I am in a better position due to my education and for that I’m grateful. I knew that nothing was going to be handed to me and hard work was necessary but I wish someone told me more details as to what I should expect after graduation so I could have made a more conscious decision.

I mean, I don’t know how much an 18 year old would listen but I know I would have really considered community college as an option before attending a 4-year institution, I would have applied for more scholarships than the ones I did, I would not have taken the little bit of extra money I received as a refund check, I would have applied to resident assistant positions all 4 years. I would also have probably worked more rather than participate in multiple extra-curricular activities, and I probably would have studied abroad during the semester rather than summer so some grants would have applied.

Those 4 years were some of the best years ever and although I now say I would have made some tweaks if I knew better, I don’t regret the experiences I enjoyed. But as I lived them, I genuinely believed I was going to be able to pay them off very quickly as soon as I got my first job after graduating. Little did I know, life was going to happen. Priorities shifted and although I could have been able to pay off all my loans way sooner if I stayed at home with my parents, I reached a point where I had to leave and renting did not become an option. Saving enough for a down payment and still balancing life while not depriving myself were the ways I chose to live and no regrets on that either.

Would I consider student loans a downfall? Well, no–they allowed me to attain a university education that seems to be a commodity nowadays, it allowed me to make my parents proud and fulfill a dream they were not able to accomplish but fought really hard for all their kids to have. They left a country and their lives for a better opportunity for us and this was just a small price (with interest) that we had to pay. I just still hope that some reform will happen that would allow more young adults to gain the opportunity to finish college without accumulating massive amounts of debt. Tuition continues to rise, universities continue to expand, buildings become more modern, technology continues to update but I don’t really see the education or salaries across professions getting much better. Many say get government out of the student loan business and that would alleviate this crisis we are in, but those same federal or direct loans were the ones that gave me a chance at a better life, so for now all the advice I can leave you with are the ones below.

3 tips to attack your student loans:

  • Check into Public Service Loan Forgiveness Plans. Here is the application if you qualify. Read details here. After making 120 payments (10 years) under a qualified repayment plan, your balance is forgiven. You must work full-time for certain non-profits or government agencies. This is for Direct Loans.
  • Make extra payments when you can, even if you are in an income based plan and the minimum payment is 0, interest accumulates and eventually you still have to pay it off.
  • If you have private loans, make sure you are checking if your rates are variable or fixed, don’t get surprised and check your balances, rates and terms. I suggest a quarterly check-in with your student loans. Get a journal and don’t be afraid to call your service provider with any questions. By doing this, I noticed my best option was to refinance my private loans, for a better fixed rate, shorter term and lower payment, which did not matter at the end because I made it my goal to pay them off in one year after refinancing.

Hope this info was somehow helpful, we will have to deal with these suckers for a while so let’s make sure we have a plan. Hasta la proxima (until next time).

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