Have you heard the recent student loan debt statistics? According to Forbes, Student loan debt is now the second highest consumer debt category (2nd only to mortgage loans) and higher than both credit cards and auto loan debts. The actual total US student loan debt is $1.5 TRILLION between 44 million borrowers! The average borrower has a balance of about $37,000. This continues to increase every year. 11.5% of student loans are 90 days or more delinquent (or in default) and the average monthly student loan payment is $393. More than 2 million student loan borrowers have student loan debt greater than $100,000. The US student loan debt is clearly a problem that we need to find a solution for.
What’s crazy, is student loans are not a necessity. There are so many opportunities to fund a college education that we fail to take advantage of. It’s time we start talking about this crisis. Why, you ask? Because I am 1 of the 44 million that contributes to this crisis. Not only am I a statistic, most of my friends and family members that attended college are as well. Student loan debt balances for African-American women take up 111% of their first-year’s income. Women, in general, have to use a higher percentage of their income to pay student loan debt than men.
These statistics affect me directly! We make these significant decisions at the age of 17/18 unbeknownst to us, the impact that it will have on our future. There was absolutely no way I could afford to pay my student loans the year after I graduated. At that time, I probably made about $20,000 a year and my student loans were about 4 times my salary.
I, (like most people I am connected to) have student loan debt, but I refuse to continue to live in that reality. Personally, I have made a decision to intentionally pay off my loans as soon as possible. This isn’t a popular goal because student loans are so normal in my community and making payments towards the loan (20+ years of their lives) is such a popular opinion. I want to help those that have found themselves in student loan debt, break through the feeling of embarrassment, stress, or hopelessness and adopt the thought process that they do not have to live with this mistake for the rest of their lives. People need to know that getting out of student loan debt at an early age is “a thing”. I also want to help those that are currently in college (or will be in the near future) avoid the mistakes that I have made that has accumulated my debt to over $90,000.
Ok, so let’s start this series with a little background about me and why/how I’ve accumulated this much debt.
From the time I can remember, college was a requirement. In my head, elementary, middle school, high school, and college were mandatory to be successful and make your parents proud. And of course, after college comes a “good job”. Not that my parents drilled college into my brain, it was just what I thought you did to be successful. I have always been very driven to be successful and I’ve always worked really hard to make my parents proud, so the next step in life after high school was college. My mother graduated college the year after I began, my father attended college but did not obtain his degree, and my brother (who is 10 years older than me) served in the air force, then obtained his bachelors, and later his masters. I have my bachelor’s degree in Psychology and my Masters in Business Administration.
Although college was a given, how I would pay for it was not. Senior year, I was 17 and was told by my family that I needed to complete the FASFA and see how much I would get for college and I could also apply for scholarships. That direction was perceived as, the FASFA (student loans) were mandatory, and scholarships were optional (like icing on a cake). I had a friend that said her mom was getting the parent plus loan for her, but my mom said absolutely not! I had another friend whose mom stressed not getting any loans, because she (her mom) was still paying off hers. But that was the 1 and only time that I heard anyone speak against student loans. I honestly thought in order to go to college, you HAD to get student loans unless you were valedictorian or the best sports player.
So, I did apply for a scholarship and I received 1 grant. I only received about $15,000 total in scholarships and grants but that was because I didn’t take the time to apply for many. I always knew that I had student loans to fall back on so, I felt like I didn’t want to waste my time applying for scholarships when I had guaranteed money.
I went to an in-state school for 1 year before I had my son. After the birth of my son, I took a semester off before returning for another year and a half. I then moved to Texas and decided to go to a private school. The primary reason I decided on that private school was because when I mentioned it, everyone would say “oh WOW!! You attend UIW? That’s such a good school”. Well that “good school’s” tuition was double the tuition at my prior in state school. I went to that school for about a year (maybe it was just a semester, I can’t remember) but quickly realized that my prior school’s credits did not completely transfer to the private school. I needed an additional .25 credits for each class and would have to retake each class. Starting all over was not an option, so I went back to Ohio to complete my degree and was able to obtain my bachelors degree within that year.
The current tuition at the school in Ohio is about $10,000 a year and the private school’s tuition is currently about $20,000 a year. I also have my Master’s degree but, I am fortunate to work for a company that gives tuition assistance and covers up to $10,000 per year towards college degree(s) and professional designations. In total, my bachelors and Masters degree should have cost about $50,000. But I thought it was a bright idea to take out about $68,000 in student loans between the 2 degrees. So, what did I do with the extra $18,000 I borrowed (plus the $15,000 scholarships and grants)???
My goal was to get the highest refund check possible to fund my lifestyle. I had a job at the local newspaper (making about $20,000 per year, if I remember correctly), but refund checks were like my annual bonuses. I took trips, bought expensive shoes/clothes, paid for new phones/laptops, purchased furniture, I used the refund checks for anything that I could blow my money on.
But that’s not where my bad decisions end. Within the last 14 years (from the time I received my first student loan), I’ve managed to turn $68k into $92k because of 8 mistakes that I made. What were those mistakes? We will discuss that in the next blog post/video.
What were some of the mistakes you made when it comes to student loans and why? I’d love to have an open, honest conversation and start to make student loan debt a part of the past, together!