I have a love hate relationship with my student loans. I hate that they are so much (almost 6 figures), I hate that the payments prevent me from traveling, and I hate that my journey to build wealth is deferred because I have to pay off my student loans. But there are a few things that I love that resulted from student loans….
A $92,000 loan is a house! It is literally a mortgage payment without a roof. Paying $2,000 a month towards an unnecessary debt is more than just bad, it is ugly. All of the mistakes I made (forbearances, delayed payments, consolidations, etc.) turned this situation from bad to ugly. $10,000, $25,000, even $50,000 loans are bad, but loans that are just under 6 figures are UGLY!
Having any debt for 10 years is a bad situation. There are some that believe qualifying for the public service loan forgiveness act (PSLF) makes having student loans a “not so bad” situation because the loans will eventually be forgiven. I agree that this is a great option but this is not the path I want to take. I have already been a slave to this debt for over 10 years and I refuse to continue to be enslaved by this debt for another 10 years.
Let me explain the way PSLF works. Because I have a non-profit with my husband (Brand Of A Champion), I have the option of making minimum payments each month for 10 years (120 qualifying payments) on an income driven repayment plan and having the remaining balance of the loan forgiven. So, let’s say you are working a minimum wage job and based on your income, it is determined that you can only pay $32 month. If you make the $32 payment each month for 120 months, the remaining balance of your loan will be discharged. You have to recertify each year showing proof of your income. If your income increases or decreases, your payments will reflect this change. Personally, my qualifying payments are significantly higher. I have made a total of 22 qualifying payments. If I want to continue making minimum payments, in hopes of getting the loan forgiven, I will have to make 98 additional payments which will take 8 years and 2 months. I am determined to be debt free well before 8 years. Even with the opportunity to have my loans forgiven after 10 years, having student loans at all makes this a bad situation.
The loan itself wasn’t a good idea, but the degrees that were produced as a result of the loan was amazing for my finances. Whether college is necessary is debatable. But what I can say, as a person that hires/fires and a person whose income has tripled because of a college degree, having a degree opens more doors than not. Because of my bachelor’s degree, I was able to get my foot in the door with my current employer which has given me an amazing opportunity to increase my income quickly over the last 8 years. I was able to enter the company 3 positions above entry level, simply because I had a bachelor’s degree (despite the fact that my degree is in psychology and this position had absolutely nothing to do with psychology). My company also offers an education assistance program that provides up to $10,000 per year towards an approved degree. This program paid for my MBA. After obtaining my MBA, my salary tripled.
Having a salary that allows me to pay off my loans in 2-3 years is a win in my book. But I wholeheartedly believe that I would not have had this financial blessing earlier in my career without my degrees which were products of my student loans. So there you have it. My love hate relationship with my student loans, the good, the bad, and the ugly.
What kind of relationship do you have with your student loans? I would love to hear from you!
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