According to a study conducted by The Project on Student Debt, 7 out of 10 college seniors who graduated last year left with more than a new degree–they also acquired an average of $29,400 in student loan debt. That means 70% of college graduates enter the workforce with a net worth that is in the negative because of their student loans. That. Is. Crazy. I was lucky enough to complete four years of college without acquiring any student loan debt thanks to an athletic scholarship and super amazing parents that were able to chip in to cover the rest. Then came graduate school a few states away from my home and with that–unfortunately–I hopped on the student loan debt bandwagon and found myself with a Master’s Degree and $60,000 student loan debt!
Obviously I can’t (and wouldn’t) want to go back and change everything. I LOVED moving to a different part of the country and exploring an environment outside of the one I had lived in for the past 22 years. I LOVED the people I met, the graduate program I went through, and the experience I had. After living it, I can’t say that I would hop in a time machine and make a drastically different grad school decision if the option was there–even to get $60,000 of student loan debt off my chest (gol’ darn emotions and memories). However, looking back with my wise and student loan debt ridden eyes, I can say that there are definitely a few things I wish I would have done a little bit differently…
1. “Budget”: I have always been pretty good about money. I’ve never been a frivolous spender or someone who had no concept of spending less than what you earn, but I didn’t completely understand what a “budget” was. I thought I was on a budget because I KEPT TRACK of what I was spending AFTER I had already spent it. For example, one month (during football season) I spend over $400 on going out to eat, bars, and beer and didn’t know it until AFTER I had already spent it. My thought process was, “Well next month I’ll spend less”. I didn’t always stick to the plan to “spend less” because I was missing the key concept of a “budget”…I didn’t dictate HOW MUCH I was actually going to spend. Keeping track of what I was spending was a starting point, but it didn’t stop my money from disappearing without me knowing where it went.
2. Get a Job. I go back and forth about this one all the time. I was in a program that was more than a full-time job commitment between classes and clinicals, not to mention homework and studying. I had actually applied to 17 jobs during my first semester (and got calls back from a few), but I was living in a college town and just didn’t have the connections I needed to work in the bar and restaurant industry. I felt like bars and restaurants were the way to go since you take home cash that night and can easily make more than minimum wage. Scheduling was a problem because I wasn’t finished with work or clinic until 5pm or later most nights and restaurants wanted me there earlier to begin the dinner service. All excuses aside, between my schedule and my mindset at the time, I should have gotten some sort of job to create some sort of income.
3. Find another way. This is controversial. Dave Ramsey says, “Don’t loan money to family. Give it as a gift or don’t give it at all”. I definitely know that philosophy is completely correct, but I wish I would have tried asking grandparents and parents for some sort of “loan”, even if it was loaning me the money to buy my books each semester or helping me pay my rent each month. I don’t know if this actually would have happened, but if you have family members that have extra money and want to “invest” in your education, ask if they want to loan you some money (you can both sign a written agreement if it makes you feel better) while you’re in school and start paying it back after you graduate at a low interest rate. That way, they’re investing their money wisely (because we know you’re responsible and would pay them back quickly ;-)) AND you don’t have to eat 7% interest from DAY ONE! It’s worth a try!
4. State Schools. This one is SO hard for me to put on here, because I didn’t do it, and wouldn’t do it if I had to do it all over again. I loved the experience that I had, but if you’re someone who’s looking to go back home or stay near home (or in the same state), a state school is the way to go. Most of the time they are great schools and cost way less per month than most others (aka a great value).
5. Work/Study & Internships. This is an easy way to “make money” or get cheaper tuition without a scheduling conflict. Most work/study programs are within your program or will work with your program to make sure your hours don’t conflict with academics. Internships are usually within your program and can range from simple to very involved. Not only are these great ways to make extra money, but it’s a great way to make connection and meet awesome people!
Have you learned any lessons about finance recently?! Follow the “Reply” link at the top of this post to share your thoughts with me and Brittany! If you could reach out to your pre-graduate self to give advice about student loan debt, what would you say?