Good morning Dinks. Let me ask you a question, when and why do you use your credit cards? Some people get into debt because they don’t have enough income to pay for all of their expenses and some people get into debt because they have a big expense and they don’t have enough of an emergency savings fund. Some people get into debt because they are buying assets and some other people get into debt because they are investing in themselves in the form of a good education.
When you graduated from college how much debt did you have?
According to Credit Karma 44% of recent college grads have student loan debt. I graduated with approximately $16,000 in student loan debt, a university degree and a full time job at a bank. I worked full time while I was in school and an extra $4000 per year in the form of student loans made my life a little bit easier.
I know that a lot of students graduate with debt, in my opinion education should be affordable for everyone but that’s a whole other issue. An education is always a helpful thing to have but debt is not always worth it. If your profession is not a high earning profession it may take you forever to pay off your student loans. If you can’t afford to pay off your student loans it may be smarter to take less classes each semester, take summer classes and take longer to finish your degree so that you can afford the tuition without taking student loans.
I personally also think that it’s ridiculous that students have to pay for their tuition in a lump sum at the beginning of each semester. I know that my life (and my finances) would have been a lot easier if I could have paid my tuition in biweekly payments throughout the semester, but again, a whole other issue.
When I spend money the cost has to be worth the benefit and this means that I have to get something really great out of it…like a good education.
If you had to do it all over again would you do it differently?
Looking back on my four years in college I wish that I didn’t have to work so much because my personal sanity and my grades definitely suffered. However working full time during university gave me four very valuable years of experience. People do a lot of growing up between the ages of 20 and 24 and I’m glad that I came out with both a university education and four years of work experience.
If I was 20 years old again I don’t think that I would apply for student loans. I realize now that if I knew how to live with only the necessities, cook my own meals and budget I would never have gone into debt for my education. However, I didn’t know any better so when money was offered to me I took it.
Do you regret taking student loans during college?
Photo by Univers beeldbank
Kristina Tahnyak
Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.
While I was in high school, I stopped in my counselor’s office every couple of days and asked for grand and scholarship applications. By the time I headed off to my freshman year, I had my tuition and books paid for. I did have to get a job to pay for my living expenses, but I got a great on campus internship that helped out a lot with that.
I don’t necessarily regret taking loans while in college. I regret always taking more than I needed and putting them on deferral as long as I did. Avoiding that probably would have saved me several years in repayment.
I graduated college with very little debt thanks to family help and going to a cheap school. My grandmother lived in a town that had a public state school, so that’s where I went to college. My parents didn’t really give me a choice……. if I wanted their help with college, that was going to be the college I was going to go to. At the time it seemed kind of unfair that as my friends were “shopping” for colleges and being told to follow their dreams, I was being flatly told that my options would be dictated entirely by my parents’ finances. Looking back, I’m so grateful for that, though.
My only real expenses were food, tuition, and books, since I didn’t have to worry about rent or utilities. My parents paid for my tuition and books and gave me a very small allowance for food and I worked 30 to 35 hours all through to supplement the allowance they gave me.
My junior year I got married. My husband was not in college and was working full time. After getting married, of course, my parents no longer gave me an allowance. However, with my 30 to 35 hours to week and my husband working full time, we were able to cover our living expenses on our own and I was able to qualify for financial aid to cover a large part of my tuition (which at that time was only about a thousand bucks per semester). I also qualified for a student loan with government-subsidized interested my last year of college for $5,000. I, being a dumb kid at the time, took that money even though we could have made it without it. So I graduated with only $5,000 in debt and the payments on that were only $60 per month with very low interest.
I had so many friends who went to expensive colleges and lived in the dorms, racking up thousands upon thousands of dollars in debt by the time they graduated and most of them are no better-off career wise than I am at this point, plus they’re still paying for their education. I’m really glad that my parents were practical realists……… rather than telling me to “follow my dreams no matter what the cost” like the parents of some of my friends. College is still important, but I don’t think it means what it once did. It’s not worth being thousands of dollars in debt during your 30s.
I graduated in 2008 with about $60k in student loan debt. Payments are about $600 per month. The first few years were tough but I lucked into a good job last year and I’ll be able to pay for most of my small wedding up front. Finding a down payment for a house is going to be a challenge. I get a good 401k match from my employer so my retirement is on track, but money will still be pretty tight for a while. I’m 28 and hope to have the loans paid off by 35.
The way I see it, I’ll end up with more money in retirement (and may even be able to retire early) with the degree. I’m just in a hole in the short run.
I don’t regret a thing. I graduated with about the same amount of debt as you, but I was able to pay it off in less than 2 years after graduating. I don’t think I could’ve got by on less unless I lived at home and that wouldn’t have been worth it. I think if you can pay it off within 2-3 after graduating that student loans aren’t terrible. They have taught me some valuable life lessons.
Almost without exception student loans pay off long-term with higher salaries. If I could go back and “do it all again” the only thing I would do differently is start one or two blogs right away when I started college which (hopefully 6 years later) would provide me with a very sizable side income if not a full-time income.
Yes, it was definitely worth it. I graduated with $36,000 in debt and my major was very conservative and I was sure I’d be able to manage the debt. I have a great job and I wouldn’t have it without my degree in accounting. Considering I had negative family support I think I did okay.
Was my education worth it? Absolutely, but it’s easy to say since I got a scholarship (http://nzmuse.com/2009/11/what-my-degree-cost-me/) – my degree cost me hardly anything at all.
I paid for the majority of college with scholarships and part-time jobs, so I ended up only owing $8000 at 5% to my parents who eventually forgave the remainder of the loan (only made a couple of payments after I graduated in 2005 before they forgave it). I also wish I hadn’t had to work so much (3 part-time jobs for 60 hours a week there at the end), but no huge debt was why we could buy our first home with 20% down when I was 23. That means it was probably why we could pay it off earlier this year. Overall, no regrets.
My only regret is procrastinating on my job-search for after university. Most of my friends had secured themselves jobs prior to graduation while I hadn’t even started looking. It meant I missed the peak timing for companies hiring and it took 8 months to land that first job. I’d budgeted for university but not for unemployment afterwards so I had to take a job as a labourer and ask for personal loans from family members. It was a pretty demoralizing time. Still even at my poorest, I only owed ~$2600 so my debts were repaid during my second month of work.
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At 41, I am still paying my student loan debt. If high school juniors and seniors were educated more on how to pay for college, secure grants and scholarships, or to attend college for free, perhaps fewer people would go into such deep debt for their education. I agree that paying a lump sum at the beginning of a semester is taxing on one’s personal finances. Not many people have thousands of dollars saved to be able to afford such a cost.