higher education money Wealth and Financial Literacy
"Student Loans are Good Debt" and Other Myths1/24/2013
Originally Posted at Liquor, Loans, and Love Today’s installment of If Only I Knew Then Wh...
Originally Posted at Liquor, Loans, and Love
Today’s installment of If Only I Knew Then What I Know Now is brought to you by the letters J and D for Jack Daniels, a chapter in G’s book over at When Keeping it Real Goes Right and this article on a guy who paid off $26K in student loans in two short years.
Reading over it, I was struck by how many friends I have that could have written the same article. In the years since I graduated, we have gathered regularly over mimosas or margaritas and while catching up on each other’s careers, significant and not-so-significant others, mutual friends and just life in general, invariably the conversation turns to that which is the monkey on our collective backs; student loans. Here is what is utterly ridiculous about the entire racket; I don’t know a single student who doesn’t have student loans. I am not saying there are none. I am saying, that of all the students of all the universities, I have encountered in my post graduate years, I DON’T KNOW A SINGLE ONE WHO DOESN’T HAVE STUDENT LOANS.
Reading about Brian McBride, I was strangely proud of this guy I’ve never met. As someone who also has a substantial amount of debt and works in that field that is quite profitable but notoriously underpaying, I get what an incredible accomplishment it is to be able to pull off something like this. But there was a part of me that was also incredibly sad about what it took for him to accomplish this. Living in a freezing Michigan apartment or a sweltering Atlanta one? Skipping meals? Or eating meals consisting of questionable meat and moldy vegetables when not skipping meals?
Are we really making the education we have made so mandatory in America so unaffordable that it’s acceptable to ask students to risk food poisoning just to pay their debt?
Truthfully, I read the article with a bit of envy. I would kill to have student loan payments with a 2 in front of the amount. But I made the single biggest financial mistake of my adult life when I was just a child; I got private student loans.
As a freshman, right before finals, I was summoned to the Administration building and told by a curt, unsmiling woman sitting behind a desk in a bank of desks with connecting walls that I had two days to come up with the $10,000 that would not be covered by the financial aid that had just been unexpectedly canceled. As an eighteen year old far from home in a city where I didn’t know a soul, I panicked.
“What happens if I can’t come up with it?” I asked, wondering where the hell a first year college student of a single mother was going to come up with $10K.
“Then you need to be out of your dorm by Friday.”
“But I don’t have anywhere to go.”
“You still have to get out. Next!”
And that was that.
Faced with the possibility of not only being kicked out of school in less than forty-eight hours, failing an entire semesters worth of classes because I wouldn’t be able to take finals, and being homeless in a city far from home, I stumbled through the maze of employees perched in windows who were varying degrees of helpful until finally I settled back in front of my computer screen in my dorm that night, exhausted as hell, with a packet of info some woman had pushed in my face as she closes the office promptly at 4pm because she had to go get her hair done. I shuffled through the paperwork, all of it looking like Greek written both upside down and backwards, not entirely sure what I was reading but hastened by a sense of heightening panic. I’d already known a couple of students to get kicked out of school. Was I going to be next? Even if I could come up with the money, could I get it to the school before my classes were purged and I was evicted from my dorm?
And so, when I came across a company touting a long history of lending to students, low interest rates and immediate approval and disbursement, I thought it was a miracle.
Except only, notsomuch.
Every year after that, when the federal loans and scholarships I’d applied for didn’t cover my balance and I was invariably turned down for grants because, despite being the dependent of a decidedly working class mother, we weren’t quite destitute enough to receive money to pay for the college education I was always told was my only ticket to success, the same lending company covered the difference. They were friendly. They answered my questions, even when I was too young to know that I wasn’t asking the right ones.
“Most of our students have no problems paying off their debt,” one particularly nice older lady told me over the phone one day. “If they are responsible and work hard, most of them are out of the kind of debt you’re in in a couple of years. Besides, student loan debt is good debt.”
I was so young and stupid.
Fast forward to after graduation, and I was working at the same retail store I’d been working at before I got my degree because I couldn’t find a job, and my student loan payments were a mortgage payment with variable interest rates that had ballooned my principal and promised to keep me smothered underneath it for the rest of my living years. Suddenly, the employees weren’t so nice. They threatened to have me thrown in jail. To garnish my wages from here until Jesus called me home. Once I even got a particularly aggressive person who had some interesting ideas.
“Don’t you have anything you can sell? Family jewelry? Any assets?”
“No, I don’t.”
“Nothing at all you can sell to make one of these payments?”
“You mean like my body?”
I am probably reaching here, but I took his silence to mean he didn’t care how I made the money, just that I sent in a payment, even if the payments were, quite literally, half my salary.
In the years since, I have both artfully dodged and faithfully paid my student loans. I have profusely thanked kind representatives that have treated me politely and respectfully. I have argued with people who refused to help me despite us both knowing they could. (I once spoke with a “supervisor” who refused to change my monthly payment to something more manageable despite himself acknowledging my payments were more than I could reasonably bear. It wasn’t until after he threatened to sue me and I had my lawyer call on my behalf that magically a “new program” had “just come down the pipe” that slashed my payments and interest rates in half. Not even an hour later.) I have gotten smarter. I have made more sacrifices in my spending, in my social life, and in my sanity than I choose to dwell on. I have started, slowly but surely, to dig my way out.
But I can’t stop thinking to myself; I ruined my financial life before I had a full time job. Before I could even legally drink. Before I even had a financial life to ruin.
And that is both acceptable and expected. Somehow, it doesn’t seem right.
I will pay my debts, even if it means I will work two jobs forever. At some point I will be able to write about all the years I went without seeing my family or having clothes that fit or necessary car repairs just so I could pay off my student loans. But I wonder at what cost? Never owning a home? Never saving appropriately? Never marrying or seeing the world or finding a job I love, or living without the stress of such a debt hanging over my head?
During one conversation with a particularly nice dad (he had just thrown his daughter a party for her 3rd birthday), we were going over my finances, line by excruciating line.
“Do you have any other sources of income? Gambling wins, dual income, alimony, child support?”
“HA! I can’t afford to comingle my debt with someone to marry, let alone to divorce them for alimony. And I certainly can’t afford to have children.”
“No. No, I guess you can’t.”
And yet, he surely still had to take my payment.