July 13, 2011

Way Back When[sday]: Debt

Yesterday, I read this article. I had two quick reactions - #1, how on earth is college allowed to cost that much? And #2, Thank God my student loan debt isn't that high. This isn't the first article I've read like this and it won't be the last; there's a lot of debate right now about loans, the cost of college, and what it's doing to my generation.

Currently, I owe just over $14,000 in student loans. I started right somewhere around $16,000 and I started paying a little less than 2 years ago. The interest rate is unreal and makes it harder to bring that number down. My payments are pretty low - $225/month and therefore I've been able to get a little ahead. When I wasn't making much money at all in the beginning I tried paying an extra few dollars because I knew it'd make a difference in the long run. Now because of my better job I manage to pay each one every three weeks instead of four, and therefore I'm a few months ahead in payments. For someone who went to a community college for 2 years and a private out-of-state college for 3 years and has only had a good job for less than a year, I'm doing pretty well.

But still, it's unbelievably frustrating. If the interest was lower, I'd have made a much bigger dent by now. If I had stayed in state I'd have no debt at all. If I had no debt, I'd have the funds to move out on my own. I'm sick of being 25 years old with a good job, a good sense of money management, and the complete inability to move the hell out of my parents house and the shoebox I call a bedroom.

Do I regret the college I chose, the degree I earned, or the experiences I had? Not in any way, shape, or form. I wouldn't trade it for anything - even being debt free. I wouldn't be the person I am today or in the place I am today - for better or worse - without those 5 years of my life going exactly as they had. While there's a lot of things that I wish were different, there's also a lot of things about my life I absolutely love.

Do I wish I was better educated about debt before I started it all? Absolutely. I was young and dumb and didn't get it as well as I probably could have. I would have payed at least the interest that was piling up while I was still in school if I had known. Maybe I would have fought a little harder for grants and scholarships (although I had a healthy amount of scholarships as it was). Or maybe I would have done the same exact thing I did. But at least I would have understood it.

Is the debt worth the degree? For me, yes. It helped me get a job that pays well enough to cover the debt, my current living expenses, and still let me (very slowly) build up some sort of savings. College turned me into an adult in many different ways. I would never take that back.

Every situation is different. I have friends who feel sick to their stomach every time they write the check for their loan payment. I have also literally watched the weight melt off of other people's shoulders when they write the final check and are suddenly very, very debt free. I know people who didn't pay for any of their own college tuition and they don't understand the value of a dollar, and I know people who had the same privilege and fully understand and are grateful for their situation. My debt doesn't cripple me, but it certainly doesn't help. I don't regret the experience, but I do regret not fully educating myself first. Don't get me wrong - I was told what I'd have to pay back and how, it just never really sank in. But you live, you learn.

Most of these articles I've read are written by Baby Boomers and they are full of speculation. Some think we won't move out and move up in society because of laziness, television, or being unprepared. It's not about being prepared- it's about being equipped. I had someone argue with me last week that there is nothing wrong with the economy and that there are plenty of well-paying jobs out there. Really? Tell that to my generation.

If you've experienced or are experiencing something similar, I'd love to hear you weigh in whether it's via comment, email, or a link to your own blog post. And if you're currently in college with loans awaiting you, I urge you to pay something - anything - to help yourself out. If you're like me, I feel your pain. And if you have kids/are thinking about having kids, for god's sake start them a college fund.


theolivetree said...

very interesting...I was lucky enough to have no debt....good thing b/c my degree did soooo not pay off...lol. I have a friend who pays over 700 a month for her and husbands student loans...couldn't imagine

Marizabeth said...

I started with $6,000 for my one year of college (not counting my 3 community college years), and am now at $1,500 give or take. I pay three months in advance to try and counter interest. I hate it. I didn't get a degree from that place and I regret ever going there. So, it's not happy for me. If I could go back to senior year, I would have fought to go to the school I WANTED to attend, instead of settling. But I have managed to get some pretty decent jobs (pay wise, most of the retail ones wound up in tears and quitting) and a wonderful fiance who allowed me to pour most of my paycheck into my debt while supporting us. When we begin to procreate, I am looking into the Gerber GrowUp Plan and other similar ones. The value of the dollar looks like it will only decrease for a while longer before we see an increase, which means schools will become more expensive while the country struggles to get out of debt. Very relevant post, girl!

Patchie said...

theolivetree - You ARE very lucky. There are people I know who are literally having to pay thousands of dollars a month just to make the minimum payment on their loans. Count your blessings!

Marizabeth - You've certainly knocked an awful lot of that debt in not a lot of time! Well done.