I’m sharing this with you guys only because I want other kids to learn from MY mistakes.
I graduated college in 3.5 years (sooner than most). Yet I still racked up this debt when leaving college:
Wells Fargo (Private): $21k at 6.5% interest
Iowa Student Loan (Private): $9.5k at 8.4%
My Fed Loan (Federal): $26k at 5.5%
Total amount: $56,500 at an average interest rate of 6.5%
Question: Jared, how didn’t you qualify for more federal student loans? My dad always worked 60hr weeks growing up and my mom 40hr weeks. Their combined income was NOT over $100k (I grew up in a town of 900 people). Yet, many other families who made considerably more got more federal loans. Why? Because they were entrepreneurs and were able to pull more “strings” with their taxes. HUGE FLAW with FAFSA in my opinion.
College students – Please be smart when deciding on what school to go to/what loans you agree to. Don’t be an idiot like me. Sometimes I feel like the biggest scam of all are some of these “private” loans that colleges offer when you don’t qualify for federal student aid.
Ex: My SMALLEST loan I have is still at $8580 after paying for over 3 years. Why? It’s at 8.4% interest and every single day $1.95 is added on in interest ($58.50/month). So of the monthly payment of $81 only $22.50 is added to that principle balance.
I’m finally looking into options to have another company buy out the loan (and other loans that are at 7.4%), but don’t wait as long as me. I’ve paid on my loans for 3 years and literally haven’t even put the smallest of dents in the total amount. I have paid between $500-$600/MONTH total for these loans – and my total amount STILL sits over $50k!
Be smart – Go to a community college first if it means saving some $. And have a plan when going to college.
You must really decide if college is right for you. I learned a LOT at college. I really did. I got my B.A. in Exercise Science, which, was a requirement for my current job. However, what is that current job? It’s a $25k/year job (20-30hrs/week is considered full time as I am an instruct at the National Personal Training Institute).
I always think – was it worth racking up $56.5k in loans for a job that I only make $25k from? Of course, I have other sources of income, but I would have needed MORE schooling in order to get a Masters degree to be a strength coach. So I go the normal route – get a degree – and will end up paying student loans until I’m 40 years old. So what am I working for? I’m working to pay off the loans that allowed me to get the job in the first place…For 15 years.
It just seems odd, doesn’t it? That at 23, you’re usually due for a new vehicle, you move into your own house, have to get your own insurance (at 25), utilities, maybe get married, oh, and pay off $56.5k in student loans.
So I was able to get the job because I have a degree (I do love my job). Yet, because I have a degree I will be in student loan debt until I’m 40.
Let’s look at a different case study. One of my best friends dropped out of college as a freshman and started working in a factory. Wow! What a loser, right? I was the one doing the RIGHT thing – and he was the one dropping out to work in some factory. By 21 he got a promotion, and by 24 he was practically running the factory making over $100k a year with ZERO debt. OH wait, not only did he not have STUDENT LOAN and VEHICLE debt – but he has quite a good savings account already.
My point:
You are not guaranteed anything by going to college, nor are you guaranteed anything by dropping out of college. I make a good living now, but, always wonder if college is the ONLY way to get you to where you are.
ME: 26, with over $80k in student debt and truck debt. Make about $60k/year (Seminars, Online Programming, and instructor at the National Personal Training Institute). $1200/month goes to student loans and truck payments
My friend: 26, with over $40k in his savings account, married with 2 kids, and just bought a house!
Do your research before going to college. Make sure you aren’t signing your next 20 years over to being in debt. Have a job in mind that you want to do, and, work backwards on how to get there (What are the requirements?).
This was moreso a rant than an article…But the longer time goes on the more I start to realize that college is NOT for everyone. In fact, it’s not even close. Learn from my mistakes – plan your financial future much better than me!
PS – This is not me complaining that I’m in debt. This is me saying “I wish that I had thought this through more when I was 18 years old.”
