Month: April 2019

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A Working Mom's Guide Paying Off Student Debt

My Student Loan Debt: Part II

This is a continuation of my student loan debt story. You can read Part I here: My Student Loan Debt: Part I.

Graduation

When I entered the workforce after receiving my Bachelor’ degree, my student loans were on a hiatus as I waited for them to be dispersed. Meaning, the final dollar value owed is calculated. Additionally, there is a small waiting period upon graduation. Here, the loan companies graciously allow you to find employment to pay for the loans as they finalize your payment options.

I was only able to get a part time position for the first few months. So once the payments were due, I had to put them in forbearance. This is where you basically tell the loan company that you do not have enough money to pay.  The interest, however, still accrues.  But with a part-time job, I just didn’t have the money to pay.

When my position was finally changed to a full time position, I thought that I could finally start paying down this debt. I soon realized that my base pay was not much more than I made as a waitress. Then, after taxes and such, it was even less. There was definite disparity between my wage and the cost of my education.

The Plan to Increase My Take-Home

By the next year, I decided that my Bachelors degree was not filling my career cup and was not going to yield me a livable salary. In addition, I had a limited scope of practice within my career choice because I did not have a nursing degree. At a hospital, not being a nurse can definitely be limiting when you want to work closely taking care of patients.

So, from forbearance, I put my loans into deferment and went back for my Associates in nursing.  Deferment puts your payments on hold and your interest- in most circumstances.  This happens automatically when you re-enroll in school.

In 2004, I was finally done with my undergraduate degrees. Now, I had a Bachelors and an Associates degree and had never made a payment on either.  After the same period of time as after my Bachelors degree, my loans were finalized and my payment options needed to be chosen.

I could now start paying them off!

The Plan

I had a few options from which to choose to pay off my loans.  One was income based where I would pay a certain percentage based on my income.  This would pay down my debt faster.  Another option was a fixed payment schedule whereby the monthly payment would gradually increase as time went on.  This was a middle of the road option.  The last option I had was based on a low payment.  I could have low payments but extend the length of the loan.

I chose to make the smallest monthly payment so that I could pay off the loan but still have money to live.  I understood that this would increase the life of the loan and increase the payoff amount.  However, I went into it with the thought that if I had extra money, it would always go towards the loan.

Putting the Plan into Action

Overall, it took me 15 years to pay off my student loans.  According to the website, www.savingforcollege.com, my loan should have taken me about 25 years to repay. So, being 10 years early was a win for me.  By no means, was this an easy win.  There were sacrifices.

When my friends of the same age were graduating college at 22 and going out into the real world, I became a mother.  As those same friends were becoming moms, I was going back to finish my Bachelors and obtain my Associates.  When my friends paid off their student loans, I started my payment plan.  When my friends bought lake houses and went on trips, I paid cash for my Masters and still paid on my undergraduate student loans.

Yes, in my quest for a great career, I also decided to get my MBA.  As stated above, I paid cash for this degree.  While taking my online courses, my student loans were automatically put into deferment.  This allowed me to keep paying on them while interest did not accrue.

Over the years, I was certainly off schedule from everyone else and was never quite in the same season of life as my friends.  This is where I needed to see the forest through the trees.  I needed to continuously remind myself of my long term goals.  I wanted to have a great education, a great career, and no more student loans.

Stay tuned for Part III of My Student Loan Debt journey where I will share the real dollars…

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student loan debt

My Student Loan Debt: Part I

During Easter dinner, I had a great conversation with my nephew. He’s seventeen and discussions of college are fully underway. Part of these discussions revolve around student loans. Having just paid off my student loan debt, I had a lot of insights I wanted to share with him. Frankly, I didn’t want him to make the same mistakes I did and I wanted to give him the bigger picture of how student loan debt can play out once you are in the real world. I figured I would share these with you as well in hopes that it will help someone else.

Growing Up

In order to provide a little perspective, I will have to go way back. I came from a blue collar family where I was the youngest of four children. No one in my immediate family had ever gone to college or even taken college level courses. At the time, I was also not aware of many cousins, aunts or uncles going to college either. Perhaps only a handful? All of my older siblings went right out into the world to make their way. I, however, always new I wanted to go to college because everything I wanted to be when I grew up required a college degree.

Money was an interesting subject when I was growing up. Actually, it was a non-existent subject. Paychecks and bills were discussed behind the closed door of my parents’ bedroom. Bills were paid with cash or with cashier’s checks. When we went out to eat, the bill was discussed by my parents en français and the tip was as well. Savings, debt, credit scores and pensions were not discussed in front of the children- even the adult children. 401Ks were not even a thing back then.

The one thing I knew about money was that if I wanted to go to college, it was on me. Back then, there were no 529 accounts and certainly no secret stash of cash that would magically appear upon my graduation. Additionally, my parents would not provide me with their tax returns or their social security numbers for the FAFSA. My parents were of a different generation and I understood that completely. Even though I hate the saying: “It was what it was”. It really was and I accepted it.

My Early College Experience

I started off my college career at the local University where I completed a year and a half completely on scholarship. During my first try at college, I found myself confused as to what path I should be on in terms of career. Before wasting any more money, I withdrew. I got married, had my son and otherwise tried to figure out what I really wanted to do.

When my son was three, I felt the urge to go back to school and finally complete my degree. Assisting at a daycare and waitressing at a local Italian restaurant was hard work and yet I barely made the bills every month. I needed to go back to school and I felt driven like never before.

I applied and was accepted to a private University that came with a premium price. This was not the local University I had originally attended. That University was public and much more reasonably priced. Despite the premium price, this University was willing to give me lots of financial aid so that I could attend. They built this beautiful new Graduate building and my plan was to attend graduate school right after my bachelors. Since I already had a year and a half of credits, I graduated with my bachelors degree in only three years.

A month before graduation, the University closed the Graduate program they had just launched. My class was supposed to be the first Graduate class. I was devastated. We were given the option to attend a Graduate program as reciprocity in northern NH or in Boston. The University knew they had done us wrong and so they made arrangements for all of us to be accepted into either of the other Graduate programs. Since I had a family to care for, I accepted my Bachelors and entered the work force I put my student loan on forbearance.

To Be Continued…

***Since this is a pretty long post and I want to add a lot of detail, please check back for part two next week!

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