Managing Student Loans

If I knew at 18 what I know at 28, I could have prevented this from happening. Instead, I owe $150,000 to student loan companies with no escape. I hope that you will read this article before you fall into this trap. Don’t say I didn’t warn you.

At 18 college was a dream come true. I could study real-world topics without parents to monitor my class attendance, my coffee intake, or my late-night slurpy runs to 7-11 with friends. I had worked part-time as a teen, but had no savings or significant sense of financial responsibility. Nor did my parents, which led me to finance a private school liberal arts education in my native Southern California with student loans.

I qualified for some federal money. The rest of it would come from private loans. I paid for room and board, books, and gas for Dad’s car that let me make those slurpy runs. A few thousand lattes here and some new clothes each semester started to add up. So it was impeccable timing when the credit card solicitors outside the student book store hit me up. Finance charges and interest rates? These concepts were unknown to me and likewise inconsequential. I graduated four years later with $80,000 in student loans and $3,000 in credit card debt.

I received a Bachelors Degree in Sociology so the next logical move was law school. I had always lived in California so, likewise, the next location I had to be was New York City. Which reminds me, I failed to mention that my third year of undergrad was spent doing a “study abroad” in a lovely European city in Eastern Canada. My apartment had a view of the skyline and held many great parties. I borrowed an additional $5,000 so I could stay the second semester. What’s another $5,000 when you owe $80,000, right?

I moved to New York City a week before law school started. I shared a studio apartment in the Village with another girl, yet still managed to pay $1000 per month in rent. I later moved into my own room with a roommate, handing over $1250 a month for a true hole-in-the-wall. I took the train, never a taxi. I cooked stir-fry every night. I wore the same jeans when I graduated as when I started. I never flew home.

Yet somehow I managed to graduate law school owing an additional $70,000. Don’t worry, people said. You will be a lawyer so you will be able to pay it back in no time. Never mind the bar study expense and the cost of the exam, plus time not working.

It’s now four years later. My credit card debt is down from $14,000 to $10,000. The student loans are in interest-only and I’m paying $1000 to these creditors a month. I drive an old Toyota. I don’t shop, but for the occasional work suit. I share a one bedroom apartment with my boyfriend and while my furniture is decent, it is from the home consignment store. I cook every night and try not to drive on the weekends. Homeownership is nowhere in my future. What is most shocking, however, is that I make $85,000 a year.

If I knew at 18 what I know at 28, I would have done things differently. I would have worked while in college. I would have worked hard during the summers to put the money toward school. I would have created a budget during the year and stuck to it. I would have turned down the credit card offers. I would have lived the thrifty life I am forced to live now.

Maybe I would have waited to go to law school after working a few years. I probably would have appreciated the opportunity more and studied harder. I would have stayed closer to home, maybe even at home. I would have worked during school, maybe at a paid law firm internship instead of holding 15 different part-time jobs at a time. I would have tried to finance the experience with money I had saved working after undergrad. I would have declined all expenses that I didn’t have cash to pay for in my pocket.

Today I have to reevaluate. I spend smarter and thing about the consequences of each purchase. I try to make big payments on my credit cards to bring them down. I work exceptionally hard at my job believing that hard work will one day reap its financial rewards. And I curse the student loan companies who know far more about the way debt affects young adults than an 18 year old could ever know.