So last week I wrote about the different ways I financed for college and told you all some things I wish I had known about finances before I even went to college. Hindsight, as most of us know very well, is 20/20 and while I do wish I could change how I handled my finances in the past, I can’t. However, the future is very much a different story.
With my six years of undergraduate college completed, the reality of loans definitely sunk in more than it ever had before, especially when I finally realized the extent of the loans I needed to pay back. Right now, I currently owe just over $72,500 for my undergraduate education. Now, that’s not as much as some people while it is quite a bit more than others, but plain and simple, it’s what I owe back. I also need to throw out that that is only student loan debt and I’m very thankful I don’t have any credit card debt (and plan on never having it).
When I first saw my debt number, I tried to feel relief that it wasn’t higher (it only worked a little bit) and tried to reassure myself that I would be just fine as I knew a few people who had to pay quite a bit each month towards their loans and still managed to survive on the rest of their funds, but when you’re jobless, that reassurance only gets you so far. I had been reading blogs about fighting debt for a while by then and found the best reassurance through that avenue, honestly – I also found such inspiration.
If you read this previous post from me, you know that I recently returned to school for my MBA. Since I am working for the school, the costs of my MBA are covered (except for books) in addition to my housing and meal plan being included and I also receive a stipend each month. Basically I eat and live for free, receive free schooling, and get paid on top of it. I couldn’t really find a better deal anywhere else and I felt that I needed to take advantage of this opportunity because I’m at a pretty good stage in my life to complete it in.
The MBA and the current position I’m in at my University (I’m an Area Coordinator in Residential Life, which is a part of Student Life) means that when I begin to look for jobs in the Fall, I will have the experience and background necessary for the jobs I want (admissions rep or a position within Student or Residential Life at a College or University). I also picked up a part-time job to generate more income (now to not let making money get the best of me).
Currently, my loans are deferred because I am back in school; that doesn’t mean that I’m neglecting them though (interest is so pesky!). While I will be going over my monthly budget breakdown next week, the number one thing my money goes towards is my loans. And I wouldn’t have it any other way.
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It’s smart that you’re working on those loans even while they’re still in the deferred state.The more you can take care of now, the less you’ll have to pay down once the bills for them actually start showing up in the mail. Having a huge student loan burden is no way to start your career once you get out of school!
DebtChronicles I second this, as I’ve had to deal with a large student debt load out of school. With that being said, it motivated me to side hustle and I’m probably better off long-term because of it.
DC @ Young Adult Money DebtChronicles I’m trying my best! Only wish I was making more to be able to put more money towards them, of course :)
I definitely feel motivated and I figure if I can handle paying them back now, I’ll probably be okay once I’m in my career.
I worked as a resident assistant during school as well. It wasn’t always the most fun or easiest job but it did save me a ton of money on room and board. I would say well worth it!
BudgetforMore I’m not sure I would be a very good RA, but at the same time you do get compensated well with not having to worry about expensive rents in and around a college campus.
DC @ Young Adult Money BudgetforMore As an undergrad RA, it was a very rewarding, but at times, exhausting job to be in (especially since I was in an all-girl hall). It networked me into my current position however, and I wouldn’t change it for anything :)
Sounds like a great deal with your MBA. You’ve got a great start to tackling all this debt and I think you’ll come out of it in a terrific position.
Matt @ Mom and Dad Money Thank you, I’m definitely hoping so!
Congrats on recognizing the need to pay off those loans ASAP! Hopefully you will make more money once you graduate and be able to pay them off even faster.
Holly at ClubThrifty They’re just so big and looming! I want them gone and to have a nice savings cushion, so my budget is configured around that. And I’m definitely hopeful about my monetary situation after graduation!
Congrats on getting your MBA without adding to your loan obligations! I know that the mound of debt you have accumulated stresses you out; however, as long as you are not paying an obscene interest rate (8%+), I wouldn’t stress too much about paying them off fast. I would rather see you build a robust savings account and plan for life than pay down student loans. Once you pay them down, should you need money, it will likely cost you more in other debt. I have seen clients get into credit card debt because they didn’t have enough saved after paying off student loans and now they are paying 15% vs. the 6% in student loans they could have been paying.
blonde_finance Thank you! A Masters was something I definitely wanted, however I wanted to do it without adding to my loans, so I’m very thankful that I’m getting to accomplish it! Great point about interest rates – currently, my budget is built around paying off the interest accruing every month on my loans and building a savings, exactly for the reason you stated – I definitely do not want to be trapped after I graduate and end up in credit card debt!
Good for you for paying on your loans while they are in deferment! I too deferred for a while- but I was not as wise as you are and did not pay anything on them while they were in deferment. Oh if I could do it all over again. Anyway, kudos to you!
colormefrugal I’m trying! Thank you!
That’s a smart move. I wish I had started paying back my student loans as soon as I got a job, but instead I was saving for my emergency fund. I participated in a few student life programs during college and it was a lot of fun.
JourneytoSaving I’m still trying to find that balance of should it go into savings or should it pay off my loans – it’s just going to be something I feel that I’m going to constantly be adjusting with my budget. Love hearing that you participated and enjoyed some of the student life programs at your college!
That’s a good deal you have for getting your MBA and a good strategy for paying off your current loans.
Raquel@Practical Cents I got so lucky with the MBA! And I’m hopeful my plan will work out! Thank you!
I worked at a university to get my undergrad and teaching credential: it’s a fantastic way to avoid student loans. Good on you! That level of student loan debt will take some time to work through, but if you attack it and can stay the course, I’m sure you can be debt free in a matter of years, instead of decades.
DonebyForty Thank you! It is a great way to avoid student loans (or adding to them!). That sounds good to me – years, not decades! :)
I work at a university, but they only pay about 40% of tuition. It’s pretty frustrating considering I want to get my master’s so badly but cannot afford to work full time and study.
fitisthenewpoor That does sound incredibly frustrating! And interesting that your university only pays for 40% of tuition, that’s a major bummer.
I hate student loans! Ugh. But glad you are in a better situation with your MBA. Looking forward to the budget breakdown post!
deardebt They’re awful! But also an unfortunate reality for a lot of people these days. Thanks, I’m excited to share it with you all!
Sally,
Nice work in prioritizing your student loan
payback so high on your list. It seems like an a huge amount now, but
you’ll eventually get though it and it will be gone, especially if you
keep it at such a high priority.
Blogs can definitely be a source of motivation and inspiration to keep pushing forward. I’ve found as such along with podcasts.
Take care!
Kraig @ Create My Independence Thank you! Eventually it will be gone, I’m just pushing for it to be gone sooner rather than later :)
I would like to get into podcasts more, just need to find the time!
I’m debating an MBA myself and as a former RA, I want to look into student life for jobs in order to help pay for it! Good for you not incurring anymore debt in grad school and not letting your undergrad debt prevent you from pursuing a degree you feel is needed.
BrokeMillennial I definitely feel I’m getting the best of both worlds – a free MBA as well as experience for my resume and future job positions. It seems many Universities and Colleges are rolling out offers like this, good luck in your search!
That’s wonderful you found a way to essentially get paid to earn your MBA. Student debt is certainly no fun and it’s great that you are very focused on paying it down quickly. However, I do encourage you to find a way to balance your student loan payments while still setting aside money for other goals, such as retirement and/or buying a home, etc. Even investing a small amount of money for your other goals now can make a huge difference later.
ShannonRyan Student debt is definitely not fun at all! While I am concerned about my debt compilation, I’m also concerned about saving money too. My budget is centered around those two things, which you’ll see next week in my budget breakdown!
That is really smart to be paying back or at least keeping up with interest while your loans are deferred. I made the mistake of ignoring mine for a year while they were in deferment and I wish I’d paid at least the interest during that period.
Eyesonthedollar I’m trying! Since my loans are so high and some are quite a few years old, that interest really adds up quick. Any extra money I can use to bring the interest that has built up on my loans down, I use!
I am in a very similar situation. My student loan debt is in the mid 60’s. I thought about going to school but realized it was pointless. Now I plan on getting back in the workforce and paying off this debt.
TheButlerJournal.com The amounts are so staggering, if my position hadn’t worked out how it did, I would definitely not be back in school adding more debt. Good luck!
Great grad school set up! I just finished my MBA and I feel like it was well worth it. Sounds like you have a solid plan…best of luck!
SimplySave Thank you! And congratulations on receiving your MBA!
I have to say, I’m incredibly jealous! I couldn’t imagine having my education paid for like that!
Suburban Finance It was simply too good to pass up! Especially because I won’t be adding to my student loan debt since it’s being paid for!
That’s great that you found a way to get your MBA for free, Sally. Can’t wait to see your budget breakdown!
Laurie TheFrugalFarmer I definitely feel so lucky! And I can’t wait to share it with you guys :)
My friend was a Philly Teaching Fellows and got free tuition for a Master’s while she was working for the city as a teacher. While in school, she focused hard on paying down the loans that were unsubsidized and not as focused on the subsidized loans. By doing so, she ended up bringing her $50,000K loan down to $30,000 in two years. Every little bit helps!
Tara Zee Wow, that’s incredible! Definitely gives me great motivation!
Way to go! Our debt number was right about where yours is, and seriously, through nothing more than hard work, determination and persistence, we were able to wipe it out in about 28 months. And free school is definitely the best- you’re very smart to take advantage of it!
ImpersonalFinance Oh my goodness, 28 months?! That’s incredible! Way to go!
Yeah, our current number is not too far from yours. It’s rough, but we’ll all get there! There being debt freedom :)
Good luck and congrats on the free MBA!
Erin My Alternate Life Thank you!