Single Mom Money: Student Loan Debt Sucks

Thursday, February 11, 2016


I've mentioned before that I'm on a zero balance budget plan to pay off all of my debt, get my finances in order, build savings (ie. college costs for girls + retirement) and have an ultimate goal of purchasing a home before the girls enter kindergarten. I've been making some strides in this area and have already paid off one of my student loans and will be paying off another plus a personal loan with my income tax refund. That doesn't mean I'm out of the woods in the debt department, though.

While jotting down my remaining balances, it totally hit me how insane student loan debt really is. There are atrocious rates and OHMYGOD (15 years to pay off?!) ... it's crazy that this is the way most of us pay for a college degree. When I was a senior in high school, my dad and I looked at schools but he had only gone for a semester and dropped out - so this was all pretty new to us. We just knew that I'd find a school, we'd pray I'd get accepted and then he'd help me move in on the first day. We didn't put thought into how much a school cost, or how I would pay for anything really (books, food, etc.). I knew I wanted to go to a school where I'd have a better chance to play collegiate sports, so I chose a small private NCAA Division III school that had a good softball and volleyball program.

My school was 3 hours from home - perfect for a 1 day trip for my dad to visit but far enough away where I'd have to get warning of an arrival (not like my dad would just show up anyways). I joined the softball and volleyball teams my freshman year, ultimately selecting softball only my sophomore year and then quitting the team (and all sports) the end of my junior year. My university's tuition rose about 6% every year I was there and I'm pretty sure it was around $26,000 a year by my senior year. We applied for FAFSA but didn't always get great tuition breaks, but I did qualify for student loans. My senior year I was working for my current company full time during the evenings after class, juggling being an editor for the school paper, trying to be active (and failing totally) in my sorority, plus ... studying? time for friends? Yeah, it was brutal.



My senior year was the year that we had to take out the biggest loan in all my 4 years at school. My dad worked more at his city job so we didn't qualify for as much assistance that year. By the time I graduated I had tens of thousands of student loan debt and a clock ticking until repayments began 6 months after graduation. I struggled for years after graduating college just to make the minimum payments which totaled around $400 a month. There are many times where I cried and barely made the payments, or missed them altogether.

Fast forward to today, where I have 10+ years of school behind me, which means I've been paying on these loans for 10+ years already. Most of them are pretty much paid down to a manageable amount than they were when I graduated. But looking at what the original loans were for and how much interest and principal I owed after all was said and done almost made me spit out my coffee. For example: two of my loans are private (there are a few others but I'll just use 2 for this post's purposes). One loan was taken out in 2002 (14 years ago if you like math) for the amount of $3,500. I'm pretty sure it was to help cover costs of classes for a semester. The rate it was taken out at was 5.25% which means the total repayment is $8,862.08. FIVE GRAND MORE THAN THE ORIGINAL LOAN!!!!!

Another loan was taken out in 2004 at 7.25% interest for an amount of $1,400. I think it was covering costs of books plus my sorority dues. Total interest and principal on that one? $3,405.55

It makes me sick how much money I'm actually repaying compared to how much my original need was. Someone clearly is making a huge profit off of a college education. The good news is that I'm more educated in this area, so when my two little people are ready to start considering college, we can make a game plan of what things will cost and I'll have more know-how of what to look for and what NOT TO DO! I don't want my girls to struggle as much as I did (a little struggle is okay tho!) and I want them to be smart about their money and where their money is going. Fingers crossed that when we get to that bridge, our decision process is a lot more informed and realistic!

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