The True Costs of College: My Student Loan Debt Story

 

thetruecostsofcollege

Welcome to my first post of my new series, The True Costs of College, where I will share my story of student loan debt, ways to tackle debt, and ways to minimize or avoid debt to pay for one of the most important investments you’ll ever make – your college education.

For a large majority of American college graduates, student loans are the storm clouds above our heads. For many of us, those storm clouds will be circling around our heads for many years, possibly decades. Personally, I think student loan debt in the United States has always been a taboo topic until recently. Everyone knew that recent college graduates were thousands of dollars in debt, but no one really wanted to admit there was something wrong with that.

Personally, I believe that:

  1. A college education is becoming way more expensive than it should be making it unattainable for most people without taking on an insurmountable debt,
  2. Incoming college freshmen are extremely uneducated about student loans, and
  3. We need to start talking about it.

I graduated from a state university in December 2008. According to a study conducted by The Project of Student Debt, in 2008 67% of students graduating from a four-year college/university had student loan debt. The average debt level for graduating seniors with student loans was $23,200 in 2008. In 2004 the average was $18,650, an increase of 20% from 2004 to 2008.

The average 2012 student loan debt for someone who graduated from a Maine college/university is $29,352. Maine is ranked 7th in the country for highest student loan debt according to the most recent data at The Project of Student Debt. I attended a small state university where the average student loan debt in 2012 was $26,319. About 87% of students graduated with some debt.

According to the Institute of Higher Education Policy, about 14% of the 37 million borrowers with outstanding loan balances have at least one past due loan account. Two out of every 5 borrowers are delinquent at some point in the first five years of repayment. Now, these figures don’t even include the average student credit card debt of about $3000.

Of course, if you go on to graduate school you are most likely going to fund your entire education through loans adding on tens of thousands of dollars if not more. Education in America is becoming ever more expensive by the year. I think that the cost is becoming ridiculous, but I do believe that we should pay for some of our higher education. Yes, I hate my student loans and I believe that the cost of my education was probably higher than it should cost, but I believe that I should pay for it. A college education is a choice not a right. I made the choice to attend college and graduate school because I believe in the power of education and furthering my knowledge.

I think one of the problems we have in America with the ever-increasing student loan debt is that we are not freely talking about it and not educating our high school students who will enroll in college soon. There are so many things I know now that I wish I knew as an 18-year-old college freshmen.

I have decided to be candid and open about my student loan debt and share my learnings in hopes of educating our future college students.

Source - Huff Post (AP Photo/Jacquelyn Martin)
Source – Huff Post (AP Photo/Jacquelyn Martin)

Source: Huff Post <— Article includes a great infographic about student loan debt

My Student Loan Debt Story

I began college in the Fall of 2005. I first went to a small private liberal arts college in NH for my first semester. I was lucky that I had a lot of grants and scholarships that paid for about 90% of my costs. I didn’t like the college and transferred to a small liberal arts state university where I finished out my degree. Again, my first two years at the school were low in student loans because I had grants and scholarships. I quickly discovered that as you move up in years in college you begin to lose those grants and scholarships and gain more loans. I finished college a semester early, although I could have finished an entire year early has I known (that’s another story for another time). I graduated undergrad just as the economy tanked in 2008 and struggled finding a job for several months.

I worked as a temp at a large biotech company until I found my first “real” job in January 2010. I worked at that company for almost 4 years. In 2010 I decided I wanted to go back to graduate school to earn my Masters in Public Health degree. I attended another Maine university (a private school) as an online student and I was able to work full-time as well. I finished my MPH in December 2012 after 2.5 years of full-time school and work.

I personally funded about 95% of my entire education. My parents paid very little of my education. My mom paid the 1.5 years I lived in an apartment during my undergrad years, and that’s about it. During my junior year of college I took out a $5000 private loan to paid for living expenses and also the costs of applying to medical school (although I chose not to apply later that summer). Here is the breakdown of my entire student loan debt as of March 3, 2014:

Undergrad Loans

Year Original Amount Current Amount – 3/3/14 Interest Type
Year 1 – 1st Semester  $          1,312.00  $                        745.88 Variable/Subsidized
Year 1 – 2nd Semester  $          1,312.00  $                        745.37 Variable/Subsidized
Year 2 – Full Year  $          3,500.00  $                     2,854.02 Fixed/Subsidized
Year 3 – Full Year  $          5,500.00  $                     4,825.22 Fixed/Subsidized
Year 4 – 1st Semester  $          2,750.00  $                     2,480.00 Fixed/Subsidized
Year 1 – Gate Loan  $          1,300.00  $                               –   Variable
Year 3 – Private Loan  $          5,000.00  $                               –   Variable
Year 1 – Perkins  $          2,000.00  $                               –   Fixed
Total  $        22,674.00  $                    11,650.49

Grad Loans

Semester Original Amount Current Amount – 3/3/14 Interest Type
Summer 2010  $          1,714.00  $                     1,716.06 Fixed/Subsidized
Fall 2010  $          3,351.00  $                     3,354.83 Fixed/Subsidized
Spring 2011  $          3,435.00  $                     3,438.93 Fixed/Subsidized
Summer 2011  $             368.00  $                               –   Fixed/Subsidized
Fall 2011  $          4,004.00  $                     4,008.63 Fixed/Subsidized
Spring 2012  $          4,128.00  $                     4,132.98 Fixed/Subsidized
Fall 2012  $          4,429.00  $                     4,669.01 Fixed/Unsubsidized
Total  $        21,429.00  $                    21,320.44

Total Debt

$      44,103.00

Remaining Balance

$      32,970.93

Of course, the above figures do not take into account interest over the life of the loan, which will most likely add an additional $6000-$7000 to the total.

Next time I plan to discuss different repayment options for student loans and my plan of attack to pay off my debt.

Do you have student loan debt? How much? Do you think as Americans we should be responsible for paying for our college education?

5 thoughts on “The True Costs of College: My Student Loan Debt Story

  1. I wish I would have known so much more about money, loans included, in high school and college. I would have approached going on to grad school differently if I had known more about grown up finances!

    1. I hear ya girl! There are so many things I would love to go back in time and tell my 18-year-old self! It amazes how schools don’t teach personal finance! I think it should be a requirement for all high school seniors.

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