The check would always arrive in late summer. It was a pretty big check, at least to a perpetually poor and financially irresponsible college student living in one of the most expensive citiies in the nation. I knew I didn’t really need to use the entire amount, but I always found a way to justify it and my favorite way was by just saying, “I’ll pay it back when I’m older.”
Well, I’m older now and I’m still paying my student loans off, a good 13 years after I graduated.
This could have been avoided with a little forethought and a lot of tough love.
Getting someone—a respected family member, a professor, or any other adult who wants to make sure you don’t get in over your head debt-wise will do. Your roommate or best friend are probably not good candidates for this mentorship, at least not if you want it to succeed.
You and work with your loan mentor to figure out how much money you really need to borrow for your tuition, books, and other university fees, and then take a good look at the leftover money to determine if you should use it, set it aside, or pay it back immediately.
Notice that one of the options was not going to the mall because you need some new clothes. Your loan mentor should help you avoid situations like that and others including:
- A spring break trip to Mexico (not part of the official college curriculum)
- Trying to buy drinks for the entire bar
- Buying a brand new car that you couldn’t afford without your student loan money
Most college students don’t have a lot of extra money—it’s understandable. Having to attend 5 classes a week, study, do homework, and then on top of all that—work—can really drain you. So when someone hands you a check for $5000, it’s easy to feel like an instant millionaire.
It’s sort of like when you’re on a diet. You’re doing so well, avoiding sweets and really trying to make some good choices, but you wish you could have some cake. Then one day, someone brings you an entire chocolate cake, with gooey, rich frosting. You know you shouldn’t go nuts with it, but who’s watching? Like eating the whole cake, spending your student loan check on stuff you really don’t need will just end up haunting you later.
When you’re in college, it’s easy to just assume one day you’ll have a great job making loads of money and you’ll be able to pay off your student loans without any issues. It’s a great scenario, but it’s not really how life plays out. There are no guarantees you’ll have a great paying job, let alone any job, upon graduating. In fact, one study found that 85% of college seniors planned on moving back in with their parents after they graduated.
On average, students graduate with $24,000 worth of student loan debt. Some have less, some have much, much more. But even at the average amount, with monthly payments of $300 it would still take you over 7 years to pay your loan back.
That might not seem like a big burden, but remember, it’s only an average.
Be responsible. Get a loan mentor to help you avoid borrowing more money than you really need to. There are goals in life you might want to hit like traveling, buying a house, having a family, or starting your own business. Can you accomplish these goals with student loan debt? Sure, but it’s going to be a lot easier if your balance were zero.