Advice you can trust.
Student Loan Interest Rates – My Rant
Disclaimer: This post is ALL about my opinion. As always, based on personal experiences.
So much flurry about the increase in student loan interest rates. Dave Ramsey would say pay cash for college and you don’t have to worry about interest rates. I hope to be able to provide that for my kids. Fact of the matter is, if it not for student loans, I probably would not have been able to go to college. I mean, of course I could have, but it was not in my periphery to do things that would have allowed me to.
You see, I was a REALLY great student leading up to the college years. I graduated with a 4.14 GPA, did multiple sports each year, was the President of the National Honor Society, and heck… Class President for 3 years to boot. I did not get scholarships to get into college. I applied for hundreds, probably not thousands, but hundreds of them. I think I had average ACT scores. In hindsight, I probably should have done more Test Prep and gone back to take the ACT or SATs again. Maybe I would have gotten more scholarships.
Maybe I didn’t get more scholarships because my application essays sucked. I don’t remember any of them, but now that I’m quickly approaching 40 years old, I can safely say that I had no clue why I was going to college. It wasn’t necessarily engrained in me that it was the thing to do, but I had no plans. I distinctly remember getting all of those college marketing materials in the mail, and opening them up to see the list of degree programs and just picking one. I chose Deaf Education. Why? Because I’m deaf in one ear, have been since childhood. I thought it would be cool to learn sign language.
That right there is the depth of reasoning behind my college choice, and career choice. In 1993, I chose to pay borrow the money for out of state tuition stacking up at $13,000 per year. Now – that might not seem like a lot, but in 1993 it was. And guess what, it still is, because I’m still finishing the payoff of those college loans. I’m nearing the end now, but I left that school after 1.5 years. Then I went to a few community colleges and the University of NE at Omaha. After about 3 years, I quit going to school and moved to Colorado. After screwing up my finances and not making enough money to pay all my bills, let alone these student loans coming due, I signed up with a credit counseling agency to clear up my debt. Through that process, I realized I really learned a lot about money. I wanted to learn more. I wanted to teach others about what I had learned. Maybe I could influence others to avoid the same dumb financial mistakes I did. What did I do next? I went back to school and got a Business degree with an emphasis in Finance. Insert more student loans here.
How much do you think we learned about personal finance in college? Zilch. Zero. None at all.
I finally graduated in 2002. It’s been 10 years, and I’m still not done paying off all of the cumulative loans that I got since 1993. It was somewhere in the ballpark of $65,000 in student loans. Again – may not sound like a huge deal, but when I did finally start working a job where I could teach people how to handle their finances, it was for a non-profit organization, not a lucrative salary.
I don’t care particularly what happens with student loan interest rates. I don’t feel that I have a RIGHT to borrow at low interest to further my education. I haven’t proven anything to the world yet. Earn what you think you deserve. Don’t feel entitled. I hate politics, so I won’t engage in the politics of world economics or how we’re falling behind or anything else. I would probably engage in conversation about why the rate of college tuition increases are disproportionately higher than the rate of inflation.
Here’s my final point. I didn’t have anyone stop me from my dumb financial decisions. I wish someone would have. I challenge you to have a conversation with yourself or your kids entering college. Talk about what they want to be, what will it pay? Are they investing $120,000 for an education that might hopefully land them a job making $25,000 a year? If so, you might want to have a conversation about community college for basic classes! Invest in what you know will have a good payoff. If the payoff is not good – consider how much you pay (or borrow) for your education.