My student loan story escalated quickly. I should have seen it coming.
I had just earned a Master of Arts in Management degree and it was the summer of ’14. I was living with my parents and while looking for a job. My first summer in the “real world” was going as planned.
That didn’t last long.
I woke up on a Saturday morning with a hangover (sue me) and an itch to get organized. I went downstairs and saw a letter from Sallie Mae with my name on it. “Oh, I wonder what this is” I remember thinking… Just kidding – I’m not that big of an idiot. I open it up and see that my first loan payment will be due in a couple of months. Sweet.
My parents were paying for my first year of college by taking out their own loan, but I was responsible for the rest. Knowing that, you’d think I would’ve had a clear picture of my student loan debt all throughout college, right? Wrong. But hey – this Saturday seemed like the perfect day to finally get my arms around it.
I checked all my loan servicers and totaled them up.
$170k? Ok…. Alright.
“Wait – $170k???”
I went through my tuition bills and totaled those up, just to check. My math skills were unfortunately on point. Moral victory. What was more unfortunate was the fact I DIDN’T HAVE A JOB. I knew one thing for sure, though. I was definitely going to live at home for a while. Yeah, I screwed up. To get a better sense for exactly how that happened, let’s go to the beginning of my student loan story.
My Life Before Student Loans..
When I was looking for colleges, I wanted good academics, good parties, and a campus that wasn’t in my home state. Looking back, I just didn’t apply to enough great colleges.
Mistake #1: I didn’t even consider a school with in-state tuition
My best options were Syracuse to pursue journalism at the S.I. Newhouse School of Communications and Wake Forest University to study Economics. After scholarships and some merit-based aid, both schools would cost about $25k/year.
I chose Wake for the warm weather and better liberal arts program after taking a journalism class in high school and becoming disenchanted with that whole path. I figured Wake Forest gave me the best chance to expand my network and get a great job after graduating.
Mistake #2: assuming my parents would save me
I was bent on having a completely new experience from what I had growing up and I simply didn’t have a sense for how much $25k per year actually was. Up until that point in my life, I had been 90% reliant on my parents for money. I had some part-time jobs during the summer, but I had almost no understanding of money because I never had to make important purchases.
My parents never discussed money. I would try to get a peek into their financial situation, but they’d never divulge anything. I was about halfway through college when I found out what my parents earned annually.
When it came to my college decision, my parents always told me they weren’t going to fund my education. At the same time, I didn’t put any work into finding out how I’d pay it back . In the back of my mind, I was relying on my parents as usual.
If I knew their entire financial situation, would that have changed my life’s direction for better or worse? I went to college with full confidence in my future. I had no idea how my student loans were going to rain on my parade.
Living “The Dream”
I went to college as a confident and self-conscious young man with a much smaller worldview than I was aware of. I came from a relatively small town in New England and it wasn’t particularly affluent. My friends’ parents didn’t own huge businesses, they didn’t own $80k cars, and they didn’t make their kids wear Croakies and boat shoes. That was all new to me at Wake Forest.
Mistake #3: thinking I would get a job if I started looking junior year
I was a fairly typical student aside from the fact that I was a white kid with an afro and zero idea about how to build my personal brand. Sure – I went to school, got decent grades and avoided getting arrested, but I wasn’t getting internships at investment banks during the summer like my classmates. As my student loan clock was ticking, I was working a pointless desk job that brought almost nothing to my resume. This hurt my chances of employment considerably.
To make matters even worse, I didn’t even check on my student loans! I never consolidated the information, made small payments, or came up with a plan for payoff. If Wake Forest let me attend class, I was happy. My parents were all over it, I thought. Why did I ever think ignorance was a solid strategy?
Unsurprisingly, I found it difficult to land a job after I graduated. I must have had 10-15 interviews, and even though I would advance in the process, I never sealed the deal. I constantly got feedback that there were other candidates with related internship experience ahead of me. Ouch.
Mistake #4: doubling down on my debt without looking at costs vs. benefits
I didn’t like the idea of going graduating and going home without much confidence in my skills or chances of being hired, so I enrolled in Wake Forest’s one-year Master’s in Management program. This is a crash course in business that gives you the technical and soft skills to compete in the marketplace with business majors. Interviewing, networking, marketing, financial analysis, operations – you name it. I took out another $60k loan without as much as a second thought.
So… Where You At Now, Chief?
I’ll gloss over some of the positives here to catch us up and keep the dark vibe going. I got a job in Boston that I could commute to about a month after graduating. Fantastic.
Unfortunately, I had $170k in student loans. On one loan, I had already built up close to $20k worth of interest! Ouch. If I just made the minimum payments on my student loans each month, I still owed about $1,200.
Turning the Corner for the Better
I researched how to pay off student loans as quickly as possible every single day. I started to learn a lot about money.
I had always envisioned going off to college and never returning home to live. I didn’t want to be that guy. I mean, maybe I’d stay home long enough to save some dough and buy a house, but that’s about it. My student loans definitely changed my life, and it was a beautiful change. Guess what? I started using my brain to think about money! I decided to live at home until I had beaten my loans to a pulp.
Since then, my student loans have driven me to be more efficient and effective with my money habits. Sure, I go out to eat (no avocado toast, though) and drive a car (not about that minimalist lifestyle), but I no longer spend money on things that don’t bring long-term value to my life. I’m focused on filling my life with experiences rather than things. If I can find a way to cut an expense, that’s more money I can put towards freeing myself from the burden of student loans.
At the same time, having this huge debt on my shoulders has served as an incredible motivation to increase my income as much as possible. The faster my income grows, the faster my student loans shrink. Up until six months ago, I spent 3 hours per day on a commuter bus and used that time to study for certifications as opposed to sleeping or watching movies. In 3 years at my first job, my base salary has increased 53% and I’m on track to pay off my loans 2 years from now.
Making Home at 30
I created Home at 30 so people could learn from my mistakes. I’ve learned so much over the past 3-4 years from people in the personal finance community that it absolutely blows my mind. If I had only known these things when I was in high school, how much different would my life be?
Pondering that question gave me the urgency to add value to other people’s lives. I won’t sit idle and allow other young minds to fall victim to the trap of society. Now that I know better, I feel it’s my responsibility to help spread awareness about money habits that will improve the lives of others and allow them to live financially free from an earlier age.
I don’t regret my past because it’s gotten me to this point and I feel very thankful to be in the position I am. What I would regret is missing this opportunity to help people beat student loans and improve their college experience, career, and financial situation.
Do you have a student loan story? What drives you to be better? Leave a comment below!
All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.
Author: Josh Ramos
Josh has paid off $130k in student loan debt in 4 years. By founding Home at 30, he wants to help end the student debt crisis by helping students and young professionals make decisions that will reward them for a lifetime.