Last week I posted about how I just crossed the six figure mark with my net worth. Out of that post came some comments about my student loans which got me thinking. Everyone’s financial journey through college is different. Some people leave college debt free, while others are less fortunate and might be paying for their education for at least a decade. Below are a few examples of scenarios of people I’ve come across through my collegiate and working years:
- Parents had a college fund set up for them from birth, paid cash for whole education. Left college with zero debt.
- Lived at home for first two years while attending community college. Transferred to university after two years and maybe took out a couple small loans.
- Went to a private school, funded everything themselves. Left college with ~$100k of student loans.
- Grew up in single parent household. Grants, financial aid, and scholarships covered everything. Left college with zero debt.
- Killed it in high school. Was in all the clubs. Crushed the standardized tests. Scholarships paid for almost everything.
Personally, I was a mixture of many of the scenarios above. Below is a little peak into my pre-college and college years, mostly from an expense standpoint.
High School – I always tried in high school and got good grades. Once junior year rolled around I started enrolling in Advanced Placement and college cooperative courses. By the end of senior year I had over 20 college credit hours completed, all at a cost of less than a thousand bucks total. I also did well on the SAT’s and secured a half tuition scholarship to my state’s university.
College – Grandma and Grandpa covered my first semester freshman year. Aren’t grandparents great?! Loans covered second semester. After freshman year I calculated that I could actually graduate college in three years, if I stuck exactly to a course plan I mapped out. Since I knew I was responsible for a majority of the cost of my education, I figured out it was a no-brainer. Loans covered years two and three (with some help from my parents), and I graduated after my third year. At this point I had taken out approximately $29,000 in loans.
Master’s – A week after I graduated with my Bachelor’s degree I started my Master’s program. The program ran about $20,000 but my employer was footing the bill for half. Therefore I took out $10,000 in new loans to cover the rest of the balance. I worked while obtaining this degree, and it took me just over a year to finish. It was a tough year but I definitely wanted to get it over fast, and I wasn’t going to suspend my career while getting it.
I always had jobs in high school through college and that covered my books, eating out, trips, and of course beer. All said and done I walked away from college in about four years with a bachelor’s and a master’s degree and about $39,000 in student loans (not including interest that had accrued in the meantime).
Overall I think I made out pretty well. $39,000 in loans for two degrees wasn’t too bad, and I knew people who were far worse off. The monthly payments were definitely manageable for me and I was throwing any extra cash I earned at the loans with the highest interest rates as soon as my income started coming in. I even paid them down while they were deferred when I was obtaining my second degree. As you can tell I was not a fan of them and wanted them to disappear fast. Today my balance is below $8,000 and the interest rate is quite low at 3%, so I don’t have as much hate towards them anymore.
My key financial takeaways from my college years are:
- Take advantage of classes in high school in which you can earn college credits on the cheap.
- Apply to both public and private universities as the financial aid packages and scholarships offered will differ. I only applied to my one state university since it was the only place I wanted to go. I wish I had applied to some private schools as well since with my grades and test scores, I probably could have gotten a healthy financial package comparable or even better than what I received at the state school.
- Apply for as many scholarships as possible. I didn’t really take advantage of this, and I really wish I did.
- Major in a degree that will get you a decently well paying career right out of college. I’d definitely say go the STEM route or business (i.e. accounting or finance).
- Always have a part-time job to help pay for books, food, and fun activities.
- Take advantage of your employer and encourage them to help foot the bill of further education.
Sometimes I wish I just went into a trade such as carpentry or electrical, and began earning a decent paycheck at 18 right after high school. But then I think I wouldn’t have the finance and accounting background I have today to enable me to be diligent in my path down the financial independence lane. Also I don’t think I could put a price on the friends I made and my experiences. College was definitely the way to go for me, even after figuring in all the costs.
How did you finance your education? Any tips for people starting to plan their college careers? Was it worth it?