If I could go back in time and meet my 18-20 year-old self, I would have plenty of words of wisdom to offer. The most important financial advice I would give is to not take out school loans, or at least minimize them. You never know what life will bring to your future, and school loans can be very limiting.
When I graduated from high school, I was the first person in my family to go to college, including extended family. To be honest, although I was intelligent, I did not think I would be able to afford to go to college. An adult female friend took me to lunch one day and surprised me by pulling into a private college, walked me into the building, and helped me fill out the college and financial aid application. Next thing I knew, I was going to college! I received a few scholarships that the school offered, took out what school loans I was eligible for, and worked full-time to cover the rest and support myself. Back then there was minimal financial counseling, and they handed out school loans like candy. Seven and a half years later, I was married and graduated with a Master’s Degree in Physical Therapy. I was ready to conquer the world! I was so proud of my education, and no one could ever take it away from me. I quickly found a job expecting to earn a high salary, but was shocked. I learned that because of Medicare cuts, the starting salaries for physical therapists had decreased by about $25,000 over the course of two years. But that was okay, because I was eager to start my career, I was a professional after all, and ready to make a difference in people’s lives.
Six months later, I received the statements from the student loan companies. I had $92,000 in school loans. Gulp! Where did that come from? I had no idea that I had accumulated so much debt. My school loan payments were going to be $1,600 a month. My husband and I managed to make these payments and buy a home. We did not use credit cards and life seemed great! Three years later, we had our first baby, a girl. She was beautiful. And boy, those mommy hormones were strong! No one ever told me how much you love your babies, and that I might want to stay home to raise my children. I went back to work 3 days a week for a year, then increased to 4 days. Within the first few months of returning to work it became apparent we could not make the school loan payments. The lender very willingly consolidated my loans at 7% interest and extended the payments over 30 years. What a relief! Life continued, I had two more children, and returned to full time work out of financial necessity. My children are now 8, 13, and 15 and I still wish I could work less in order to be home with them more. To be able to greet them with healthy snacks after school, to give them my undivided attention and cuddles, to not be so frazzled balancing all the demands of work with home life. Every week they still tell me they wish I could be home. But I am a slave to my school loans. In fact, mathematically (estimates of course) I had started with $92,000 in school loans. In 17 years I had paid only $22,000 to the principal and almost $60,000 in interest. That’s crazy! Even worse, if I continue to only pay the minimal payment I will pay another $50,000 in interest over the next 12 years! I could have paid for 2 of my kids to go to college with the interest I will have paid. I am currently paying double payments and hope to be done before my second child goes to college.
So my advice to any 18 year old, what I am trying to teach my three girls, what I wish someone would have taught me, is that yes go to college and have a rewarding career. But you may develop other goals and desires. You may want to go on mission trips, travel the world, or may need extended time off for medical reasons. And that being a mommy/daddy and a leader of a family is the best job in the whole wide world. Maybe you will want to work full time, maybe you will want the best of both worlds and work part time, or maybe you will want to raise your family as a full time parent. Every family, every mom and dad is different. But I want my children and you to have the freedom to make that choice. And being a slave to your school loans takes your ability to choose away.
Could I have made it through school without school loans? Maybe- maybe not. I am grateful for my education and a job I love. But I wish I had someone to help me look 20 years into the future to see there is so much life has to offer, someone to help me see how my financial choice of taking out too many school loans will forever influence my ability to do what my heart calls me to do. So work hard during the summers to save money, make looking for scholarships a part time job the second half of high school. Because the rest of your life is waiting for you after college.