Monday, May 7, 2012

My Number Part I

Ever since Serendipity on Serendipity's Guide to Saving came clean about her student loan debt, I'm been wrestling mentally about whether or not I should do the same thing.  This blog is about financial honesty, and I'm not really embarrassed about the amount that I owe, it just seems like not knowing how people will react/potentially judge me, makes it uncomfortable.  It's my number, and I've told very few people my number--I don't even think BF knows.

But, in the interest of coming clean, financially, I'm going to share my number and the way I got to it.

Right now, my student loan debt is $100,000.  Yes, that is six zeroes.  It's enough to buy a decent house in most parts of the country, and it is more that I will ever be able to pay off.

So here's how a 30-something girl comes to owe that much money to the federal loan program.

My story is a combination of foolish mistakes, wanting to embrace life, succumbing to peer pressure and working in retail with very little willpower.

Freshman year of college was the first year since age fifteen where I didn't have a regular job.  I went to college and wanted to immerse myself in learning and having new experiences, so I didn't want to work, but I had saved about $5000 from my high school jobs.  Turns out that I'm not the kind of person who can or needs to spend hours upon hours doing homework, and I was shockingly bored.  I picked up some odd jobs around campus, and worked at my high school job over Thanksgiving and Christmas break, but by spring semester, I was looking for a regular job to stop me from bored shopping all the time.  Thankfully, this was before online shopping was much of a thing, but I did seem to invent a reason to need to go to Target almost every day.

After that, I got a job at Barnes & Noble where I basically spent every penny I made in the store.  By this point, I had started carrying a balance on my credit card every month, and had gotten two new cards just to stretch thing out a bit.  I'd moved into off-campus housing with three friends, and we wanted the house to be decorated in a nice way, which meant buying a lot of things from Target.  We also wanted to do things that are considered a college right of passage--like spring break in Mexico.

By the time I got to Junior year, my debt was getting very, very high, and I honestly cannot think of any one thing that I spent all the money on.  The years of just buying a lot of things and charging them all started to snowball.  Junior year was the year that I was going to do study abroad, living in England for five weeks, then touring Europe for another three.  I was working 40 hours a week trying to pay down debt but it didn't occur to me to really save money as well for the trip, since I figured I would just put all my purchases on a credit card.  Before I went to Europe, my debt was ballooning at about $8000, after I got back, it was over $10,000.

While I was in Europe, I failed to make the minimum payment on one of my credit cards, because I didn't really have any available cash, and they wouldn't let me do a balance transfer from another card.  I missed three month worth of payments, and was sent to a collection agency.  I negotiated with the collection agency and got my debt reduced, but I also had to make huge payments of $1500 at a time, which I'm still not sure how I was able to do.  Senior year, I ended up failing a few classes because I was working too much and was too distracted by everything else that was going on, so I had to do a fifth year.

By this point, I was back working at Barnes & Noble full time and I had taken a second, 20-hour-a-week job at night.  My parents quit paying for college at this point (they paid for the first four years), and I'd cut back to doing school part-time, so didn't qualify for financial aid.  I paid cash for tuition for the next year and a half until I graduated, and tried to pay down debt with every other penny that came in.

At the end of five and a half years for an undergraduate degree, I didn't have any student loan debt, but I did have a lot of credit card debt.

Stay Tuned for Part II: Grad School


  1. Wife is way up there too, due to 2 graduate degrees (One at Boston College where rich people dine on poor souls) and all the coursework for a doctorate. She was very upfront about it when we met, which is one reason I knew I could trust her.

    Despite all the good things happening, we still have her college debts in forebearance, like a pendulum of pain in suspension waiting in the wings. We hold on to the idea that the government can only take 10 percent of your income as payments, but that won't be the case for the Sallie Mae chunk.

    I appreciate the honesty and bravery of writing about this, and look forward to part two.

  2. Ooh, ouch. My son is about to incur some grad school debt. It scares me FOR him, but he's done the research.

    I hate student loans. Our boys managed to get through college without any, so that was a gift I could give them. Really hits home with them now that they see peers struggling to meet payments.

    Good post...

  3. I owe $69,166.76. This is broken up between two loans: $23,167 @ 4.75% and $45,999 @ 2.25%. I'm just happy that it's going down.