Graduated Learning: Life after College

I got my degree, I got a job…now what?

Let’s talk about Student Debt: Part 1: Digging In May 24, 2012

Filed under: Personal Finance — Stephanie @ 11:29 pm
Tags: , , , ,

Let’s be honest.  EVERYONE is talking about student debt right now.  With the big article in the Degrees of Debt series in the New York Times, to in-depth discussions on Marketplace Money, to the latest political grandstanding (on both sides) about keeping Federal student loan interest rates low, it’s hard to escape the discussion.

It’s not a new issue.  But every once in a while, everyone starts talking about it again.

So, here’s my story, and my thoughts, on the subject.

When I was getting ready to go to college, I didn’t really know how I was going to pay for it.  I was encouraged by friends and family to go to MIT, even when Rutgers was offering me full tuition (I’d still have to pay room and board and other expenses).  MIT seemed like a better fit for me, and I wanted to go.

My parents had socked some money away in some mutual funds for my 2 sisters and me, but it was not enough to cover all of us.  We filled out the FAFSA forms to see what sort of financial aid we could get.  I was eligible for a small federal loan (not sure if it was subsidized or unsubsidized), and for “work study”, which really meant that I was able to get a job from MIT to earn a little money.  (I worked at the MIT Libraries for a semester or so in the back rooms processing new books).  I had a few scholarships I got through my dad’s work, and a few other tiny merit-based scholarships awarded to students at my high school, but that’s about it.  In retrospect, I really should have tried harder to find more scholarships.  Any amount would have helped.  I also didn’t take all the AP exams for my AP classes, because I misunderstood the way that MIT accepted AP credits.  Oh well.

So, to make up the difference between what aid/need-based discounts I received and the actual cost of going to MIT, I had to take out private loans.  Yep, those loans that they tell you to try your hardest to never have to take out.  There just wasn’t another option.  As a middle-class family, we were doing well enough that we couldn’t get a lot of  need-based financial aid, but we weren’t loaded enough to be able to pay upwards of $160k to send me to college for 4 years.

So, each year, I took on private student loans.  My parents did co-sign the loans.  But it built up during the 4 years at college.  And so when I graduated, I had $57,701.00 in private loans, and $18,218.61 in federal loans.

Honestly, like many of the people talking about student loans, I didn’t really know what I was doing.  I took on the debt a bit blindly, and there were ways I could have taken on less debt.

How could I have taken on less debt?

  • I could have gone to Rutgers instead of MIT.  I don’t think Rutgers was the right fit for me, but had I gone there, I’d have had tuition covered due to in-state tuition+ my GPA/SAT scores.  Final verdict:  Going to a public school would have been cheaper, but if I had to do it all again, I would still go to MIT
  • I could have looked for more scholarships.  I have a feeling there was plenty of money out there that I could have tried to get, but didn’t really look.  Plus, I didn’t really think to look for more scholarships after freshman year.  Final verdict:  Glad I got a few small awards, but I should have tried harder to find funding for freshman year and beyond.
  • I could have tried to earn more AP/college credits before attending college.  Though MIT wasn’t very big on accepting outside credits, had I gone to another school, getting college credits through AP or a cheaper school would have helped lower costs.

There are lots of things I could have done going in.  But I’d like to think that some of my decisions helped me slowly dig my way out of debt.  I’ll talk more in another post.

What were your best and worst decisions when it came to paying for college?  What did you wish you had known?  What are you glad you did?  What advice would you give to high schoolers planning for college?

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3 Responses to “Let’s talk about Student Debt: Part 1: Digging In”

  1. eemusings Says:

    It was never a question for me. I knew where I was going, no matter what. And I was lucky enough to get a full tuition scholarship.

    Sure, I don’t have a super prestigious degree, but I now work in my industry, and that’s thanks to the degree I got. Comms may be scorned even more than Arts, but it’s a practical choice for those who know what they want to do and want to give themselves the best shot at post-graduation employment.

    I could have gotten an Arts degree and done a graduate course in journalism and perhaps had a more rounded, intellectual base of knowledge to draw from now, but I would have had to take out loans for both of those qualifications (probably $25k all up?) And it’s all stuff I can learn on my own, if I so have the inclination to read about politics, history etc in my own time.

  2. I understand the drive to go to a top-tier institution, but having grown up in a small Canadian town, my perception of top-tier was likely a little different than yours.

    Fortunately for me, I decided to do my undergraduate degree at a place that offered co-operative education. This might not be as widespread in the US, but most universities in Canada offer some degree of co-op for the majority of their degree programs. The benefit of co-operative education is that you typically alternate a normal four-month school semester with a four-month semester of full-time employment at a job that’s relevant to your field of study. The job pays full-time wages and if you’re smart about where you work and how much you spend, those wages can go towards the following semester’s tuition and rent and food, etc. The job experience looks nice on your resume, too.

    My own academic background is in chemistry, and I too would describe my upbringing as middle-class. But thanks to the benefits of doing a co-op degree, I was able to finish my undergraduate degree with zero dollars of debt, and that’s with minimal assistance from my family (they may have covered tuition for my first semester in first year).

    The caveat here, of course, is that tuition at Canadian universities isn’t on the magnitude of multiple tens of thousands of dollars per year. I wouldn’t dare enter a debate on the quality of education at an MIT/Harvard vs Canadian alternatives, but for the sake of argument, obtaining a Bachelor of Science degree without being $100K in debt certainly seems worth it from my point of view – at least in terms of avoiding the extra headaches/stress one might face before starting their careers or enrolling in graduate school.

    • Stephanie Says:

      We do have co-op options at many universities in the U.S. They sound like a really great idea! Get work experience (and either find out you like or don’t like that type of job), get paid, and go to college? Sounds good to me! That’s fantastic that you didn’t have to take on any debt! I’m a bit jealous 🙂

      Thanks for stopping by to share! I’m always interested in hearing about other people’s thoughts and experiences!


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