The UW Law Library -- where I spent quite a few hours reading and reading and reading...
Last week I picked up a copy of The Isthmus, a free, weekly paper here in Madison. The Burden of Student Debt by Mary Ellen Bell was the cover story. Inside were profiles of students, very similar to me, who racked up debt just shy of $100,000. One women was very similar; a BA, a masters, and a law degree. She too worked in a public sector job (my first 5 years out of law school were spent working for a legislative service agency), avoiding the "sell out" of working for a firm. Granted, she has a small child and when I got out of school I was single and not a parent. But there are two more profound differences. One, it appears that she thinks frugality is bad.
"We are on a really strict budget...we don't make large purchases unless we absolutely have to. We bought much less house than we qualified for; and we drive an inexpensive car. We are thoughtful about little things like buying coffee."What is wrong with thinking before you spend and making sure you don't go too close to the edge of spending too much?
Second, she seems to accept that her fate is to have this debt for 25 years. According to the article, she will spend $550 a month for 25 years to pay off the loans. I too had a similar payment plan, but it was closer to $800 a month, for 30 years. Unlike Spector, I was fired up about paying off those loans early. I wanted to pay them down as fast as I could. This drive was fueled by Great Lakes Higher Education's questionable practices. Telling me if I made 36 on-time monthly payments they would drop my interest rate. I met that requirement, and upon requesting the decrease was told "oh, sorry, your loans don't qualify". I got mad, and I took action. Here are a few things people burdened with student debt can do to bring an end to those loans, and not wait two and a half-decades to send in the last payment. Every cent you save should be sent to the creditor!
- live like you did when you were a student (share housing, use public transit, don't travel);
- sell stuff (I made a few hundred dollars selling the Barbie items from my childhood on Ebay -- they were just collecting dust);
- listen to something motivational (I loved Dave Ramsey's financial common sense, but ignored his politics);
- create a spreadsheet that allows you to project what putting an extra $50 this month towards your debt will save you in the long run -- this is an extremely powerful tool!; and
- take on extra work (I tutored international students wanting to improve their conversational English skills on nights and weekends -- other options: babysitting, house or pet sitting; freelance in your field; deliver pizzas).
Six years after graduating, I sent in my final student loan payment. Six years, not thirty! I didn't go work for a big firm. I spent a few years of my life not living like most people. I worked some nights and weekends for extra cash. I didn't accept the fate of a life of debt. Nor do you!