My student loan story

Macaroni_and_cheese_(1)Many professional people in America have a story about their experience with student loan debt. This topic has gained more exposure in 2014 with reports that total US student debt is now over $1 trillion! My part of that pot was relatively small and is now, thankfully, paid off. I completed undergrad in 1997 with about $12,000 in debt. My parents helped as much as they could, but the majority of my tuition and living expenses were up to me to cover. Fortunately, my school was pretty cheap – less than $2,000 tuition per year. For three years, I shared an off-campus house with three other girls and my rent was never more than $500/month. I also ate lots of Kraft mac and cheese to get me through!

I decided to go to graduate school within a year of finishing undergrad. I attended a University of California school, so I got the discounted tuition being a resident of the state. After three years of expenses, I graduated with a Master of Fine Arts degree and about $42,000 in total debt from subsidized student loans.

Needless to say, this debt felt like a huge burden and hindrance to me doing other important things with my money, such as saving for retirement or a house down-payment. Having studied the Arts, my post-graduation salary was not spectacular. In March of 2000, my first job was at a not-for-profit company earning an annual salary of $25,000. I consolidated all of my loans into one big loan around that time, locking in an interest rate of 8% that could never be changed or negotiated. At the time, I didn’t know that rates in the coming ten years would fall to less than half that. Ugh.

For a few years, I deferred my loan payments due to my minuscule income, but I didn’t want to do that for too long. So I started making the minimum payment every month and watched the balance barely tick away. A few years later, I was making $33,000 a year at a job with very few overtime prospects, so I took matters into my own hands and got a second job. At almost 30 years old, I took a night/weekend job at The Gap in my local shopping mall over the holiday season.

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Working the cash registers, helping 20-something girls pick the perfect jean, and folding the infamous “denim wall” were not my idea of fun. The hourly pay was mediocre, but I did get a huge discount on clothes (I managed to keep that in check). After proving my worth during the Christmas crush, they asked me to stay on and become a “cash wrap specialist”, who got to close out all of the registers each night instead of folding clothes – I was in! I continued my part-time employment there for over a year, sending nearly all of my earning to Sallie Mae (which was about $450/month).

I ended my employment at The Gap when I decided that I had enough of retail and my loan balance was getting within striking distance. The next year, I was laid off from my main gig, which was surprising and upsetting. The bright side was that I was under a time-based contract that was broken, so I received a lump payment of several months salary. With that, I killed the last of the loans and found a new job within two months!

So I can now say that my student loans were completely paid off 10 years after I finished school. That was a very happy day in my life. I can’t help to wonder whether I short-change my financial future by accruing this debt, but I don’t believe in holding on to regrets for past mistakes. I aim to learn from them and not beat myself up – I’m more successful at this the older (and wiser?) I get. The contacts I met in grad school led me to my first job in non-profit theatre and later to feature animated films, which is what I continue to do today!

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