There is some debate about whether or not a person should pay off their student loans. Some view it as good debt because for many, they are the only means by which to receive a higher education in this country. Others see it as bad debt because well, debt is debt. I’ve started to see myself as part of the latter camp. When I graduated from college in 2002 (dating myself ha!) , I made the decision to consolidate my loans immediately. My interest rate has never gone beyond 3.7% since then. However, interest is still interest and it sucks that the government is charging you to educate yourself. I thought the whole point of getting a degree was to improve your skills and contribute something of value to the workforce. You would think the government would want to help young people facilitate this process…. but they seem to want to make things as hard for people as possible. Some people are paying upwards of 10% in interest and don’t get me started on private loans. How are these kids supposed to support themselves, start a family and buy a house all while simultaneously digging themselves out of a debt hole while their balances never seem to go down? It’s madness.
I thought that by going to a state school in my hometown of NY, I would save some money as opposed to going to some of the private colleges I applied to. I was accepted to Oberlin College which was $30K a year (gasp) at the time but decided against it as I only received a partial scholarship and would have to get on a plane to travel home to see my family. I couldn’t justify the additional costs when I could just stay home get a decent education and not go further into debt. I came out of school owing about $27,000. I then proceeded to defer payment on my loans for no good reason after I graduated. I just never made paying them back a priority as I thought they would always be around. Thank goodness for all the amazing info the web on how to improve personal finances these days. And there are so many people who have paid off massive amounts of student loan debt and that gives me hope. I know I can pay this off (currently owe about $18,600). But the main reasons that I want to pay off these loans? See below!
- I want to honor my word. As messed up and as corrupt as the student loan industry is (more on this in a later post) , the bottom line is that I knowingly borrowed money and signed promissory notes to pay that money back at some point. I take responsibility for the fact that I didn’t ask more questions around the student loan process (hey which 18 year old does) and did not educate myself to really understand what I was getting into. My signature was a promise to make good on my intention to pay back money that essentially did not belong to me.
- I really don’t want this hanging over my head anymore! . I have been dragging this loan debt around like a malignant tumor. It’s kept me in jobs I didn’t like, apartments I wasn’t comfortable in and just cast a pall over my life altogether. I’m thankful that I don’t owe more but it is still a lot. However, I make enough through my job to pay these off aggressively in the coming months.
- I’m buying a home within the next year. Why compound debt on top of debt? I realize that taking on a mortgage is debt but at least a house is an asset that I can possibly profit off of down the road. You could make the argument that my degree afforded me the chance to obtain decent employment and that in essence does pay over time but again I really only want to be dealing with ONE debt at a time.
So there you have it, my main reasons for getting rid of these loans for good. Are you paying off your student loans? What do you think is stopping you? Leave a comment. Thanks for taking the time to read this!