Defer as Little as Possible
I applied for as many fellowships, grants, teaching & research assistant positions, paid student internships, and side jobs as I could. Yes, this meant that I had no social life, but it also meant that by paying off some loans in full while still in school, I would avoid paying tens of thousand of dollars in interest after graduation! After my first year of grad school, in addition to living very frugally, I did NOT take out any additional loans (including credit card debt).
As a result, I paid off all my unsubsidized loans well before completing grad school. And, through a combination of intermittent family gifts, and re-directing the extra money that I now was not paying on loans, I began investing in rental property and stocks of small companies. Within 6 months of graduating, I was able to pay off the remainder of what amounted to nearly $40,000 in student loans, principal & interest!
What Has Repaying My Student Loans Early Done for Me?
It freed me to take the job that I really wanted rather than the one I didn’t want but paid more. It freed me to start my own business and invest, decades before I would otherwise been able to. Mostly though, it gave me hope and confidence that I could be wise with my money. It is a wonderful feeling to know that by having the courage to meet debt head on and, as a result, making the choice to invest in my financial literacy early, I will reap fantastic financial benefits for the rest of my life.
What Can You Do?
There are so many options available to you. For example, if you currently have student loans and are still in school, trying finding a teaching or research assistant position with a professor. Perhaps you can tutor on the side. Or if you’re into sports, you could become an assistant to an athletic coach. By digging a little, you might find that you are eligible for a scholarship or a fellowship.
If you are out of school, you might be able to re-negotiate the interest rate(s) on your loans in order to lower the monthly payment. If you are able to lower your interest rate, continue to pay the same amount each month, and apply your interest savings towards expediting paying off your principal balance. This will cut years off of your loan payments!
Finally, if you are at the beginning of your college career, you may be able to avoid loans completely. If you have an entrepreneurial spirit, you can bring in extra money by starting a part-time business in your dorm, perhaps even partner with some friends to help you grow the business. (For example, Steph knows of one entrepreneurial group of college sorority sisters in L.A. who started a very profitable babysitting service! And Brandi has a friend who created & sold welcome gift baskets/kits for incoming freshman. He since turned that dorm room venture into a multimillion dollar business). Starting your own business may even earn you extra college credits – thus decreasing your tuition bill and/or helping you to graduate early. And, hey - if you’re really lucky, you may not even need a job after college! (A girl can dream, can’t she?)
The bottom line is we all need to educate ourselves about the price of paying for an education. It may seem daunting, but it is possible to take out student loans and not end up signing your entire life away! And if you’re really committed, you can even use the experience as a crash course in personal finance – now that’s a lesson that is priceless!
—————————————————————————–
*Judith T. Parks is the founder of online merchandising brands The Pampered Lady and Chicago Fan Gear. Judith holds a Ph.D. in Industrial and Systems Engineering/Operations Research, from North Carolina State University. In addition to being a serial entrepreneur, Judith is a public speaker and internationally published author. She is listed in Who’s Who in America and Who’s Who Among American Women.
| PrintPages: 1 2
Great Article. Wish I had thought about this topic as in-depth as Judy did. Oh well, I am now armed to help my son when he begins his college career. Good thing it’s 10 to 11 years away.
Fabulous! Great article on how NOT to end up in a world of debt! Priceless info! Would love to see more like it. Perfect timing for the graduation season.
Awesome article! I am anxious to share this info with my son who is currently finishing his first year of college! I wish ALL students had this info in order to make more informed financial decisions concerning education & finances in general! Keep it coming!
Very nice story! It’s so nice to read a great success story. Nice tips too! I work for Sallie Mae and figured I’d share another great personal finance tip which fits your story – we just launched a new type of student loan that actually help students keep the college debt lower. It’s called “Smart Option Student Loan” and it requires you to keep up with interest payments while in school and uses a shorter repayment period. So, a typical freshman can save 50% in interest charges and pay off in half the time of other loans!
Great article Judy! I will definitely pass this article on. I know many people that are struggling against the current of student loans. You bring a fresh perspective and much knowledge based on your experience. Be proud of your sucess. You are a mentor!
Judith – this is very sound guidance. It is still amazing to me that a subject as important as personal finances (including debt management) is not taught to our children through out their lives. You were smart enough to work yourself out of a tough spot. This is a story that should be shared with every person entering college!
[...] I don’t love all the Farmville updates). My friend (& recent Fab & Fru contributor) Judith Parks had posted an article about Thomas J. Stanley’s best seller Stop Acting Rich: And Start [...]
Hi,
i’m new here, and just want to say hello!
_____________________________________
order blog
Appreciate the information su much.. thnx,
Helpful and insightful post. Another solid update. Keep it coming!
Hey – awesome blog, just looking around some weblogs, seems a pretty nice platform you are using. I’m currently using Drupal for a few of my sites but looking to change one of them over to a platform very much the same to yours as a trial run. Anything in particular you would recommend about it?
Hi there,
Were using a customized version of WordPress, and http://smartbomb.net helped us with ours. Check them out!
This is precisely what i was looking for. regards for the enlightening post and keep up the good work!
With thanks for another excellent post. Where else could anyone get that kind of information in such a perfect way of writing? I have a presentation next week, and I am on the look for such information.
This is a really great blog. Thx to the auther