You think I would have learned my lesson after paying off my undergraduate student loans, but sadly I did not.
As with a lot of painful experiences, the frustration and fear associated with those loans faded over time. So, when I decided to go back to school to get my J.D., student loans seemed less like a burden and more like a tool to increase my earning potential. Turns out I was the tool.
In a few months, I will send in my final payment and be done with student loans forever (and I am so freaking excited!). If you are determined to go back to school, below are my top tips to avoid the student loan mistakes I made.
I sometimes joke that I woke up one morning and decided to go to law school. It’s only a partial joke, really. I went from thinking that having a J.D. could benefit my career trajectory to studying for the LSAT and being accepted by the only school I applied to in about 10 months.
If I had put more time into planning my return to school, taking out student loans to pay for it might not have seemed so inevitable.
Save Up Ahead of Time
First, I could have waited a year and put the money I needed for tuition aside. I imagine a year would have seemed like a very long time back then but it would have saved me a lot of money in interest. Like, a lot of money. Thousands of dollars. No joke.
Are you an impatient sort? Think about my story and give yourself a year (or two) to save up what you need to pay for your degree. Your older self will toast you when she is able to retire at a young enough age to still enjoy life!
Pick Your School Wisely
Second, don’t go to just any school that will have you. This is one area where I made the right choice: there were only two law schools where I lived that offered part-time programs and fortunately the higher-ranked school was also the least expensive by far (and the only one to which I applied).
What programs are you considering applying to? Have you checked tuition costs yet? If it is an online program, does it have a good reputation in your field?
Those letters behind your name won’t matter if the school you go to is inferior in the eyes of the managers making the hiring decisions. That may be unfair but sadly life is not fair. The burden of student loans is ruining lives in this country. Be smart when it comes to where you go to school.
Work While You are in School
Next, try to figure out a way to keep working while you are in school. Even if you only make enough to cover the cost of housing and food, it can mean a world of difference in the amount of debt you take on.
As a bonus, I find that I am more productive when my schedule is full. If I have all day to prepare for class, it will likely take me all day. But if I only have two hours? I am going to be more efficient.
I would also look for additional opportunities to earn extra money. Since I worked full-time during law school, I couldn’t be a teaching assistant but I could—and did—apply to be a property law tutor to first year students. This benefited me both financially (it paid around $3,500 a year) and it forced me to review property law, a topic I would need to know for the bar exam.
Get Someone Else to Foot the Bill
Finally, get someone else to pay for it. Does your current employer—or maybe even a future employer—offer tuition assistance? For example, it seems like nursing is an area where you can find assistance ahead of time. You may be obligated to work for a particular health system for a number of years but if that was the field you were going into anyway, it could work out.
Sadly, my employer didn’t have a tuition payment program I qualified for but I could access a small pot of money for training relevant to my job. This meant that for my research and writing classes, as well as one or two classes where the topic was relevant to my position, I was able to get reimbursed. In the grand scheme of things, it wasn’t a lot but it helped.
Get Rid of Them Fast
About two years into paying off my student loans, I remember looking at the balance and getting angry. 😠
Each month I had diligently sent in my payment and in that time the principal had declined by less than $2,000. I was smart enough to graduate 10th in my class from law school, but not smart enough to realize that the only one winning here was Sallie Mae? What a blow to my ego!
While it took me a few more years before I started my debt snowball, I did immediately start rethinking my loan payoff strategy. Here is what I learned.
Refinancing is an Option—But Be Cautious!
Before I talk about refinancing, I want to make sure you are clear that it is not a good idea for everyone.
Federal loans offer some options and protections that you may not have with a private lender. Deferment, for example, if you were to lose your job. Also, loan forgiveness at the end of ten or twenty-five years for those who qualify. If your situation is unstable, federal loans may be your best option even if the interest rate is high.
In my case, my job was stable and I wasn’t struggling to make my payment. So, the first thing I did was refinance my loans through SoFi, going from a 6.8% to a 4.5% interest rate. This increased the amount of my payment going toward principle and made me feel like I was actually making progress in paying them off for good.
Pay More Than the Minimums (A Lot More!)
A second tip is to pay more than the required minimum. For a couple of years, I paid anywhere from between $100 to $180 more than was due and it definitely made a difference.
Now I am putting every cent I can toward them and it is making a huge difference. If you can start with this approach, I highly recommend it (I sure wish I had!).
Get Someone Else to Pay Them Off
I wish I could say that this third step worked for me but alas, it did not. While I was in school and in the years since I graduated, I have been with the same employer and they do not offer this as a benefit. Your employer may, however.
When you are negotiating a salary at a new job, ask if they have a repayment program. It may be something you won’t qualify for until after you have been there for a certain amount of time but it is always good to know.
If you have helpful relatives that want to give you money (hey—it could happen!), thank them and send them the payment information. Even a small amount will get you a month or two closer to your goal.
Your Student Loan Story
What student loan mistakes have you made and what steps are you taking to overcome them? Let me know in the comment section below!
This post is part of the Student Loan Debt Movement, which is encouraging and inspiring people to take action on their student loans. Check out this website for other stories about getting out of student loan debt, and resources to help you kick your student loans to the curb too!