student loans credit card

Damsel in Debt

On the first day of my summer internship, without preamble my boss said, “Can I ask you a personal question?”

“Of course,” I replied apprehensively.

“How much do you owe on your student loans?”

The question made sense, since I was interning for a credit counseling company, but it still caught me off guard. I quickly threw out some estimate around $12,000.

At least, that was the number I had seen the last time I checked the financial aid section of my university website. We spoke some more about student loans and moved on, but I couldn’t help feeling vaguely annoyed with myself. Why wasn’t I sure of my debt?

So I decided to check again. There, it still said $12,334. I felt good. It was an intimidating figure, but not unbearable.

However, something in the back of my head told me to check the lender’s site specifically. I was inexplicably nervous as I began to type in my login. My nerves were justified when I learned that I owed over $3,200 more than I thought.

I then descended into a quarter-life crisis.

Why I decided to take out loans

Being a first-generation college student meant I had little to no guidance when it came to the application process. My only real source for information was my older sister, who was in the process of graduating college as I was graduating high school. She advised me to apply to colleges by the early decision deadlines, read over my essays, and helped me fill out my FAFSA. So once it was time to make a decision on student loans, she was the one I turned to.

Like all students, I vaguely knew that loans were a bad thing – they could somehow negatively affect my credit. But I wasn’t sure if I could make it through college without them. I felt overwhelmed and unsure, so for months they sat in my financial aid package, unacknowledged.

On the weekend before classes started, I asked my sister whether I should take them. Without hesitation, she told me I should. At first I questioned her, but she told me: “It’s not just tuition you’re paying for. You need to cover your housing, a meal plan, books, and you don’t have a car. What will you do?”

I couldn’t argue. She was right. I certainly didn’t have the money to pay for those things, and I didn’t want to ask our parents.

“You’re living four hours away from me and six from mom,” she added. “What if there’s an emergency? You’ll need the money eventually, trust me.”

And I did trust her.  So I decided to take the loans.


Easier than algebra

Taking out the loans was incredibly easy. Like, ridiculously easy. The school’s website listed the loans available to me: two for the fall and two for the spring. Some said subsidized, others said unsubsidized.  All I had to do was check off boxes beside the loan amounts and press submit. That was it. There were no requests for a signature, no quotes given about interest rates, and no information regarding the lender.

There were a lot of things I didn’t know then. Like what my interest rates were, or that my unsubsidized loans were accruing interest while I was still in school — increasing the amount I would eventually owe month to month. (Subsidized means the federal government covers the interest while I’m still in school.) I didn’t know how long it would take to pay my loans off, and I certainly didn’t know the amount I owed.

All I really knew was that when I pressed a button, I had a combined $4,350 distributed into my account for the school year. I had placed pizza orders online that were more complicated.

I think that’s another thing that convinced me this was no big deal. The simplicity of getting the loans made me think the process of paying them off would be just as easy.

What I’m doing now to fix my debt

I’m just in the first week of my internship, so I’m still freaking out a bit over my debt. I have one year of college left to go, so I luckily have time to minimize the damage. I’ve done the math and feel secure that I can cover whatever my financial aid doesn’t, so I’ve declined all loan offers for my senior year. Right now, I’m in the process of figuring out a financial plan and have currently sent out three applications to companies that offer tuition assistance to employees.

If taking out a loan is essential for you to attend college, my advice would be to educate yourself on everything that comes with them before you decide to take one out. The lenders won’t do it for you.

Learn about the differences between federal and private loans, get information regarding interest rates, find out when your first payments are due, and try to pay the loans back while you’re still in school if you can.

Also, listen to your instincts. People will try to advise you financially, and they mean well, but you’re the one who will be paying the loans back. Do what you think will be best for your future.

I’m still a novice when it comes to loans and debt, but in the first week of my internship, I’ve learned more about the process than I have in the past three years of college. I wonder if that says more about me or the way college works.

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