If you have student loan debt, there’s no doubt you will learn some student loan lessons.
Paying down student loans isn’t easy, that’s for sure. It takes consistency and a willingness to prioritize your student loan payments over other things like a vacation or buying new clothes every other week.
And if you’re really focused, you often forgo smaller purchases because you’re constantly reminding yourself that “hey, I could spend $10 at Chipotle orrrrrrrrr put that money towards my student loans this month”. It’s a constant battle of this or that.
And this dawned on me recently: If I stopped paying my student loans today, interest would still accrue on them, meaning the total amount I owe would go up indefinitely, day after day, month after month.
Kind of scary to think about the fact that if I didn’t try to pay them down, they’d just continue to increase.
So really, if this sounds familiar and you’re currently pretending like your student loans don’t exist, trust me when I say that coughing up the minimum amount necessary now to pay your loans each month is a far better choice than neglecting them now and owing much more later on.
Take Action For Your Financial Future
If you let your student loans scare you into inaction, they won’t stop being an issue. They’ll continue to rise if you neglect them.
And as long as your loan(s) have a balance above zero, they’ll always be in the back of your mind as a constant reminder that you aren’t financially free, and that your net worth might be far lower than you’d like.
What I’m getting at is this – there are many, many disadvantages to having debt (far more than those listed above). We know this.
But as much as it is a battle ridding yourself of your debt and student loans, there is some good that comes with that large sum of money that’s hanging over your head.
Here are 5 Life-Changing Student Loan Lessons That I Learned From My Student Loans.
My Student Loan Debt Background
I graduated college with $60,000 of federal student loan debt. I then refinanced some of that debt to private student loans, so that I could get a lower interest rate and a lower monthly payment on my debt.
If forgiveness or the federal student loan payment pause that started in 2020 (under the Biden administration) had occurred while I had debt at all, I probably would’ve wished that I didn’t refinance my federal loans.
After my grace period was over (6 months after graduating college where I didn’t have to make student loan payments), I really dove into personal finance. That initial year and from then on, I just couldn’t stand having such a large monthly payment on top of all my other bills.
Flash forward 4.5 years and I became debt free – but not without first learning these important lessons.
1. Owing someone money is no fun at all
Owing money to someone or something else is stressful. And if you don’t pay them back, who knows what could happen (hint: bad things).
If you stop paying your student loan debt, for example, and you let your debt rise, you’ll just owe your lender money for longer, and because of interest, it’ll be that much worse.
I don’t know about you, but I want to truly own all of the money that I worked for. I don’t want to get paid and have to give some of my hard-earned cash to someone or something else.
By becoming debt free, you get to experience the thrill of keeping all of your money to yourself.
You also get to then use that money for the things you truly want. Not for debt payments, but for saving up for something you want or need.
2. The power of interest
I have a love-hate relationship with Interest. Hate it when it comes to my student loans, and love it when it comes to my retirement account. In both cases, Interest is very powerful and compounds effortlessly.
In the case of my student loans, at one point my lender made $10/day off me in interest alone.
This was in addition to the amount I took out to go to college. Great for my Lender, not great for me. In the case of my retirement account, I make more money than I contribute, just because of interest and its ability to grow my money.
My student loans have helped me understand how interest can hurt me and help me. When I realized how fast it was accruing on my student loans, and how much I was paying my Lender because of it, my eyes were opened and my student loans became a priority.
I realized the faster I pay off my student loans, the less interest I’ll end up paying my Lender. And when I realized my retirement account was growing rapidly because of interest, it made me want to contribute more and more to encourage and take advantage of compound interest.
3. My Student loans are my responsibility, not my parents’
When I first started making my $300+ monthly payment for my student loans, I wasn’t mad at myself or my school or my lender, I was mad at my parents. Why couldn’t they pay for this? I thought.
As time went on, I realized: I’m the one who was a college student, I’m the one who got a college degree, and now I’m the one that needs to pay for it. To fault my parents for the cost of my higher education just doesn’t make sense.
If anything, I should’ve thanked them; they’re the reason I had books, lived in an apartment, tried a sorority, played club basketball, had a car with gas, groceries, clothes… all of my college expenses and college costs.
I was extremely lucky to have been given any of these things at all. I really didn’t “deserve” any of it. Just because they’re my parents doesn’t mean they have to pay for me (especially after the age of 18, no less!).
I feel bad for my initial attitude but I’m glad I learned this lesson: That the cost of my college education has been my responsibility from the beginning, not my parents’.
4. The importance of having a budget
I’m not going to lie – budgeting used to be the farthest thing from my mind. Everyone always talked about how much it stinks, so why would I even consider something that seems to be such a waste of time? Well, times have changed.
When I started to get serious about my student loans is when budgeting became something to consider. I wanted to save more and spend less so it was simple: I’d create a personal budget each time I got paid.
And here’s the thing – it is not hard and it doesn’t stink. In fact, it’s simple, easy, takes me no more than 10 mins, and it works. I can always be better about “sticking to” my monthly budget, but at the very least it makes me aware of my financial situation at any given time, and that alone has saved me from making many ill-advised purchases.
5. Debt repayment is a marathon, not a sprint
This one probably seems obvious. It often takes us much longer to get out of debt than it does to get into it.
You just have to do the best you can, and put whatever amount of money that you can toward your debt each month. Progress is progress no matter how slow!
Finding the positives throughout your debt free journey will help you tremendously. Remember that debt isn’t ALL bad, and that it can teach you so much about your habits and choices. Having a growth mindset in this regard will help you stay grateful rather than resentful along your debt free journey.
Final Thoughts
My federal student loans and private loans really changed me. They’ve taught me invaluable life skills like:
- How to make wise choices and financial decisions – the only way to stay out of debt at this point is for me to make smart decisions. If I’m honest, the first thing I really wanted to do when I finally started getting paid for my first job was get a new car. That would not have been the best first major financial decision to make on top of $60k of student loan debt, you know? 🙂
- To be grateful
- That financial literacy is key – there are so many different types of student loans (and financial terms out there in general) that it’s important to understand, at the very least, what YOU are going through with your money
- That credit cards can be a slippery slope
- That there is a student debt crisis – young people and college graduates every where are facing over $1.75 trillion worth of debt
- The importance of setting financial goals
While I wish my student loan balance was smaller, I am grateful for all that they taught me nonetheless.
This post was all about 5 Life-Changing Student Loan Lessons That I Learned From My Student Loans.
Other posts you might like:
- I Paid Off $60k Of Debt And Didn’t Get Student Loan Forgiveness – Here’s How I Feel
- 9 Ways My Life Has Changed (and Hasn’t) Since Becoming Debt Free
- Paying Off Debt? 2 Books You Must Read for Motivation
- 3 Major Life Changes I Made on My Debt Free Journey
