Sunday, October 9, 2011

The FIRST loan

Here's how it all began...

I started my college career at a public out-of-state university.  After my scholarships and financial aid I still owed about $15,000.  Parent loans were not a possibility and I was worried about having to make interest payments while still in school, so I chose to finance the remainder of my education with private student loans.        

Together my father and I decided that I should take out $18,000.  The extra $3,000 to cover books, food and any incidentals since it was not possible for my parents to assist me financially.  I had a lot of good times, and made some really great friends, but in the end it was just too far beyond my means. After completing my freshman year I transferred to a university back home estimating savings of about $10,000 per year.

*Mistake #1*  I was wholly unprepared!  I was a first-generation college student and I had no idea what I was getting in to.

*Mistake #2*  I didn't take advantage of all of my federal loan options.  These are ALWAYS the best option!

*Mistake #3*  I took out money for the entire year.  I should have taken out my loans each semester on an as-needed basis.  At the very least I would have saved myself a semester's worth of interest.

*Mistake #4*  I thought loans were "no big deal".  Before going in I read that the average borrower pays back their loans in 3-fold.  I assumed I would have a mortgage payment by the time I was finished.  I assumed correctly, but did not realize the impact of what having a "mortage" payment feels like without the cozy home to live in and while still paying rent on top of it.  ugh.

*Mistake #5*  I snubbed my nose at the thought of community college.  After all I was graduating at the top of my class.  I could not go to community college.  (On a side note, I am from a very rural area and the nearest community college is a 45 minute drive away to a smaller rural community.)  Depending on the major this could be a great option.  For me, it could have only provided me with 1 semester of useful classes, and subsequently would have put me behind in math and physics.  However, I did not realize that community colleges in the big city offered all but one class for the first two  years of my degree program.

*Mistake #6*  I did not make the best use of my time in high school to get a jump start on my college career.  I originally had registered for PSEO my senior year at a college 3 hours away, but I got scared about being away from home, and missing my friends... Yep, bawk bawk bawk! 

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