I can't remember what sparked it but one day last December I got mad. Spitting mad. I'm going to make a mothereffing spreadsheet mad. (What/ Doesn't everyone make spreadsheets when they get mad?) So that's what I did. I sat down at my computer, I pulled data, I checked finances and I made a PLANn. I mapped it out and then I declared -- privately to Lee and a few close friends -- that 2013 was going to be the year I annihilated my student loans.
On October 2, 2013 I made my final student loan payment.
I don't know if I can properly explain to you how that feels. I was the first member of my family to get a university degree. I completely self-funded that degree by government student loans, university bursaries, emergency loans from my school's student aid department (I loved my university's student aid program SO VERY MUCH) and part time jobs. There was one point, during my final year, that I was working three part time jobs and taking a full course load. And yes, there were plenty of times I got a helping hand from friends. I was self-funded but I lots of help in the form of feeding me dinner, loaning me money while I was waiting for student loans to be processed (always paid back in full -- always), or letting me sleep on their floor for three weeks because I didn't have an apartment (my student loan deposit had been delayed due to an office screw up). Oh, and my school's student aid department deciding to just strike through that final emergency loan amount at the end of my final year was a huge helps as well -- maybe more than any of the loans were at the time (and it possibly made me bawl like a baby right in their office).
Even then, with all the help and the jobs, there were times when the budget didn't work. It does't matter how many financial seminars you go to at university (and yes, our student aid department offered those), or how many personal finance books you read, when your budget won't balance and there's nothing more you can cut you are just screwed. Added into that, the student loan program changed halfway through my degree. Where I would have originally had two loans (one federal, one provincial), I'd now be graduating with four loans -- two federal and two provincial, all held by different institutions.
But I made it. I graduated. Perhaps not when I first set out to -- it took me an extra year. And perhaps not quite with the marks I could have made had circumstances been different. That didn't matter and it still doesn't matter. What mattered is that I made it. I walked across the stage, got capped, and now have a big ass diploma (seriously, it's large) that will hang on my office wall if I ever get around to putting it up.
Most of my friends who only did one degree paid off their student loans several years ago. I'd occasionally beat myself up about that and then I'd stop and remember they didn't self-fund their education through the same way. Some of them only had loans their last two years. Their parents were able to help fill the gaps bursaries and scholarships didn't fill. Some of them did paid co-op terms, which helped offset the rest of their years. Some of them managed to grab on to the end of the dot.com and high-tech bubble and get well paying jobs fresh out of school. In many cases, their annual income was higher than their student loan total. My student loan total was double my annual income from my first post-univeristy job.
The first few years after I got my degree were hard. The first six months was probably harder than some of the years while I was in school. I wasn't making enough money to pay my rent, eat, and make loan payments. I had to have a roof over my head. I wanted to eat. Luckily there were options available on student loan payments.
I went on payment deferment for several years for three of my loans. Every six months I'd have to renegotiate with the National Student Loan Program. They would approve the deferment and then they would send that information to the various banks that held my student loans. It wasn't always a seamless process. At one point I had received notice I was approved... only to go to the bank, deposit my paycheck and realize I didn't have enough money to pay rent because a student loan payment had been taken out when it shouldn't. That ended in tears but I was also lucky that my bank was awesome and had it sorted out in less than an hour. (That is part of the reason why I still bank with them today.)
I negotiated with the bank holding my fourth and smallest loan to decrease my monthly payments in exchange for a large lump sum payment within six months. That mostly worked. The loan officer didn't file everything in the system properly and they actually showed my defaulting at one point. I ended up having a conversation with the bank manager over that one. (I was not the only person to have issues with this particular loan officer. Several of my friends did as well.) Luckily that was my smallest loan and I actually had that one paid off within a couple of years. While my income was low, twice a year I received lump sum bonuses that were 75% allocated for loan payments. The rest paid for things like new eyeglasses and some small luxuries (like hair cuts!).
I still had three loans remaining. I assessed my situation, borrowed $400 from a friend, and took two evening courses in a field that meshed well with what I has been doing since graduating. I finished the courses, got laid off, moved to a new city and hit the ground job searching. At this point I could make some payments on my student loans but not quite the full amounts on all them. I moved from payment deferment to interest-only payments for six months while paying extra whenever I could. When I did find a job, which I got thanks to one of those evening courses, it paid much better than what I had been making. I could afford to make full payments on all three loans every month. I could pay rent (without roommates even!), eat, and actually have a little bit of a life. Being able to make full payments sounds like an odd thing to be happy about but it was a turning point. Really.
It wasn't always easy after that, but even when I wasn't fully employed (which happens, especially in the field I was in) I was able to make all my payments. I made small extra payments here and there. I was shocked to learn that by increasing one of my loan payments by a modest $25 every month I shaved 3 years off the total. But those times when I wasn't fully employed (or Lee wasn't) were stressful. I always had that big student loan total hanging over me.
I made my plan of attack. Many experts will say that if the interest payments are the same on all your debts, you should pay the the smallest debt off first. I had a slightly different tactic. The first loan I targeted was the one I hated the most. In January I more than tripled the monthly payment on Loan #1. The final payment for that loan was made in May. Happy birthday to me!
In June, I took the amount I had been paying on Loan #1 and rolled it up into Loan #2. I was now paying more than four times the amount I had been on second one. This loan happened to be the smallest one. I made the final payment on Loan #2 second week in August.
Two loans down! One to go! For one brief and glorious moment I thought I'd be able to eliminate the remaining loan in September. Then life happened -- as it does -- and smacked that dream down. After being totally bummed for a week, I regrouped. I made a new plan. My October payments ended up being more than 7x the usual payment amount but on October 2*, I got it done.
From the point I stared making full payments on my loans, it took me one month less than eight years to pay off my student loans. All told, it took me eleven years after graduating to paying off all my loans. Had I not dramatically increased my payments in this year, it would have taken me another three years at the regular payment amounts to fully pay off my loans.
Those first few years, where I was negotiating payments every six months were incredibly stressful. There were also a lot of years were I wasn't saving very much for retirement. And if I was still living on a single income, or if I had become a parent at any point, I'd probably not be writing this post for a few more years.
There were times when my student loans were a stressful pain in the ass but I know this -- they were worth every. single. penny. I am so thankful that they were available to me. Without them, I likely never would have gone to university or finished it. I know many people consider a Bachelor of Arts a useless degree and I know this because they've said to my face. I also know that getting my BA was one of the most important things I've done and it's been indescribably valuable to me. It gave me options -- good options. No, I'm not a historian or an archaeologist (my two majors) but I use the skills I learned in university every day I work. University taught me how to think critically and how to move through large amounts of information quickly. It taught me how to pull through all-nighters, which yes really is skill I've needed at work. It taught me yes, having money makes things easier, but not having a lot of it doesn't make things impossible -- just harder. It taught me how to think outside the box.
I don't know that student loans are the right choice for everyone and if I would not encourage anyone who didn't absolutely need them to get one. If I had to do it all over again, I'd still take them and the stress that comes with them to get my degree. But I'm not the least bit sorry to be saying goodbye to them.
*Due to the loveliness that was one payment already pending, attempting to figure out how much was actually owing, the fact that it takes a minimum of two days for a payment to be processed and the crazy math is that daily compounded interest, I did have to make one more payment a week later… for $0.13. ARG!