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My college borrowing story

Posted by Lindie Johnson on Mar 14, 2013 11:13:00 AM

Like most college students, I was convinced I was going to be making the big bucks after graduation. I wanted to work in advertising and to be frank, I never looked up earnings for people in that career. I pictured Hollywood's portrayal of a cool, collected and well-paid advertising executive, and I thought that would be me. I reasoned that I was attending a great school (an Ivy League school, even) and that if my starting annual salary wasn't at least as much as one year's worth of tuition, then what was the point?

As generous as my financial aid package was, it required me - and my parents - to borrow in order to afford our Expected Family Contribution. I maxed out my Stafford Loans, and for my first three years my parents met the rest of the burden by taking on PLUS loans. My fourth year, my parents and I joined up to get a state-based college loan, so I had some more investment in my education. The deal was they would make the payments on the loan until I could afford it on my own.

My last year of college, I spent a good deal of time in the Career Services office. During one particular appointment, my career advisor told me that my expectations for a starting salary in the field of advertising were grossly unrealistic. I didn't believe her. I left my appointment feeling angry, thinking I was going to proove the advisor wrong.

I didn't.Download borrowing guide

Sure enough, my first job out of college paid me more-or-less the average starting salary for an entry level job in the advertising field, and more than $20,000 less than what I unrealistically was hoping for/expecting.

Fortunately for me, I was living in a low cost city and with a few roommates, so my rent was reasonable. I graduated when student loans were still on a variable rate schedule and was able to consolidate them at the historic low rate. I chose a graduated repayment plan, that in the end would cost me much more in financing charges (and of course now I regret), but afforded me a much lower payment at the time. My parents were kind enough to continue paying on my state-based student loan until - years later - I was able to earn enough to take over the payments.

I got by but it was tough. I didn't save anything. I used my credit card when I shouldn't have, accruing even more debt. It took me years to pay off those credit cards and get back on track. It wasn't until 5 years after I consolidated my federal student loans that I even made a payment towards the principal balance, which meant every penny I paid for 60 months was just going towards interest!

I share this story as a warning that researching your career before you borrow is absolutely essential. Before you ever borrow a student loan, you should have a good handle on what you are interested in, what you can do with your skills, and how much money you will make in an entry level job in that field. This will allow you to develop a realistic picture of what your life will be like after you graduate with the debt load you plan to take on. 

To research careers and salaries, you can use the tools available on the RI Department of Labor and Training site and the federal Bureau of Labor Statistics.

When it comes to paying for college, remember to always think of ways you can limit your borrowing, including getting a part time job, making your own coffee, and eating in the dining hall instead of ordering out. Remember to live like a college student now, so you don't have to live like one after you graduate.

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Topics: Borrowing for College