The $25,000 Choice

(Cross-posted at This Mommy Gig)

Yes, I KNOW this is a controversial subject and I’m writing it anyway! I also have NO qualms about talking about my personal finances, which I know isn’t all that normal………..

Here are the facts:

• I’m 27 years old
• I have $25,000 in student loan debt
• I have a B.S. in Business
• I’m halfway to a Master’s in Education
• I started my MBA
• My monthly student loan payment is $144.37
• I deferred my loan for 2 years while I stayed at home with my kids

After asking around this morning on twitter, I realized that $25,000 really isn’t over-the-top, but it’s still a LOT of money. How’d I get here? Well, my mom made it clear from my sophomore year in high school that my brother and sister and I would be responsible for paying for our own college educations. Before you start condemning my mother and her evil tactics, let me just say that I THANK HER for that. Why? Well, I chose a state school that was more affordable (but a GREAT in-state business program), I entered college with 7 credits (from AP courses I took in HS), I gained an incredible experience in Army ROTC which would have paid for my education (unfortunately I had to quit after my sophomore year due to physical issues), I worked my tail off all during college at various jobs (that have helped me immensely in my professional life) and arranged my course schedule to enable me to graduate with my B.S. in 3.5 years. I guarantee I wouldn’t have done some of those things (any of them?) if I had someone else paying for my college education.

After my undergrad, I actually went BACK to school - first to start my MBA and then to do a post-baccalaureate program to get my teaching license - these add up to about $10,000 of my total student loans. Were these expenditures worth it? A resounding YES. I’m aching to finish my MBA right now, but I do know when enough is enough for the moment - I can’t see the return being high enough at this time to be worth the additional loans needed…….and our family’s income is too high to qualify for low-interest loans.

As for managing the debt now, I approach it differently than our other debt (cars, house, credit cards). I had no issues deferring the loans to stay at home with my kids because I knew that the education was valuable whether I was “applying it” or not. I see student loans as just a given in my life and the most worthwhile investment I could ever make. The interest rate is lower than on any of the other debt we have and also lower than the interest rate on our ING Savings account - I see no point in paying more than the minimum on this debt and consider the interest accrued during the time I stayed at home to be a more-than-worthwhile investment in our family. As for starting college savings accounts for my kids (whom I love more than anything else on earth and of course want only the best for), I prescribe to my idol Suze Orman’s theory - don’t put money aside for your children’s education before having high interest debt paid off and have money put aside for your own retirement.

So, thanks to my mother for being strong enough to tell me I was on my own and I hope my children appreciate me doing the same for them……………..

If you're new here (or just forgot last time!), you may want to subscribe to my RSS feed. Thanks for visiting!