An estimated 43.6 million Americans have federal student loan debt, which totals over $1.7 trillion. As the rising cost of college outpaces the average family income, it seems inevitable that more students will become part of this statistic.
But taking out tens ― if not hundreds ― of thousands of dollars in debt is a major decision. And in the case of college loans, it tends to fall on teenagers or students in their early 20s, many of whom might not have the necessary support system to make informed choices.
“It’s really critical to think about the long-term financial consequences of student loans,” Erin Lowry, the author of “Broke Millennial Workbook: Take Control and Get Your Financial Life Together,” told HuffPost. “You should be evaluating what is the best situation for current you and future you.”
To help those going through this process, HuffPost asked people who took out student loans to share what they wish they’d known before making this big life decision and what they’d tell others in that situation today.
There will be life opportunity costs.
“Think about the age you’ll be when the term of the loans ends as the potential starting point for a lot of life’s possibilities. If you’re 22 when you graduate with a 15-year term, you’ll be 37 when you’re finally not making that monthly loan payment and might be able to afford other big expenses. Some expenses, though, like housing, may have to wait even longer because you won’t have been able to build up any savings while paying off your loans either. The life opportunity costs need to be considered as much as the financial costs.” ― Dominick Bagnato, writer and filmmaker
You don’t have to go straight into college.
“I would think about whether going to college right away is for me. I remember after high school, I wanted to volunteer abroad or take an internship overseas. In so many countries, it’s normal for young people to take gap years. I would tell myself to go the non-traditional route even if it doesn’t make sense to anyone else. I would tell students to take your time! It really doesn’t matter if you graduate in two, four or six years. Take your time as you adjust to ‘adulting’ for the first time. Also, you have the freedom to change your mind. If you don’t want to start college right away but want to start a year later, that is OK. If you have to take time away and come back, that is OK. This is your life at your pace.” — Dominique Jackson, journalist and travel entrepreneur
Your loans might limit your job options.
“If you’re going to college to pursue the arts, realize that internships and entry-level jobs are very important when starting your career. Think about if you’ll be able to choose those roles and still pay off your loans. If not, you might be forced to choose a more lucrative job outside of your field. That’s fine, but be aware of that. If you’re going to need to work while in school, you may not have time to also be an intern. If you have to pay off a large monthly amount upon graduation, you may not be able to choose a lower-paying job in your desired field (with more potential upside for your desired career) in favor of a higher salary in a field unrelated to your passion.” — Bagnato
Private loans are more difficult and expensive.
“I borrowed all the money I could for both my undergraduate education and law school. So by the time I started at my law firm, I had over $200,000 of student loans, and they were a mix of both private and federal, so not a great start to my professional career. I wish I had known more about how difficult and expensive private student loans can be and how hard they are to pay off. Now that federal loans can cover the entirety of a graduate degree, there are many more options for financing an education. And I think that’s a very good thing.” — Jessica Medina, lawyer turned accredited financial counselor
The big picture can be difficult to grasp at a young age.
“I wish I had known what it meant to take out debt. At 18, I didn’t have a grasp on my summer work money, so understanding the seriousness of taking out five-figure loans was beyond my comprehension.” — Aja Dang, YouTuber
“I wish I would have understood the full financial picture of what taking student loans meant. I would tell my younger self to take the time to thoroughly understand the terms of the loans, including interest rates, repayment plans and the total amount to be repaid ― be aware of the potential long-term impact on my finances.” — Jackson
Paying more than the minimum is key.
“Most importantly, never pay the minimum. This will keep you in debt forever. Pay above the minimum as much as you can so you can start tackling the interest and principal. Explore all your financial aid options first before seeking student loans, such as scholarships, grants, work-study programs and tuition assistance. Only borrow what you need, and be aware of interest accrual. I avoided paying my debt for eight years, and it added $50,000 to my debt payment plan.” — Dang
Don’t obsess over going to the top school that admits you.
“I would tell my younger self that going to a ‘good’ school doesn’t necessarily mean that you’ll get a ‘good’ job after graduation. Start saving money from your college jobs to pay a lump sum toward your debt after graduation during the interest rate grace period.” — Dang
“There’s a lot of pressure to go to the best possible school that admits you, but that’s really the wrong way to think about college. You should be evaluating what is the best situation for current you and future you.” ― Lowry
Your plan for repayment should be thorough and realistic.
“I went to the best law school that I got into, and I paid through the nose for it. People ask me all the time whether I regret taking out so many loans for my education. And the answer is no, I don’t. My Columbia Law School education and degree opened doors for me, and I will always be grateful for my journey, even if I’m not practicing law anymore. All that being said, I do believe if you’re going to take out student loans, then you have to have a plan for how you’re going to pay them off while also balancing other financial goals and priorities. There are ways to do it, and it’s one of the main issues I help my clients think through, but you have to be strategic.” — Medina
“Huge numbers can be overwhelming. Don’t think about the overall loan amount. Instead, figure out what the monthly payment is expected to be and account for variability in interest rates. That’s the number you’ll have to be able to pay (before anything else) each month.” ― Bagnato
Soak up all the opportunities this loan is affording you.
“I’m an advocate for higher education and still think it’s a great option. I think the connection and access college provided opened up a lot of doors for me. I would tell students to soak up everything that college can offer outside of a degree, especially the network of people it can open you to.“ — Jackson
The current system is not sustainable for many.
“I’d probably tell students contemplating loan options that this is unsustainable. Something is going to have to be done about student loans. So don’t be completely without hope. Student loans are enough of a problem that I think it will be a political and economic necessity to provide relief from them. I wish people were more in touch with the reality. Student loans my generation faces are nowhere near the small burden that was faced by boomers. And younger generations than me (I’m a young Xer) have it even worse. The situation has changed. We can’t buy houses, raise families and pay off our loans the way boomers can.” ― Angela Maloney, photographer
Ask yourself if it’s worth it.
“If I could talk to my younger self, I’d say, ‘Whatever you do, don’t go to law school and become a lawyer!’ I did it because law practice offers the ability to contribute to the betterment of our country and our world. But student loans meant that I could never do that type of work. I couldn’t afford to work for anyone other than big companies who had a lot of money to pay me so I could pay big companies for student loans for the rest of my life. They are a powerful way of keeping me beholden to wealthy companies. I’d warn students to think twice about whether an education is worth it anymore. I have warned quite a few students not to go to law school. The education was valuable. But it wasn’t anywhere near worth what the student loans have done to me and to my future.” — Maloney
The process is overwhelming. Remember to take a deep breath.
“Student loans are not inherently evil. They allow segments of the population to get access to educational opportunities that otherwise would not be available, and I think it’s important to make sure those classrooms are filled with all different kinds of people. And until education is affordable for all, student loans are often the only way to gain access. So I support measures to make student loans more affordable, both for those who took them out long ago and for the new generations just starting to pay for their education. And I’d love to see more people treating their student loans as just one piece of their overall financial circumstances rather than the most stressful line on their balance sheet. They’re not even the most important piece!” — Medina