Do You See College/University As More Debt?


A problem familiar to many people has to do with taking on more financial debt in order to return to College or University. Has this got you or someone you know so stressed and anxious that they’ve made the decision to pass on further education and look for work with their existing experience and skills? If so, think again.

There are a number of reasons you might not be willing to take on extra debt. Perhaps you’ve already got a loan hanging over your head and the idea of taking on more is scary. After all, if your existing debt has you this stressed, you don’t even want to think about increasing it now do you? You might even have an existing student loan such as the Ontario Student Assistance Program (OSAP) here in Ontario where I live, and is it possible you’ve just been ignoring paying off what you already owe, not because you don’t want to pay it off but because you’ve no income to do so with?

This extra debt you’re closed to increasing is worrying because you didn’t complete the program at school that the first loans were for. There’s that nagging feeling that maybe you’d make the same mistake of taking on debt and not finishing a second time; what a waste of unfinished education and more money to owe hanging like a dark cloud everywhere you go.

I’m no fan of debt myself, so I get it. It’s stressful to think about.

I wonder though if, putting money aside for a paragraph or two, we could just focus on the education you might be wanting. You know, it could be that the reason you didn’t complete that other program is because it just wasn’t right for you in the first place. Maybe you weren’t ready for College or University at that time, needed to mature a bit or it wasn’t school at all but something else going on in your life at the time which made focusing on school and putting in the effort impossible. The consequence? You failed or were failing – maybe academic probation and you dropped everything…except of course the looming repayments.

Back in the present however, now you’ve grown. Maybe those, ‘things’ that kept you from succeeding are taken care of and behind you. Or, perhaps you’ve got a better idea of what it is that you’re passionate about and if you could only have the education needed to get going, you’re sure you’d flourish and succeed. That thought is pretty exciting; to know what turns you on and what you’d love to do!

It’s a shame that earlier failed experience and unpaid debt is keeping you from taking on more debt right?

First things first, let’s shift that viewpoint and stop looking at the education fees as debt. Debt is such a negative word. What you are in fact doing is making an investment in yourself. Consider the money needed to buy a house or a car – relatively big and important purchases. Neither of those two investments maintain their value over time with any guarantee – especially the car. Eventually both get replaced too. Education however, wakes up with you every morning and you carry it with you every day of your life. It shapes the way you think and how you experience the world. That investment is a lifelong investment in yourself.

I sense a second problem that has you reluctant to make such an investment; what if you’re wrong? Again. You know, what if you just think you’d like a certain program but then it turns out to be something you don’t? Hey, come on. Instead of assuming something you haven’t even started is going to be a huge mistake, imagine it turns out to be the best thing you’ve ever done for yourself and you do well in school precisely because you took something you really are interested in!

Some people will tell you that even after they finished school they ended up in some minimum wage, entry level job they could have got without having gone to College or University. There will always be these negative views, and they are basing those views on their own experience so you can’t blame them. On the other hand, there are many more people who will tell you that the degree they hold or the diploma they graduated with were needed to get hired doing what they do now and without it, they wouldn’t have been hired. They love their job, they are making use of that education and their income is considerably better than it would have been without it.

Suppose you owe $10,000. You’re thinking, “Yikes!” Okay, so you spend another $8,000. or even double your original amount – you now owe $20,000. Scary right? Of course. But now you have that diploma or degree in your hand and you’re pumped. You’re self-esteem is high, you’re proud of your accomplishment. The resume is stronger, you’re outlook better, and you compete stronger because for the first time, you’re really invested and qualified to get a job you’ll love. So you get a job making $23.00 an hour.

$23.00 p/hr x 7 hours per day x 5 days per week x 4.33 weeks in a month = $3,485.65 x 12 months = $41,827.8 a year. This is the formula you can use yourself to figure out what you’d make a year.

$23 an hour is just a number, but you can see that the $20,000 it total you’d ow can be paid back soon. That’s $41,827.8 a year. Multiply it just over 5 years and you’ll have earned $209,139.00!

Having your current $8,000 debt suddenly seems small when you think of your potential income. Bazinga!!!!!!!

 

Refinancing Student Debt: Good Idea?


To increase your competitiveness in today’s job market; and the job market of the future, you might be considering some time at University or College. This upgrading of your education is for most people viewed as an excellent use of time. The stumbling block for many is the financial cost of doing so; the real or imagined debt load upon graduation, with no certainty of employment and the possibility of some crippling debt for years to come.

Well, first, allow me to suggest you look at the cost of your education from a different perspective. Rather than debt, view this as an investment in yourself; a life-long investment which will pay returns for you many times over down the road. It’s true you know. Yes, you’ll find your education a benefit when applying for jobs where your degree or diploma are the difference between being qualified or not. Then too, you’ll find that promotions and advancing become possible more often when you’ve got some higher learning to qualify you in the view of the employers you seek to advance with. Let me also say the very real and best advantage of a higher education in my mind is the change in the way you think and go about interacting with people post graduation.

Now you might say reframing debt as an investment in yourself is all well and good, but debt is debt in the end.  Okay, it’s true that debt of any kind for many is a source of stress; and the degree to stress you feel often comes down to the size of the debt itself and your personal experience carrying loans. I know when my wife and I bought our very first house, that $75,000 purchase price was scary for both of us. Fast forward to the present and we don’t feel the same level of anxiety as we consider homes in the $600,000 range! We’ve had more experience carrying and repaying loans, and we’re obviously in a different point in life to do so too.

Instead of fearing the imagined, the first good thing to do is do some research and find out exactly how much the education you’re considering will really cost. Factors such as the length of the program, where you live, your personal living situation, current sources of income, and more will affect how much you pay. Financial Officers and Guidance Departments are good people and good places to start. Online estimating calculators can also give you some idea of what it might cost you after you enter in the required information. Don’t rely on someone else’s experiences – good or bad. Get the goods from the source.

Now suppose you’ve already done all this, and you’ve already gone to school, received the education and are feeling saddled with the debt. You want to get out from under this mountain, (be it big or small) and cut your stress and anxiety; axe the phone calls to repay your loans etc. Good! Wouldn’t it be nice to stop those calls and when the phone rings think it might be a potential employer instead of someone looking to collect?

Refinancing your loans might be an option if you want to reduce the monthly amount you owe, or you’ve got the desire to reduce the overall cost of the borrowing. Here’s an infographic which you might find helpful:

https://www.credible.com/blog/should-i-refinance-student-loans/

This came to my attention from Patrick who works at Credible.com Let me assure you I don’t endorse from personal experience, nor am I receiving any payment from this group in sharing the infographic. This organization comes out of San Francisco in the United States, and you can certainly look them up, investigate for yourself if their services are for you, and you can go on to look for other local options wherever you live on the planet.

Refinancing education loans does make sense in many situations. You can pay loans off faster in some cases or pay them out over a longer period but at a much more manageable rate each month if that’s your choice. Yes you would in that case pay more overall, but you’d be able to sleep better every night – and with no harassing repayment calls whatsoever.

Here in Ontario, our provincial government has made tuition costs significantly reduced starting in 2018. You could go for 2 years and have $4,000 to repay upon graduation, as is a specific case I recently heard of. With bursaries and grants, you might eliminate that cost in part or completely too; many students also request some forgiveness of their debts upon graduation which is also a big help. It really does depend on your personal circumstances.

At the risk of sounding cavalier about debt, because it is yours not mine of which we speak and I understand and appreciate that, my general advice would be to not let debt upon graduation stop you from getting a higher education. Learning sticks with you your whole life, much more than the debt of financing a car, a house or a trip somewhere exotic.

There is nothing in this world you can invest in that will provide a better return on your money than yourself.

What’s been your own experience with refinancing student loans? Patrick mentioned in an email that if only 1 person benefitted from this infographic it would be worth it. I tend to agree. I wonder if you might be that person?

Adding Debt When Unemployed


Recently I’ve had several conversations with unemployed people, each of whom are trying to find some direction in their lives when it comes to their future employment. Now the people I’m speaking of are all on social assistance with few financial resources if any, and most are already in debt with credit cards or existing school loans.

In recognizing that just as each person presents with their own unique unemployment dilemma, I recognize the logic then that the solution for each person must also be arrived at in recognition of their own circumstances. No one option therefore is necessarily the right one for all of them.

My approach in each situation, has been to present myself as a sounding board, then take what I hear and objectively present some options before them on paper, talking of the pros and cons of each, and then letting those choices sink in. Once the two of us have the options before us, I frame some questions for the person which are designed to elicit an emotional or rational response, which might prove valuable in either removing an item or strengthening the likelihood of one option being selected as the preferred one.

Now the thing about identifying pros and cons when faced with any tough choice, is that even when you’ve exhausted all your pros and cons that come to mind, you may still find that what would appear to be the ‘right’ choice doesn’t sit well with your emotional compass. This state is usually reflected when the client is heard to say things like, “Well I know I should choose option 3, but I still don’t know…it doesn’t feel right.”

This inner conflict voiced by the client could be explained a couple of ways. First, it may not feel right because for that client, the choice is the wrong one even though the pros and cons on paper state otherwise. The client’s uneasiness is a warning that to choose that option would later prove to be a poor choice made when looking back. The other possibility is that it doesn’t feel right because that choice is actually the smart one to make and it’s the first of many good choices to come when the client has had a history of making poor choices. It doesn’t feel right to them because their internal decision-making processes up to this point have largely been poorly thought out, and for the first time they are going at decision-making a better way.

One example to help explain this is a situation where a client is already carrying a $35,000.00 debt. It worries them, the stress of that debt hangs over them and yet being on social assistance, there is no way they are in a position to pay down any part of that loan. Now, being unemployed, one option is to return to school and add a university degree to their college diploma. Why take on another $15,000.00 and up the total to $50,000.00 in debt? Wouldn’t that be just more stress, and more to pay back eventually?

To answer this question correctly, you’d need more information, and whether this option is the right one or not for this one client, you’d have to know their circumstances such as the job they eventually want and the barriers to employment they’ve been facing. In this case, the client has a diploma but the job they want keeps requiring a university degree in all the job postings. The combination of both a degree and a diploma in the same field would conceivably give her a unique advantage over others with only the degree.

In speaking with another client also with accumulated debt from previous school loans, they too are considering a return to school to upgrade their education. However, in this situation, the client voiced the opinion that going back to school was in their mind a gamble that when they graduated, there would be a change in the job market and more employment opportunities would exist. This opinion isn’t based on anything more than a hope and a  hunch; a,  ‘things can’t get any worse’ statement. Going to school is more of an evasion  from the real world.

One way to look at things is that investing in yourself by improving your education is the best thing you could actually invest in. You’ll carry that knowledge and those increased skills and general awareness your entire life, giving you more perspective than you currently have. And whether you owe $35,000.00 or $50,000.00, your payments can be identical, you just pay one longer than the other. Debt is debt in other words. Homeowners would see $50,000.00 as a drop in the bucket compared to the hundreds of thousands they’d invest in a new home. So debt becomes relative.

Another option could be to pass on returning to higher education and change their career goals to something they are currently qualified to do, which may or may not make them happiest, or put them in a position to pay off their existing debts anytime soon.

In all cases, I presented 6 options to move forward, and in zero cases did I force them to choose their decision in front of me or make it for them. That decision is theirs to make, with or without further consultation from me. Once decided, direction is laid, action plans can be developed, and forward movement initiated.

Taking on more debt may or may not be the right move.

 

 

 

 

Returning To School Too Expensive?


Okay so you’re out of work. You’ve tried looking for a job but you’re over qualified for some and don’t have the credentials for others. It’s so frustrating you’re strongly considering going back to school for 2-3 years and hoping the job market improves when you graduate. But the cost of school and increased debt is scary.

Does the above situation sound familiar? I’m actually not going to advocate one way or the other when it comes to returning to school, but I want to provide you with some food for thought so you can perhaps make a decision that’s right for you.

You know how people go into debt for things like houses and cars? Most of us eventually do these things, and while the debt we incur for a house is pretty high, we look at it like an investment over the long-term as well as a place to live. We hope when we buy that when the time comes to sell, we sell for more than we originally paid. The car on the other hand depreciates in value as soon as we drive it off the dealers lot, and if we sell it at all instead of driving it into the ground, we lose money in the end.

Both the house and the car however are things we have to continue to upgrade and put money into just to keep them running. With the car its oil changes, new tires, batteries etc., and the house means new windows, shingles, lighting, furniture etc. Don’t invest and the car breaks down and the house becomes worth less quickly.

Returning to school is also making an investment however, unlike the car or the house which are external things, the investment is in you. Eventually you’ll replace the car and the home with something else, but your education sticks with you for life. Based on this, returning to school to learn sounds like a great idea – and it is. Aside from better employment opportunities, you’re going to benefit as a person, thinking differently, broadening your perspective on issues, and gaining in knowledge.

As for employment opportunities, employers do value employees who are knowledgable, and if you’ve got recent education in the field you want to work in that’s a huge plus. In fact, going back to school as an adult learner with years of employment behind you and being in a graduating class of young people who went straight to College or University and have no job experience could work out good for you. You’ve just discovered your edge; your unique value. Not only will you have the same diploma or degree as the rest of the graduates, but you’ve got real world work experience to go with that education, and that increases your value to an employer.

But what of the debt you are so anxious about and don’t want to be burdened with? Okay look at it this way for a moment. Like I said earlier you are in debt because you invested in yourself. Every moment of every day you’re a better individual because of what you learned and the knowledge you acquired. That alone is worth the investment. Your overall earning potential is greater having graduated, meaning the jobs you can compete for are hopefully higher paying jobs; jobs that can help you pay back those loans faster.

The downside now. Many people fear that they will go to school for two or three years, and upon graduating, will only be able to get the same kind of job they could go out and get right now without that diploma or degree. So why end up with $15,000 or $20,000 in debt and then feel you’ve wasted those years when you could have been earning minimum wage in a job?

The people who feel this way have usually run into someone they know who graduated and can’t find employment, so they are waiting tables or something similar and are bitter because they have debt and for them things haven’t worked out. Even with people you know well in this situation, you don’t really know however how hard they are really job searching, how they are going about it, whether they are reaching out for professional help and even if they are, do they follow the advice given to them when it involves changing how they are going about their job search.

In other words, just because someone else went back to school and is currently unemployed or working in some field other than what they went back to school for, your personal experience doesn’t have to be the same.

What I do believe is that if you are only putting off school because of the money, give yourself a wake up call and run to school and register. If people waited to have children until they could afford it, the race would have died out years ago. If people waited until they had all the money needed to buy their homes, almost all of us would be homeless. Debt is a way of life in 2015, it’s really about how we handle the debt load and reduce it through the payments we make.

So, thinking about going back to school. Check out job prospects and how many grads work in the field once they’ve completed school. Then make your own choice and make it with no regrets. Life is all about chances!