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?