I recently did my taxes and found out that I paid $4,292.48 in student loan interest last year. This number is appalling and makes me physically ill.
That is approximately 50% of what I paid towards debt in 2012.
That is close to 25% of last year’s income.
That could easily afford my dream vacation with my mom.
That is 10 months of my rent.
That is a healthy emergency fund.
When I see numbers like that I can’t help but think of derailed dreams, a postponed future and lingering in limbo. I can’t help but think how much that money would benefit me now and all the things I could do with it. Even more, I think if I were to donate any fraction of that amount, how much it could truly help other people.
How did it get so bad? When I went to undergrad, I took out $23,000 in loans at 2.5% interest rate. If I didn’t go to grad school, I could have paid that off in 3 years and still lived a reasonable life.
But I did go to grad school, something I am trying to come to terms with. Something that I am not trying to resent, regret and become a bitter part of my life. I never felt oppressed or trapped with my loans before grad school. Some time after I graduated undergrad, the student loan industry changed.
I received my 68k in Graduate PLUS loans at 7.9% interest.
I think that is just absurd. To go from getting student loans at 2.5% and within three years going up to 7.9%? It seems so cruel. Honestly, if I just had 55k in student loans left to pay back, I wouldn’t feel that bad. I know I would pay it off eventually.
But with this crazy amount of interest, it always feels like you are taking one step forward and two steps back.
When you make a 1k payment and see that $600 of that is going towards interest, what’s the point? Refinancing my student loans is something that I definitely looked into to lower the interest rate. Depending on your situation, it could be a good option for you too (though it’s important to know that you’ll give up federal student loan protections).
But sometimes it does feel like a trap you can’t get out of.
A game that no one can win.
A cruel joke.
Now when I was 26 and signed my loan paperwork, it was very different from when I signed my loans at 17. At 17, my dad pretty much told me to sign at certain places so I could go to college. I was much more independent and aware at 26. Leaving my career for grad school was the biggest decision of my life at that point…and I took a vested interest in reading everything carefully. I remember reading about the changes in the student loan industry. I remember using the loan payoff calculators to estimate my payoff date. I remember panicking and thinking that the interest would be a lot. At the time, I had so much faith.
Having a dream and making it happen regardless of the cost feels amazing- and that is what I did. Submitting to a disappointing reality after that dream, is frustrating, and can downright cause an existential crisis.
Although I am feeling so angry, frustrated and helpless with this student loan interest, I cannot give up. I have to play their game. I’m already 20% there in a year and half and if I give up now it will all be for naught. The more I pay, the lower the capitalized interest will be. I need to be patient, calm, positive…..and try to find that faith and hope that I had not so long ago. As my partner said, I cannot be a victim of my debt, or they have won.
I am still a person who loves, feels, has shelter and at the end of the day is supremely lucky. Although contrary to this blog, I cannot let it define me.
How do you get over extreme disappointment or deal with massive debt? Tips helpful!