Broker Check

3 Lessons Learned from College

Client Centered

3 Lessons Learned from College

College is so expensive these days. I went to DePaul University, a private university in Chicago from 2008-2012. My grandma had generously set aside some money in a UGMA college savings account. With my first quarterly tuition bill, I wiped out that UGMA and my life savings from working summers as a life guard. My parents helped out with what they could, but for the most part college was on me. Each year, tuition and Room & Board were close to $30,000. I was lucky to have a partial athletic and academic scholarship, without this, I would NOT have gone this school. I was really passionate about running and invested in my education, but track was also a job to me. I know that the sacrifices to my social calendar when we were practicing every day and traveling for competitions were going to help me down the road. When I graduated, I had $15,000 in debt, which is much less than the national average of $30,000. I spent the next two years living cheaply with a family member and throwing every extra dollar I had towards those loans. This allowed me to be debt free at age 24, to save and invest more than my friends, and to purchase my condo soon after.

This is my college story. I would consider myself lucky in comparison to some of my friends and family who struggle with paying back loans well into their 20’s and 30’s.

Here is what you can learn from me:

1) Choose college based on your own financial situation. Parents – what costs will you be paying? If paying for school is important to you, consider opening a 529 college savings plan when your child is born and start savings years in advance. College tuition rises on average 6% a year. You can try to keep pace with this by investing. If you do not have the financial means to pay for your child’s college, educate them on options for free two year programs and the Tennessee promise program. If they want to go to a big “name brand” school like Tennessee; that is great, but show them what potential loan payback could mean.

For example: Child, if you take out loans for UT for 4 years, you will leave college making on average $45,000/year and paying back $400/month on your loans for half of your life (10% of your salary!).

2) Understand the different types of loans. This was my mistake. As a freshman, I took out both subsidized loans and UNsubsidized loans. I mistakenly thought that my debts would not be due until I graduated from school. With UNsubsidized loans, interest accrues while you are in school. My eyes were opened while viewing my first bill that already had accrued $1000 of interest. I was also shocked to see  the rate on one of my loans – 6.8% per year. Clearly the government is in this to make money. I was determined to get out of debt.

3) Scholarships. Apply for any and every scholarship you can. Thank you Guidance counselor Gilette for making me do this. My high school had many easy to apply for scholarships. It took 15 minutes to apply and I received $6,000 over 4 years for tuition because I listened to him. If you are Native American, google: “Native American scholarships” and apply for everything you can.

Overall, I made some good choices and some bad ones with regards to school. I hope that you are more informed and can use my experience to make better decisions about college for yourself or parents, for your children.