Money Misstep #1: Student Loans are cheap money

“You wait a while and your ship will come in, Working 9 to 5, what a way to make a living” – 9 to 5

For the age my husband and I are we were both told we would not get any where in this world without a college education. So, after some drifting, my husband found something he wanted to do and went and got a college education.

It’s funny how when you are focused on the bullseye you don’t really see the rings around the target.  We should have seen the bigger picture.

Every semester the academic counselor helped pick a schedule, sent us to the business office, we signed on the dotted line and *bing* we were off and running on another semester, fully funded.  (Quick Note:  We have never taken loan money for our cost of living, only strictly for education.  I worked while my husband went to school and we paid all our living expenses out of our own pocket.)

We should have done more research, take less classes, drawn out the degree an extra year, applied for more scholarships.  Hindsight is 20/20 so let’s get back to the present!

Student loan money can be cheap if:
1) You have no other debt
2) Your student loan amount is small
3) Your student loan is a fixed rate.

Fixed rate student loans are anywhere from 2%-10% LOWER than a credit card.  So yes, it is cheap money in comparison to other debt you might get into with credit cards, car payments or mortgage loans.  BUT it is entirely unsecured.  You have nothing to sell, give back or bargin with.

You hope and pray when you get out of school you will get a good enough job to pay back what you have borrowed and in this economy, even that is a gamble.

As you might guess none of these applied to us.  We did have about $5000 in other debt, the loan amount was huge and the only way we could obtain it was on a adjustable rate.

As I sat down to think through this part of our story I have just finished reading this NYTimes article on student loan debt.  It reflects exactly where we find ourselves today.

But not to end today’s thoughts on a sour note!  My husband did graduate and does love his 9-5!  There is good in all of this and that is the blessing of a job that he loves.  Not many people can say that about their chosen careers!

AND now we have a chance to work hard, grow our faith and encourage YOU on this 100/100 journey.

Join me tomorrow for:  Enough Whining, Where’s the Good News?

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~ by Rachael Judd on June 17, 2010.

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