Oct 05, 2017

Financial Education Explained by Danielle: My Student Loan Story

My parents, both alumni of Loyola Marymount University, graduated in the late 1980’s. This was a few years shy of when FAFSA was officially created. As the eldest child in my family, I was designated as their “guinea pig experiment” when it came to applying for financial aid and navigating the student loan process. As tuition for higher education has risen over 400% since the 1980’s, and I could sense my parents’ hesitation when they told me to reach for the stars as I started applying to colleges during my senior year. Although my parents thought I was too young to discuss their annual income with them and how much money they were going to request for student loans, I always kept that thought tucked away on the back burner.

Three years later, and with my undergraduate degree in hand (yes, I did it in three!), I wasn’t so convinced that I had my finances all figured out after I saw the amount I owed on my student loans (and this number was before accrued interest!). This short video is a humorous—and eerily accurate—representation of how I first felt. All those words of reassurance from my parents seemed to fade away in the distance and were replaced by the Jaws theme music (you know the one) as the due date for my first student loan payment approached. This all too familiar situation for Millennials who find themselves struggling to pay off their student loans can be summed up in this short clip.

If I could have been involved initially with the student loan process before I went to college, I would have saved the money I earned from my summer jobs to minimize how much I would have needed to borrow. My advice: If you have the ability to do so, start paying off the interest on your student loans while you’re in school. Stressful as it may be for you, you’ll end up thanking yourself later as that number becomes less menacing post-graduation.

Fortunately, I now have access to online tools that have helped me vastly expand my knowledge on topics that I was not previously well-versed in, such as compound interest (which can work against you when it comes to borrowing), credit cards, and, of course, student loans. Even though I just started paying off my students loans, I feel more confident that I did before in terms of taking responsibility for my financial future.

My two ¢ents: Be adamant about staying involved when it comes to family finances. It’s definitely a tough subject to delve into at the dinner table, but it is more beneficial than harmful. If you have siblings like I do, take the time to sit and share your knowledge with them on what they can do to take charge of their financial future.

Questions:

  • How would you facilitate a conversation about student loans with your family?
  • What benefits do you think paying off your student loans while you’re in college have?
  • If you’re still in high school, what financial advice would you give yourself now that you hope you’ll still be following later in life?
    • If you’re like me and you’ve already graduated college (with debt to pay), what advice would you give to incoming freshmen regarding managing their finances in college?

Play the latest NGPF game: PAYBACK which was recently featured in the NY Times. 

 

 

 

picture credit: http://www.collegehumor.com/post/6891553/game-of-loans-graduation-cap

About the Author

Danielle Bautista

Danielle is a native of Southern California and a recent graduate from the University of Maine, where she braved the frigid winters—a feat in and of itself—and earned her Bachelor's degree in International Affairs. She has a passion for working with non-profit organizations and serving populations in underprivileged communities. When Danielle isn't writing NGPF blog posts, spearheading various outreach projects, or managing contests and flash surveys, you can find her doing some sort of outdoor activity, learning a new hobby, or cracking what she thinks are witty puns!

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