When I was studying in optometry school, student loans were the last thing on my mind. I had much more important things to think about, such as studying. I also worried about which sub would I get from Subway for dinner that night. And would I use the piece of crap laundry machines in the basement of my apartment building or just wait to bring my laundry to my parents’ house that weekend. Truly life altering decisions.
I knew my student loan debt would be pretty high when I graduated. I couldn’t really put a number on it, but I had a vague sense that it would be in the six digits. Maybe. I wasn’t too worried as I thought of student loans as being just another regular monthly bill to take care of when I start working. Most professional students feel that when they start working and making the big money, the loan payments will take care of themselves. While most medical professionals and lawyers do make a good income, the student loan hit after graduation can still be a little bit of a shock. Luckily there is a “grace” period to get ready for your payments, which equates to the banks saying, “I am going to repeatedly punch you in the face for the next 20 years. I’m just giving you a few months to get ready.”
While student loans were not on the forefront of my mind during school, I was slightly more cognizant of their effects than some of my classmates. While many people in graduate school receive those magical award letters and sign them without even looking at them, I knew that taking some time to figure out how much money I really needed would save me a lot in the long run. And it did. While I did end up graduating optometry school with about $160,000 in debt, it could have easily reached over $200,000 if I just took out the max amount of student loans.
When I finally got out of school and looked at all of my loans along with their interest rates, it finally began to sink in that these loans were going to be with me for the long haul. After talking to American Education Services and being gleefully told I was in a 25 year re-payment plan, I knew something had to be done. The thought of paying for student loans for 25 years (I was 25 years old at the time!) was a lot to bear, so I decided to buckle down and read up on all I could about student loans, interest rates and debt in general.
After reading various personal finance books and blogs, I began to develop an aversion to debt. This aversion is something I wish I had during school… maybe I would have taken even less student loan aid. In any case, these were the loans I had to pay and I decided I was going to make a plan to attack them. I decided to pay the minimum payments on all of the loans, and put everything else I could spare to the loan with the highest interest rate at the time. This method is known as the Avalanche method of debt re-payment, and through playing various online calculators, I found I should be able to pay off my loans in 10 years of graduating instead of 25. So far I’m right on track, and hopefully through pay raises and working a little extra here and there, I can get them paid off even earlier.
Looking back, the change in how I look at student loans was profound. While in school I just had a vague notion that I had to pay them back and that they would just be a regular monthly payment I would have to deal with. But after reading up and learning about the effect that debt can have on your finances, I look at student loans as a type of emergency and will try to pay them off as fast as possible. Every student is looking forward to that day when they make their final student loan payment. With my newfound perspective on debt, that day will hopefully be coming a LOT sooner than expected.
About the Author
Syed is a blogger who chronicles his journey towards a positive net worth over at The Broke Professional. He tackles subjects ranging from investing to credit cards and student loans.