Getting rid of the “monkey on my back”: student loan debt
From securities trader to architect to a project manager of teams conducting federally-funded research, Chris’ career has been satisfying and rewarding. Until recently, though, he had been accompanied on his career path by what he called “the monkey on my back” -- overwhelming student loan debt.
Relying on Student Loans to Finance College
Chris (photo above) relied heavily on student loans to complete his bachelor’s degrees in social science and finance and, several years later, his master’s degree in architecture. “My generation was the first that was unable to finance our education through work. I lived off loans during my undergrad and graduate years.” By the end of graduate school, he had accumulated more than $120,000 in student loan debt.
“No one told me that I wouldn’t be able to pay this off easily,” Chris said. “I eventually realized that it could take the next 30 to 40 years – or longer -- to erase the debt.”
The Debt Takes Its Toll
This became a source of great stress for Chris. His student loan payment was the second largest bill each month after his mortgage, but he was hardly making a dent in his overall balance. “In the back of my mind consistently was this mountain of debt. Seeing the bill each month was a regular reminder of that mountain,” he said.
“The debt also ate away at my self-esteem. I would hear about classmates who had erased their debt and I felt embarrassed. What did I do wrong? Why did l get into this predicament but others didn’t?“
To help make payments, he took second jobs: a guide for walking tours along the Mississippi River for four years, a kayak tour guide for two summers, and a doorman at a condo building for three years. But this extra work took its toll. “Working every weekend meant missing out on events with friends and family, and I was always exhausted.”
Chris found out about LSS Financial Counseling through its Financial Choice program, one of his employee benefits. “I heard they helped individuals get enrolled in student loan forgiveness programs. But the prospect of contacting someone for help and acknowledging my problem was scary, daunting and intimidating. I thought the process would be lengthy and complicated; I thought I’d be condemned and shamed.”
A Path to a Future Free of Student Loan Debt
He eventually called LSS Financial Counseling office and connected with Financial Counselor Dan Park. “From my very first meeting and each one after that, Dan was very respectful. He didn’t come down from an ivory tower to tell me what to do and talk down to me. He was just another member of the community who had answers and tools. He was there to assist me, not fix me.”
Within an hour into that first conversation, Dan moved Chris’ loans to a type of federal student loan that made Chris eligible for Public Student Loan Forgiveness. This program is available to individuals who work for non-profit organizations, universities and government agencies.
Dan was also able to move Chris to the least expensive repayment plan, which reduced the monthly payment from $500 to $350. The new amount was not only lower; it would remain the same even if Chris’ income went up, unlike his previous payment.
With Dan’s support, Chris then created a realistic budget. He learned how to stay on target for saving money, paying off credit cards and reaching other financial goals. In just two weeks after meeting Dan, Chris was firmly on the road to a future free of student loan debt.
“Instead of facing loan payments well into retirement, I can now erase my debt within 10 years – something I believed would never happen,” said Chris. “My life is much more organized and much less stressful now. Because of the restructured loans, the loan forgiveness and my stronger money management skills, I’ve gained confidence, and I quit my second job.
“I wish I’d known Dan 10 years ago and reached out to him then,” Chris continued. “I’m telling everyone I know about LSS Financial Counseling’s services, especially the University of Minnesota students with whom I work.”
If you are struggling with student loan debt and want to find solutions, LSS Financial Counseling is here to support you. Call 888.577.2277 (Monday-Friday, 8 a.m. - 5 p.m.) to set up your free appointment. Learn more on our student loan web page.