Student Loan Takes Another Big Drop – Thoughts About Life After Repayment

Joe — Fri, 21 Oct 2011 14:28:38 +0000

Well, it’s been a short while since I wrote the last student loan debt drop entry back at the end of August. The reason for that is because of some major family and professional events that came up over the last few weeks. Many of these family events were really happy, joyous family activities surrounding my older brother’s wedding. So I was a bit preoccupied with those things to stop and focus on writing about my student loan debt, but taking a break for a few weeks isn’t such a bad thing either!

Down to $42 thousand

Planning for all of the family and professional expenses from the last few weeks – amid trying to stick to an aggressive student loan repayment schedule – has been an interesting exercise for me. In short, I’ve been able to stick to a basic repayment schedule while certain funds were diverted for these events – and I’ve been able to stick to a basic schedule without dipping into any of my savings account, which is good. For a guy who works at a nonprofit organization during the day and teaches online at night, you have to admit that this is pretty impressive!

And this exercise has been interesting because it served to show me how rigid my repayment schedule has been over the last few years. What does that mean? Well, for the last six weeks or so I’ve allowed myself to change my focus from putting every extra available dime towards student loan repayment to holding back on every expense/cost ranging from saving money to repaying student loan debt to purchasing certain, necessary new items for my home, etc. And do you know what this exercise has shown me? It’s shown me that once I repay that United States Department of Education student loan, I’m going to have a good amount of money coming in. No, it’s not going to be enough for me to immediately make an impact on other areas of my financial life (i.e. super saving to bolster my retirement funds, buying a house immediately after paying off the loan, etc), but it’s going to be pretty nice.

The trick, though, is to figure out which goal is next.

Do I begin by bolstering my retirement accounts? Do I begin building a major down payment to eventually purchase a house? What about saving for a few months to be able to purchase a brand new car? Maybe I could save money in a series of liquid investments such as CD ladders, money market accounts, generic savings accounts, etc…

I know what I won’t do once this remaining student loan is paid off, though: I won’t try to achieve all of these financial goals at one time. I think that my story – up until this point and God-willing over the next 12 to 18 months – has proven that focus is the key to achieving financial success. I’ve opted to spend the last few years focusing my financial efforts on repaying my student loan debts and I’ve come a pretty long way; far enough to see the light at the end of the tunnel. When I reach the end of this tunnel, I’m not going to be the dog that caught the fire engine and wonders, “What now?” Nope. Instead, I’m going to have a plan of attack for my next big financial focus.

And the great part of this all is that I have a whole year and a half to figure out what that focus is going to be. What about all of you out there in internet land. Do you have any ideas on what my next big financial focus should be once this remaining student loan is paid off? I’d be interested in hearing your ideas!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $61 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $42 thousand in principal to the United States Department of Education’s Direct Loans program – a loan which started repayment in July 2006 with a balance of $59 thousand. To date, I’ve repaid well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

Community Colleges Challenge Four-Year Schools

Joe — Sun, 17 May 2009 03:56:15 +0000

As a follower of movements in higher education I love this story. The New York Times recently reported on a new phenomenon in higher education – namely the increasing number of community colleges that are offering Bachelor’s Degrees. I think that this is a great story because it shows how community colleges are bringing the same type of competitiveness that is found in the private market into higher education.

This is long overdue.

Florida leads the way, with 14 community colleges authorized to offer bachelor’s degrees, and 12 already doing so, in fields as varied as fire safety management and veterinary technology. But nationwide, 17 states, including Nevada, Texas and Washington, have allowed community colleges to award associate’s and bachelor’s degrees, and in some, the community colleges have become four-year institutions. Others states are considering community college baccalaureates.

In most cases, the expanding community colleges argue that they are fulfilling a need, providing four-year degrees to working people who often lack the money or the time to travel to a university. But some of those universities are fighting back, saying the community colleges are involved in “mission creep” that may distract them from their traditional mission and lead to watered-down bachelor’s degrees.

Personally, I think that the traditional four-year colleges have too-long enjoyed the monopoly of giving that small piece of paper that so many people need to reach the next levels of their current careers or break in to the career that they want. And what’s great about the community colleges offering these degrees is that they are offering super specialized versions of the traditional degrees.

For example, instead of the generic “public administration” degree students can now get a “public safety administration” degree, specialized for their specific discipline. It’s brilliant.