How It Feels To Be A Student With Debt: My Story
by Rodney Noriega
Coming out of high school, I was filled with excitement and anticipation for my upcoming years of university. I enrolled in Simon Fraser University for a Bachelor’s in Business Administration. My plan was simple: obtain a degree so I could land a respectable job that would pay well.
I had about $8,000 in scholarships. That would cover my expenses for my first year, and I didn’t have to pay living costs because I stayed with my family. So financing my education wasn’t a concern for me at the time.
However, at the start of my second year, I needed to take out student loans. I didn’t have a part-time job and my parents didn’t have enough money to support me. I thought this was a minor issue because I was optimistic that by the time I graduated, I’d be able to pay off my loans right away. Now I realize that this way of thinking helped lead me into the debt I’m burdened with today.
I felt fortunate to have my federal and provincial student loan forms approved every time I applied. Usually, the loan amounts that I received were large enough to more than cover my tuition and textbook costs. This gave me a surplus amount of cash. I could have used that surplus cash to reduce my debt. However, as a student who never had much income at the time, I enjoyed the idea of having cash in the bank to spend on new clothes and accessories, electronic goods, and social activities such as dining out and partying. I convinced myself that this short-term pleasure spending was fine, because I’d be able to repay my loans when I found a job, after graduation.
As my debt grew over the years, I started worrying a bit about how long it would take to repay my loans after graduation. Although I was still confident that my earnings would offset the debt after graduation, I started paying more attention to my spending. I became more conscious of how I spent money when friends told me their own concerns about repaying student loans. To cut their debt before interest started accumulating, many of my friends were saving money though part-time jobs or through co-op education work terms.
When I realized that most of my friends with student loans pursued this common plan, I felt guilty for spending my leftover loan amounts on unnecessary things.
Still, I didn’t worry much while I was studying. It usually stayed at the back of my mind. As a university student, I was constantly thinking about my assigned readings, exams, essays, study group meetings and project deadlines. The full course-load every semester kept me from thinking much about my debt. I also took comfort from the six-month grace period for repaying student loans. Even though interest gets charged during that grace period, I knew I wouldn’t have to make payments until six months after graduation. I saw that six-months grace period as breathing space to look for a job.
Fast forward to graduation, and now I find myself owing a pretty sizeable amount of debt to the government!
I would have owed significantly more if I hadn’t participated in the co-operative education program, but I still feel irresponsible for not being wiser in managing my loans. I should have saved the surplus amounts I received from every loan. That would have accumulated to give a nice repayment amount back to the government. Instead, this large student debt feels like a huge gorilla on my back, and I’m struggling to get rid of it.
It doesn’t help that I ended up graduating during a recession, where budget cuts eliminated job opportunities and produced high unemployment rates. That was unexpected, since the economy was strong when I went to university. It was a challenge to find a job after I graduated and, while I eventually found work in the insurance field, the work isn’t relevant to my business degree. However, I needed to settle for that job until I could pay off my student debt. My career plans have had to be put on hold.
My spending plans are also on hold. I earn enough income from my insurance job to buy a car, which would be convenient since public transit isn’t very good where I live. But I can’t buy a car with so much debt to pay. I’d also like to move out and live on my own. That’s something I’ve wanted to do for a while – establish independence from my parents. I’d also like to backpack across Europe or explore different parts of Asia. Unfortunately, none of these plans seem feasible for now because I have financial obligations to the government. I have this huge gorilla on my back that restricts me from living carefree.
Of course, I realize that borrowing from the government was inevitable, since I had no other sources to fund my education. But my debt could have been much lower today if I had managed my loans better. For example, I could have found a part-time job during school to fund my social spending instead of using my loan money.
I also could have educated myself about the student loan application process. Like many students, I usually skimmed through the terms and conditions and loan details that include too many words in very small print. This ‘fine-print’ detail on student loan forms can intimidate students who don’t fully understand what the terms mean. As a result, they end up skimming through these sections without really knowing what they read – or possibly even skipping whole sections before writing their signatures at the end.
Speaking for myself, it would have helped if I had understood student loans better in terms of how much extra I’d need to pay in interest charges, the best way to minimize those interest charges, how long I’d have to repay the whole debt after graduation, and so on.
If I had known those types of things when I started university, I’d have less debt today. I’d also have more freedom to choose the best job for my career or to spend my money on things I want, like a car, living on my own or even travel.