Money Mic: I'm Scared to Pay Off My Student Loans

Student Loans debt
Butch Dill/AP
By Lindsay Meredith

In our Money Mic series, we hand over the podium to people with controversial views about money. These are their views, not ours, but we welcome your responses.

Today, one woman explains why she can't quite get excited about eliminating a debt that's followed her for nearly 10 years: her student loans

If all goes according to plan, my last student loan will be paid in full this June. I'll be debt-free at 29.

The thing is, nearly $40,000 and eight years later, I know how to be in debt. Debt-free? Not so much.

I'm good at being in debt. I know how to juggle payments and budget for automatic debits and track my payoff progress. I know what I'm supposed to do with my money when I'm in debt: Use it to pay my debts down.

When I'm debt-free, what should I do with my extra cash? Save for retirement? Take a vacation? The options are overwhelming, and I'm afraid I'll make the wrong choice.

I feel like paying off my student loans represents some kind of line in the sand: On one side, it's O.K. to be unsure and unsettled. On the other side, it's not. I'm moving toward that other side, and I haven't made it to sure and settled quite yet.

How I Got Used to Living With Debt

My relationship with debt began at the tender age of 21, when I started my one-year master's program in education.
Courtesy: Lyndsay Meredith via LearnVestThe author
I was lucky enough to have my parents pay for my undergraduate degree, so the concept of being in debt was abstract, and I was blasé. After all, this was before the recession, when credit cards were handed out like candy bars on college campuses and everyone I knew was up to their eyeballs in debt. I quite literally didn't think twice about signing on to $25,000 in student loans, or getting a candy bar -- er, credit card -- and charging it to the max. I'd pay it off later, right?

By the time I started my first "real" job as a high school history teacher in the fall of 2007, I had come to rely on that credit card. Living in one of the most expensive zip codes in the nation, near Washington, D.C., didn't help matters. My rent ate up over half of my monthly income, and I had so many other bills to pay that I was barely able to make a dent in my debt.

Around the time I got that first job, I had taken out a personal loan to pay off my credit card debt at a lower interest rate than the card offered. Smart, right? Well, not if you turn around and charge your credit card up again ... which, of course, I did. At the point that I realized I had almost doubled my debt to nearly $40,000 in less than a year -- a low, low moment that led to my first full-blown panic attack -- I vowed to get my finances under control.

Almost overnight, I started working more and spending less. I froze my credit card in a block of ice and switched to using only cash. I canceled my cable, stopped eating out and signed on to work in every after-school tutoring program that would take me. I even had a friend cut my hair to save money on salon costs. I had no free time and got very little sleep during those months, but I didn't care: I was going to pay off my credit cards or I was going to die trying.

My All-Out Effort to Whittle It Down

I used the extra cash to pay off my $6,000 of credit card debt, then my $5,500 private student loan, then my $10,000 car loan. I was good at being in debt, and I got really good at paying it off; I had become addicted to the high that came with cutting down the balance of a loan. I started to live for the pleasure of seeing a $0.00 in the 'total due' section of my online accounts. To be honest, I started to become a little insufferable after a while -- I was a woman obsessed, and nothing was going to stop me from becoming debt-free.

However, I slowed down once my only remaining debt was $10,000 of my $18,500 federal student loan. I knew that at the end of my rapidly approaching seventh year of teaching I would be entitled to student loan forgiveness, because I was teaching at a Title I (high-poverty) school.
So, ready for a break from the extreme frugality of the last five years, I decided to just make minimum payments until that time. Besides, my minimum of $219.72 per month was hardly a king's ransom -- I could definitely live with that payment for a few more years.

Slowly, I started loosening the purse strings. I got my cable back, and rehired my hairstylist. I allowed myself to get takeout once a week and went on a few weekend trips. Life was feeling comfortable again, and much less stressful -- I wasn't wasting money, but I wasn't driving myself nuts trying to conserve it either.

Then, about six months ago, I started thinking about how my life would be changing soon. My debt would be gone -- for good. It suddenly occurred to me that I'd have to make real decisions about what to do next with my finances and, by extension, my life.

And that is when I started to panic.

Why It's Hard Saying Goodbye

Deep down I know that the reason I'm not as enthusiastic about my student loan payoff as I should be is because to me, those payments represent my last tie to my early adulthood, a time when the world seemed full of possibilities and my optimism was endless, and I'm holding on to that tie for dear life right now. Because "full of possibilities" and "optimistic" are definitely not how I would describe my outlook at the moment.

Take, for example, my career. For the first five years of teaching, I was one of the happiest public educators in the profession. But recently, the job has changed substantially, in ways I don't particularly like. (Since I'm still reporting to the classroom every day, I'm not going to get into how, but suffice it to say that for the first time ever, I have to force myself out of bed in the morning.) I don't like this feeling, and I want to go back to the time when I was excited about going to work.

To be honest, I started to become a little insufferable after a while -- I was a woman obsessed, and nothing was going to stop me from becoming debt-free.

Plus, being student-loan-free means I'm old. Like, thirties old. As in, I should have my life figured out by now. I should be married (which I'm not), have kids (which I don't) and know what I want to do career-wise (again, I don't -- not anymore). I'm almost 29 and don't know what the rest of my life will look like.

The closer I get to the end of my student loan days, the more anxious I become. And then I feel silly for being anxious. I know a lot of people who would love to have the problem of not knowing what to do with their extra funds every month.

Pretty soon I'll have this $219 freed up, but I'm still not sure what to do with it. Sure, I'm planning to divert some of it to retirement and some of it to general savings (I guess that would become my emergency fund), but I don't have a "big thing" in mind that I'll save for next ... and that stresses me out.

Instead of holding on to my student loans as a totem from a past I felt comfortable in, I'm going to have to start looking at the unfamiliar as inviting, and the foreign as an opportunity. I'll get there, but it won't be easy.

But then again, what about growing up ever is?

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I consider myself really blessed after reading this article. We built a brand new home when I was 24. It took a lot of hard work like waiting on tables, housecleaning, being a nanny, etc. I didn't take out any college loans or anything like that when I was your age. Now my home is worth 300,000k, it's just about paid off, and I went to college while taking in roommates to cover the small mortgage payment after the home. I guess it must be better to get a home first, then take in roommates and then go to college. I got a partial scholarship for college since I had work experience and am almost done paying off the student loan. You sound like you got so many financial pressures going on at such a young age. I'm glad I got my home first. Even my friends who went to college with masters' degrees tell me I did something that was so outside-the-box that it was kind of mind blowing. They're paying over 2k a month on their mortgage but mine was only $430 a month for even a nicer home! And my roommates foot the bill! :) I bought when home prices were dirt cheap and put 35% down. I never got burdened with debt like that. I can't imagine the pressure you must have been under. It's easier to take in roommates and make them pay for everything! I did the right thing. You just have to find the right ones that don't get on your nerves, and then you're all set!

January 03 2015 at 4:06 PM Report abuse +1 rate up rate down Reply
Fred Jackson

Hello everybody,

I am Mrs Mary Tony,currently living in New jersey city,USA.I am a widow at the moment with three kids and i was stuck in a financial situation by Feb 2013 and i needed to refinance and pay my bills.I tried seeking loans from various loan firms both private and corporate but never with success,and most banks declined my credit.But as God would have it,i was introduced to a man of God a private loan lender by name Mr Sam Cole who gave me a loan of $100,000USD and today am a business owner and my kids are doing well at the moment.So dear,if you must contact any firm with reference to securing a loan with low interest rate of 3% and better repayment plans and schedule,please contact Mr Sam Cole .He doesn’t know that am doing this but am so happy now and i decided to let people know more about him and also i want God to bless him more.You can contact him through his email

He has done it before and he is going to do it for you please don’t doubt anything he says anything he ask you to do just do it and I swear you will never regret it.

March 13 2014 at 5:18 PM Report abuse rate up rate down Reply

She lost me at debt free!

March 12 2014 at 8:17 AM Report abuse rate up rate down Reply
Socho Ekon

I forgot this is a teacher that serves as a role model to kids... When I was a kid my teachers displayed a poor work ethic and complained all the time... Now everyone displays a poor work ethic and complains all the time.... It is teachers like this that help pump out millions of morons from our public schools every year.. This teacher should be displaying what being smart with money looks like to kids so they grow up and be smart with their money.... Teachers probably get paid very well and just have no idea how to manage it.

March 12 2014 at 1:11 AM Report abuse rate up rate down Reply
1 reply to Socho Ekon's comment

I've noticed that some people don't even know what the words "work ethic" means. It means getting up early in the morning and taking two buses or riding a bike to work, in the heat, and then cleaning a house or waiting on tables. And then you take two buses or ride a bike back home, in the heat. I did it, but it was worth it. Obviously, I don't need to do it anymore, but very few people can pull that off. At least I have a lot to show for it. Paid for a beautiful home and a really gorgeous sports car when I was that age. We didn't even have the Internet back then. I can't imagine all the extra money I could have made had that been available when I was a young adult. Too bad most people don't mirror that kind of work ethic anymore. They think it's easier to collect from the government. But relying on other people and the government will hurt you in the long run. My goal has always to be financially independent, and I started out at a very young age pursuing that goal, even if it meant hard work! :)

January 03 2015 at 4:18 PM Report abuse rate up rate down Reply
Socho Ekon

To quote Charlie Munger.... "There are worse things than sitting on a pile of cash"... My wife was talking to the wife of someone I know who makes twice as much as we do as the city's street's manager. She was saying they cannot afford to buy girl scout cookies. I had to laugh. They bought too much house, he drives a very expensive car to work and then drives a city vehicle all day. Those $250,000 a year numbnuts would spend a million dollars a year and still be broke. Yet this man is in charge of running the city's street's budget. Is it me or should being able to prove that you can manage money be a pre-requisite for any job that has to manage money in any way shape or form in the public sector. I also know a school principal that had to sell her $250,000 home and move into an apartment before the bank foreclosed on her. I know a union worker and his wife is a GM of a pizza joint. They rake in over $100,000 a year, live in a $40,000 house, drive 10 year old cars, and have zero money because they smoke weed, drink, smoke cigarettes, and piss away money on the newest electronics and other crap. It seems that most people in this world have no idea how to turn a profit with their personal finances yet are in positions of employment where they are supposed to be fiscally responsible. The picture of American government and schools are starting to come into view... Morons that know how to speak in public but have no idea how to live within their means. I am so glad I am a cash person and do not complicate life by making my purchases through one or two lines of credit. Scared of saving money... what a laugh. How can you screw up saving money by letting it collect in a bank till you can buy a good stock or a bond ? If you need credit after that, it is called a portfolio loan. I even paid cash for my homes... When you take out a home mortgage, you wind up paying back 65% on top of what you borrowed... Man, people are stupid.

March 12 2014 at 1:09 AM Report abuse rate up rate down Reply

Try putting away 2+ years of living expenses in cash and cash equivalents.

When you start having real choices, you may find there is something you genuinely want to do.

March 12 2014 at 1:01 AM Report abuse rate up rate down Reply

This woman is nuts. Worried about being debt free? She should cherish it, celebrate it. But she hasn't quite figured out that no one is ever really debt free. You have to live somewhere. That means, you pay rent or a mortgage, pay utilities, a car loan, pay for food, clothes, etc. Become unemployed for just a few months and you'll see just how debt free you truly are.

March 11 2014 at 9:48 PM Report abuse +1 rate up rate down Reply
Hey Emily

Good Luck.

March 11 2014 at 8:28 PM Report abuse rate up rate down Reply

Worried about NOT being in debt?
What is wrong with you - do what you want to in life, and quit following some societal model. If you are debt-free, you are the lucky one.
Celebrate it.

March 11 2014 at 8:19 PM Report abuse rate up rate down Reply

I would recommend to save some of the money and spend some. If your school has a pension retirement plan, then always put in the most that your school will match, if they do matches. If you can, some of the money should also go into a savings account. You might want to bank all the money for six months so that you develop a financial cushion.

Determine where your strongest material passions are. If you have a strong desire to travel, then it is best to do it while young. Many of us face physical limitations when we get older, and then we are limited in terms of where we can travel. If there is a particular material item that you want, then maybe you should consider buying it if it will make you happy.

March 11 2014 at 8:01 PM Report abuse rate up rate down Reply