Staring Down Our Student Loans

I used to be horrible with money. Like, really, really bad with money. When I say “horrible,” I mean I once blew 6 months of rent money in college on.. what, food?

I can’t even remember what I bought, but I do remember the trouble I got into when, after 6 months, my sister (whom I was rooming with at the time) asked where my half of the year’s rent was. Now that I reflect back on it, I think that was a breaking point in her and my relationship, but perhaps that’s for another blog post altogether. Back to Dave being complete garbage with money. I sucked at it for a very long time, and it often was the source of stress in my marriage.

 

I don’t wanna grow up, I’m a USMC kid

I grew up the son of a career Marine. I was born in Hawaii and then lived in San Diego before my father retired and we moved to North Carolina. After the military, my dad had an entire second career with the USPS that often found him working 3rd shift and overtime for the bonus pay. My mother did many things including being a stay-at-home mom until I started school, and then on to substitute teaching before landing on bookkeeping for the Salvation Army after my dad’s retirement from the military. 

If we were ever tight on money, that stress never filtered down to me.

Growing up, we were never broke, but if we were ever tight on money, that stress never filtered down far enough to have any impact on me. Don’t misunderstand: we never had a lot of money, ever. My mother bought bagged cereal and I was well into high school before I ever got my first name-brand pair of shoes (thanks, Chuck Taylor). We almost never went out to eat, and I clearly remember numerous home-cooked dinners of spaghetti, Chow Mien, or cold cuts with plenty of bologna and straight up, boxed government cheese. I never had the latest toy or gadget, but even knowing we weren’t “rich,” I never went without what I really needed.

As my sisters grew older and started to drive, they would inevitably inherit whatever family car was the least precious and we’d adopt a new vehicle into the household. The cars were never actual gifts, and they remained the family’s vehicle, but it was understood that this Nova was Lisa’s, this Fairmont became Beth’s (is that right?), and this Oldsmobile wagon was Karen’s. I eventually inherited a big Ram van. Sexy… mmmm. But as a drummer, I appreciated the cargo room! All this to say, as a family, what was truly needed was usually provided for. It’s just that as a kid, I never understood how this was manifested, only that it just kind of… happened.

I never had any kind of money talk with my folks. I did have a savings account when I still lived at home, and I think I remember getting a dinky checking account in high school to handle my part-time job money, but I was never taught money management. All I knew is, we don’t have a lot of money, but we’ll always make it. To be clear, I’m not placing my relationship with money at my parent’s feet, here – I had no desire to learn!

 

Let’s saddle kids with a lifetime of debt!

My horrible relationship with money carried into college. My parents weren’t able to give any money towards my college, but they made too much money themselves so their income disqualified me from any government assistance beyond a few student loan programs thanks to the “expected family contribution” &#^@*!.  So, I took out every nickel of student loan money they’d give me. This covered all my college expenses including tuition, books, food, and the aforementioned rent. I wasn’t truly prepared for the responsibility of having thousands of dollars in my bank account just sitting there.

I took out every nickel of student loan money they’d give me.

I didn’t have the first inkling of self-control to manage that money, and because things just worked out when we were growing up, I just kind of assumed it would just, ya know – work out this time too. You can insert your own shrug gif or emoji here. All I know is that I signed whatever promissory note they put in front of me, not even attempting to grasp the weight of the debt I was piling on – a debt that, to this day, I am still saddled with to the tune of $127,549.40. Yes, I just checked. 

While we’re at it, let’s go ahead and pile on a ton of credit card debt since you’re still in college! Yeah!

Hey, they’re giving away MasterCards outside of the food court, and.. say what?! I get a free hat if I join now?! Where do I sign up! Mortgages and car loans are for grown-ups!!

Seriously, this practice should be illegal. It may be by now, but in the mid-90’s, credit card companies were literally lined up on campus giving credit cards away. There was no credit counseling. There were little, if any, credit checks. They just wanted to get you on the hook with their $300 limit cards while you were in the most carefree part of your life. I guess they figured, “hey, you’re in college so you’ll get a job to pay it back. What? You’re a music major? Uhhhh.. free beer coozy?”

 

The Sword of Damocles

By the time I washed out of college (note: I later finished and went on to complete my masters, but that’s a different story), I had amassed thousands upon thousands of dollars of both student loan and credit card debt. Shannon was in a very similar situation and our credit scores were all completely torched. We couldn’t get a line of credit or a loan if our lives depended on it. Every trip to the mailbox became an event filled with dread, and we had completely stopped answering the phone out of fear of having to talk to any number of pursing creditors. Every apartment, banking, or job application was underscored with the looming threat our terrible credit rating represented. It was a miserable time, and while I hated myself for having gotten into such a hole, I was able to tuck the stress away and go about my oblivious existence not really considering the long-term ramifications.

We couldn’t get a line of credit or a loan if our lives depended on it!

When Shannon’s car finally gave up the ghost, I approached my father and begged him to help us out, and he finally agreed to co-sign a loan for a car. Looking back, I can see that this was a turning point on my evolution into adulthood and taking responsibility for myself, because I certainly wouldn’t have co-signed that loan for me – my track record was garbage!

Because I knew he’d be on the hook for the money and I could not allow my crap decisions to trash their credit, we never missed a payment on the loan. I can my turn own credit score to garbage, but I’ll be damned if I’ll do the same to his. This loan proved to be the last financial assistance I ever asked from my parents, and I was determined not to have to be in that position ever again.

Over the course of 10 years we slowly began to claw out from under the weight of all of the credit card debt. First, we stopped opening up new credit cards and then worked to get current on all the outstanding balances. This meant some calls to the credit card companies, but they seemed more than eager to work with me. Yes, it was tens of thousands of dollars in outstanding credit card debt, but by just making the monthly minimums, at least I could start answering the phone. Even after having done all that, I still found myself ignoring the largest sword looming just over my neck: the now decades old and nearly defaulted student loans. 

 

The Turning Point

It was the prospect of buying our first house that forced Shannon and I to come to terms with our student loans (suffice it to say, she was in as deep a hole as I was). Although we’d worked to get current on all of our other debt, the student loans were still demolishing our credit like a sledgehammer through sheetrock. No amount of credit card rehabilitation could outmaneuver the wrecking ball that was nearly a quarter million dollars of narrowly defaulting government loans. Wanting to buy a house forced us reconcile this part of our past and meant we had to stare down this behemoth without blinking. The good news is, this was in 2003 on the windward side of the housing crisis, so banks were pretty much handing out loans to anyone with a pulse.

Even still, we could no longer dodge the loan monster. Amazingly, working with the student loan people was pretty great. Like the credit card companies, they were more than happy to work with us and help get us on track. I discovered that the student loan people weren’t evil and weren’t out to take all my money. The people on the other end of the phone were human beings who were doing the best with whatever situation they were confronting. As it turns out, if you start the conversation by saying, “Hi! I know I screwed up and I want to work to make it right,” they’re pretty darn accommodating! They pointed us to several programs that fit our budget and got us onto a payment schedule we could acutally make work.

If you start the conversation by saying, ‘Hi! I know I screwed up,’ they’re pretty darn accommodating!

We were able to make arrangements with the student loan people, clean things up, and get into a little house on Purple Leaf Lane. To this day, I’m still shocked that a couple like us were able to secure a mortgage with our shredded credit and zero money for a down payment. What could possible go wrong with that mentality, banks? /sarcasm. That said, we never, ever missed a payment. Yes, we lost nearly $40k in equity and ended up short-selling in 2011, but that was Freddie and Fannie’s fault, not ours!

I will say that the student loan industry does need reform. The price of college is astronomical and only getting more expensive every year. The commodification of education leads to some pretty shady practices that have historically been not cool, but that’s a discussion for another time or even another blog.

 

 

The Takeaway

What was important for me to understand was that once I stopped blaming everyone else for my inability to handle money (my parents, the tax code, predatory credit card companies) and took responsibility for my part in the situation, I found what I really needed: the ability to not allow the debt to control me, but for me to control my debt. More importantly, I found that even more freeing than being able to answer the phone or check the mail is knowing that although we’re not yet debt free, we’re no longer living in fear.

Dave was born in Hawaii, grew up in San Diego, and wound up in Orlando, FL by way of both High Point, NC and Memphis, TN.

He is a husband of 24 years to his wife, Shannon, and is a crazy cat dad. When he’s not rambling on about life here, he can be found writing music for film and TV, playing music, or teaching music at Full Sail University.

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