Worst Student Loan Mistakes

I wasn't entirely smart when I took out my education loans starting back in 2000. I was working part-time as a substitute teacher, full time as a parent of 3 young children and wanted to go to school full time so I took out a little more than was necessary to offset some personal costs. The extra taken out was listed as "living allowances" and is now a huge part of my debt. I topped that mistake off with applying for deferments when I couldn't afford the payments. These two mistakes cost me thousands of dollars and a ton of headaches.

Let me start out by saying that I have no other major loans other than my car which I currently owe a tad over $11,000 on, I only have one credit card that I use only enough to keep it active and pay a whopping $25 a month on. I pay cash for everything with the mindset that if I can't afford to pay cash I don't need it. In short my education loans are the bulk of my debt by far and the only major financial mistake I have ever made.

I graduated with a BA in history and started my career as a middle school teacher. I was excited, well until my first loan payment of over $400 came due. There was no way that I could manage it. I filed for an economic hardship deferment and I would file again and again as my bills got higher but my pay mostly remained the same. The more I deferred the higher my debt would climb as the interest kept accruing.

* Original loan amount #1 = $21,402.55 outstanding principal $25,038.23

* Original loan amount #2 = $11,231.91 outstanding principal $13,604.43

I am now a 7year teacher and sitting on a 3^rd year teachers pay. There have been no raises in pay; in fact there was a bit of a pay cut as we now have to pay toward benefits that were once included and I am looking at the possibility of more cuts. I still can't afford what has now jumped to over a $500 month payment but I can no longer afford to defer these payments. I am now on the right track with getting a payment plan in place that works for my budget.

I don't regret the education that I received and don't regret the career path I chose but I do regret taking out the extra funds I didn't need and do regret not at least paying off a portion of the loan from the start.

The only good that came of this is that when my children started looking at college loans my experience helped them make some very good choices. I hope this helps you make the right choices as well.