5 things I wish I could tell my 21-year-old self about taking out student loans

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• After graduating from college nearly debt-free, I took out over $60,000 of student loans for graduate school.
• At the time, I felt a lot of shame around taking out loans, and because of that I didn't make a plan to deal with them.
• If I could give my former self some advice, it would be that it's OK to take out loans, but you need a plan - and that unless you grow your income, frugality can only go so far.
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When I graduated from undergrad, I had little student loan debt thanks to my parents, who paid for all of my tuition at a public university and most of my living expenses. I paid off the small amount, around $5,000, with an AmeriCorps award. 

But then, at age 24, I was dissatisfied with the job market and I decided to go back to graduate school. An admissions counselor told me that student loans were the "easiest" kinds of loans to get, and she was right. 

For three years I took out the maximum amount of federal loans and, very easily, wound up in $61,500 of loan debt that I am now paying off at age 29.

While I don't consider any of my choices to be a "mistake," if I could go back and talk to my earlier self about taking out and paying student loans, here is what I would say:

It's OK to take out student loans

This might be a no-brainer for some, but I definitely wish someone had told me this outright. Because I assumed it was "bad" to take out loans, I did so in secret, with a lot of fear and shame. I told myself I would pay them off down the road, but my anxiety was through the roof.

Because I was too ashamed to acknowledge my decisions, I lived in denial the whole time I was living off loans. What did that mean? I was not making a plan for what to do about them.

I've finally gotten over my shame and talk openly about my loans with my partner, but it still makes me uncomfortable. That's why I would eliminate the emotional roller coaster altogether and tell my 24-year old self "It's okay …"

... BUT you need to have a plan

It's far better to know your payoff plan before you take out loans, asking things like, "What will my return on investment be?" And, "What kind of salary will these loans allow me to make?" Viewing loans as in investment towards a better outcome is much better strategy than using them to buy time while you figure it out. Intentionality is key.

If you're broke while taking out loans, at least find some way to start building money habits

Student loans can embed you in the cycle of scarcity, and when your surplus checks come in twice a year it's natural to want to indulge. Instead of spending the surplus money as it comes, set up systems of set-asides and practice budgeting regular amounts each month or biweekly like you would a paycheck. 

You can write off student loan interest on your taxes

Because of my postgraduate studies, I've been able to deduct my payments on loan interest every year I've made payments. This is nice, and it makes my payments hurt less. Now that my long-term financial health is my first priority, I'm planning to save and/or invest what I get back on my return from my student loan interest deduction.

Unless you find a way to grow your income, frugality is only going to help so much

When I first graduated with loan debt, I felt so much shame that I focused 100% on being frugal. I thought I didn't deserve anything nice. I wore clothes from Goodwill, cut my own hair, and worked a part-time job at a restaurant to save on groceries.

Then, I realized it would take more than frugality to pay off my loans. A lightbulb went off, and I started focusing on building my income. Since that day, I've learned to negotiate my salary during job interviews and never settle for less. I started a side hustle that has added even more to my monthly income. If a loan was meant to increase your value in the job market, it's best to act like it. This means knowing your worth and being prepared to ask for it.

Student loans can feel debilitating, but they don't have to. Most millennials make the decision to take out loans early in life but don't navigate the consequences until much later. No matter what, try to quiet shame, secrecy, and fear and ask concrete questions about how to make the most out of your education. As with everything in life, there are drawbacks and benefits. Try to make the benefits work to your advantage, and do what you can to deal with and move past the downsides.

• Read more on student loans:
• How to choose a student loan to get the money you need for college or grad school
• The 4 types of financial aid, ranked from most to least desirable
• How to consolidate your student loans to lower your interest rate and make a single payment every month
• How to defer student loans to pause your payments for months or years at a time

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