Going to grad school was the best thing I've ever done for my money, but taking out $33,000 of loans to do it was the worst
- I consider going to grad school to be the best thing I've ever done for my money - but I can't say the same about the $33,000 in loans I took out to do it.
- I did everything wrong, financially: I didn't save money while I was in school, I didn't wait to enroll until I had some savings, and I went into forbearance ... twice.
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To clarify, I've never regretted going to graduate school for my journalism master's degree. What I do regret is taking on $33,631 of federal school loans to do it.
Financially, I did everything wrong: To start, I wasted the 14 interest-free months when I was in school by not saving anything towards my hefty bill, as well as the six-month grace period after graduation.
I should have waited another year to enrollIf I could do things differently, I would have waited another year to enroll after making the decision to go back to school. When I started classes, I didn't have anything saved because it was a pretty spur-of-the-moment decision.
Therefore, after getting all the information about what it would cost to go back to school, I should have taken a breath and paused to think of all the cons of waiting another year to enroll. If I had waited another year, I could have used that time to save $200 a month. (At the time, I wasn't paid much at my job, but I could have at least stopped being a shopaholic, if nothing else.) In addition to that $2,400 savings, I should have continued to save $200 a month during my 14-month program, adding $2,800 to the pile, plus an extra $1,200 during the six months after graduation. That would have added up to $6,400.
If I had saved up $6,400, I would have lowered the balance from $33,631 to $27,231. That would have significantly lessened the power of my 6.8% interest rate and decreased my payment by hundreds of dollars a month.
Though that doesn't sound like much of a dent against $33,000, here's a little perspective to show why that would have helped enormously. Since graduating nearly seven years ago, I've only paid off $3,257.70 total. That's only $465.39 per year. Ouch.
I should have stayed out of forbearance
In addition to the savage interest compounding, I've also made the massive mistake of going into forbearance. Twice.
The first time was because I was laid off and had no other option. That's when I went into forbearance for a year while I got back on my feet and searched for my next job. Unfortunately, instead of making payments when I got a job, I decided to stay in forbearance for the full year I was given. When you're in forbearance, you don't have to make your payments, but your interest continues to accrue - meaning you come back to a higher loan balance than ever.A year and a half later, I went into forbearance for a second time, which lasted for five months because I didn't make my grad school loans a priority. I missed two payments, which added up to $884.30, and when you factor in other bills like rent, credit card debt, and more, what I owed felt too big.
I should have made bigger payments and looked for scholarships
After that ended, my request to qualify for income-based repayment was granted, and in June, my payments went from the previous amount of $442.15 to $252.21. I really regret not keeping it in the $400 range, because since cutting my payments in half, I've diminished my progress towards paying off my school debt.
Another easy way to have saved money would have been to search for scholarships. Even though it was a private school, I could still have spent a week or more searching for possibilities. Research costs nothing, and often yields lucrative results.
I still don't regret my degree - but I could have done the money side better
Despite all of that, I have a hard time saying that I regret going back to school. The act of furthering my education through Full Sail's New Media Journalism online program was one of the single best decisions that set me on a path to toward a better career and life. When I applied, I was in a fairly low-paying job, and just wanted a way out of my current circumstances. I knew that something drastic like attending grad school would change things for the better.
And, as I hoped, my career and quality of life have vastly improved. This was officially confirmed when one of my former bosses at a job I loved told me they had hired me in part because of my master's degree.
Career and personal improvement-wise, going to grad school was the best decision of my life. Just not the best financial one.