Community Manager
Community Manager
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College Loan Confessions from a CERTIFIED FINANCIAL PLANNER®


As a young man from a rural, middle-class family, I was determined to earn a college degree and to make my way in the world as a professional. My parents had strongly equipped me with the skills to work hard, and they instilled in me the value of an education. But they weren’t able to contribute as much money to my college education as they would have liked.


After paying as much as I could of my tuition with money I made waiting tables at night, each semester I’d take a student loan to pay the rest and give myself a “cushion.” Every time I collected my student loan check, I felt like I had cash in the bank. It didn’t feel like I was borrowing to buy pizza, beer, an awesome “razor” flip phone (rad, I know), and all the things a college-age student needs — and thinks he needs.


When graduation rolled around, I had $26,000 in student debt and tacked on another $8,000 for a master’s degree several years later when I changed careers. Today, 11 years later at age 36, my wife and I are finally celebrating paying these suckers off. That’s some dang expensive, and long-lived, pizza bills.


Pros and cons of student loans

In general, I don’t hate on student loans. They helped me go from fairly humble beginnings to working as an Advice Director for a Fortune 100 company. Loans are seductive, though. You feel like you’re spending in the moment, but you’re really spending years of your 20s and early 30s.


If loans had not been as easy to get, I think I would have been a bit more creative, finding ways to cut costs, make more money through scholarships and grants, or choosing a cheaper school. There are lots of ways to financially supplement an education that don’t leverage so much of your future.


As a CERTIFIED FINANCIAL PLANNER® and financial advice expert for USAA, I’ve had rigorous study, training and testing — on top of helping thousands of people with their finances. I’ve guided people through retirement investing, college savings and debt repayment, among other things.


In my experience, people make tradeoffs in their financial lives that make sense at the time. Often it’s a decision of long-term versus short-term, certainty versus risk, expensive now versus expensive later. What pains me is seeing people make tradeoffs without really understanding the price they are paying.  When I borrowed money for my student loans, I felt a bit trapped. I had invested years and sweat in my education, so I had to finish it. I thought, “I can’t pay for it on my own,” so I borrowed.


What I would tell my college-bound self

When I took out those loans, I didn’t realize how long it would take to repay them, and the difference it would have made if each semester I’d borrowed $1,000 less than the full loan offered. As a numbers nerd, I’ve since done the math to estimate; I would have paid it off around 3 years earlier.*


If I could step into a time machine and share what I know now with my 18-year-old self, I’d impart this advice and experience:


Know the real cost of borrowing. Before you take out a loan, look for ways to borrow less. Don’t just borrow the full amount “in case you need it.”   


Choose your school wisely. Schools vary dramatically in price, but the salary you earn from the degree doesn’t vary as much from school to school. Don’t get overwhelmed by big names or dazzling campuses.  


Get creative with housing costs. I once had a buddy who worked as an informal property manager for a multiple-room rental house. His job was to keep roommates in the house and coordinate any repairs or other needs for the landlord. He got a sweet rate on his housing. Find creative ways to live.


adv_advice-family-getcollegeaid_img.jpgKeep looking for help. With the nudging of their parents and the help of guidance counselors, high school seniors are pretty good at applying for scholarships and grants. Don’t get lazy once you’re in college. There are plenty of student loans out there that will help supplement your remaining college years, but turn to them as a last resort.


Pursue paid internships. Certainly, there are life lessons to be learned from working at a restaurant, but look for experiences that will also add value to your education. Ask your advisor about paid internships, which in many cases pay pretty well for a college-age person.


For more information on education planning, please vision our Investments and Education section of the USAA community.


For more tools & resources on budgeting, saving, and paying down debt, visit this Financial Toolkit page.


Disclosures: Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.


*Estimated 3.3 year faster debt payoff - Assumed 5.7% interest rate, 348 per month payment

34,000 initial balance - payoff 11 Years (132 months). 26,000 initial balance – payoff 7.6 years (92 months)


DID# 254520 – 0718

Occasional Visitor

I have a question about this myself. I must confess my loan is MUCH higher and I hope to get a PhD soon. This year my husband and I plan to pay off all CC debt and one of 2 vehicles that have a loan. We are hoping to look into buying a home in the next few years but want to be in a better place to do so. My fear is that my student loans will effect our mortgage loan or chances of one. I am already 34 and have made little to no payments on it. A friend bought a house last year and she reported that because she was in school and her loans would be in deferment/forbarence that they did not count when they calculated her eligiability for her mortgage. Is this accurate and what would your advice be?

Community Manager
Community Manager


I applaud the efforts to pay down the credit card and one of the car loans!  This should help free up some money monthly and give you some more options. 


If you have a deferred student loan, it depends on the type of home loan you are trying to get as to how it “counts” toward qualifying.  My advice to you on this front is to contact a qualified mortgage loan officer to help review the options on different types of loans, as it can be complex. When mortgage lenders determine how much you can afford, they will look at several factors, but lets talk about two: your total monthly income and your minimum monthly debt payments. These two are compared to each other to determine your debt to income ratio. The type of loan determines what is included in the debt portion of the ratio. 


  • If you are looking at a conventional mortgage, a deferred loan normally will be counted debt when you apply for a mortgage.
  • Some loans, like the FHA loan, have more loose definitions on what applies as debt, meaning deferring the loan may help.


If you want to be in a better place to qualify for the home loan in the next few years, do a couple of things now:


  1. Grow your income and pay off debt balances this improves your debt to income ratio.
  2. Pay bills on time and keep an eye on your credit report, contesting any errors on it – both can improve your credit score over time, another thing lenders look at.
  3. Save money for both emergencies and a healthy down payment.  In addition to the amount you put down, lenders will look at the assets you hold in savings and other investments to determine if they loan you the money.  Having cash set aside beyond what’s needed to buy the home makes you a lower risk.


I hope this helps, and good luck!