Graduate Archives - Frugaling

You can’t imagine how terrible student loan debt is until you are faced with the bill — for the next 20 years of your life. This was my predicament 5 years ago, after I graduated from pharmacy school with about $220,000 of student loan debt.

I know what you are thinking, “But Christa, that number is outrageous!” Trust me, I know! About $30,000 of my student loans was from undergrad and the rest from pharmacy school. I would love to tell you that I only took out the minimum amount of loans to get by, ate ramen for every meal, and delivered pizzas 8 days a week, but I didn’t. I lived like most college students do without much of a budget. I wasn’t really thinking about my future self having to pay it all back with interest.

The 18-year-old student loan decisions have serious consequences

There is a lack of education concerning student loan debt among colleges. As a student, you are not usually educated about the repercussions of getting yourself into massive student loan debt. You make shortsighted financial decisions that can adversely affect your life for years and years.

Some of the student loan debt is because you are giving “free money” to a bunch of stupid teenagers (I can say this because I was one!). Some of the debt is also because tuition costs have skyrocketed. For instance, the pharmacy school I attended now costs $33,990 a year. This equals $135,960 in tuition for pharmacy school! That doesn’t even include undergraduate costs or costs of living.

Many post-graduate/professional degrees require this significant student loan burden

Many graduate degrees cost hundreds of thousands of dollars. How can anyone possibly afford this? Many need significant student loans and financial aid. I took student loans out because they were necessary for my dream job as a pharmacist. After pharmacy school, I was told that I’d pay for the next 20 years. My student loans cost more than the mortgage on my house!

I’m not the only person in this situation. Some have gotten into debt from graduate school and others have gotten into major student loan debt from undergrad alone. Fortunately, in 2007, the government started the Public Service Loan Forgiveness (PSLF) program.

The PSLF program is for those working for the government or in the public service sector. If you find a job in one of these areas and make on-time, scheduled monthly payments for 10 years, your remaining loans will be forgiven. But there are some important caveats and rules to look out for.

Confusing, right? Trust me, it does seem complicated when you are first starting out. Some people will start to look into it, get stuck, and forget about it. Lucky for you, I’m here to help!

Fundamentals of the PSLF program

What type of job do I need?

Qualifying employment includes:

Those who work for the government (ex- military, public libraries, police officers)
Those who work for public service non-profit company with a tax exemption code of 501(c)(3)

Tip: You can call human resources or even check your companies website for their tax exemption code.

Which type of student loans qualify?

Federal loans that were received under the Federal Direct Loan Program.

If you have student loans under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, you can consolidate them into the Direct Loan program in order for those loans to be eligible.

Note: Private student loans are not eligible.

What repayment programs do I need to be on?

Income Based Repayment (IBR)
Income-Contingent Repayment (ICR)
Pay As You Earn Repayment Plan
10-year repayment plan (this is kind of silly since you would have nothing to forgive after 10 years)

What qualifies as an on-time, scheduled monthly payment?

In order to be on-time, the payment must be made no later than 15 days after the due date.

For the payments to count, scheduled monthly payments should be in active repayment status. You can’t be in a grace period, forbearance, and/or deferment.

Object Wealth Christa — *Christa from Object Wealth*

Where can I find out more?

You can go to the Federal Student Aid website. They have a bunch of information regarding student loans.

You can also come visit me on my site where I talk about all things personal finance, including my step-by-step guide to the Public Service Loan Forgiveness program.

This is a guest post from Christa, the founder of ObjectWealth.com, a blog on personal finance and her journey to go from massive debt to building financial independence. She is also a hospital pharmacist and loves watching Game of Thrones (even though it gives her nightmares).

Entrepreneurial Google Founders Wikipedia Photo — The Google Founders. Photo: Wikipedia

My first year of writing is nearly complete. In starting my own online site and business, I realized a few entrepreneurial secrets that aided in the success and development of Frugaling.org. Hopefully, some of these ideas inspire you to make more and take advantage of any downtime you have to achieve your own entrepreneurial dreams!

A fun alternative to a temp job

Finding time for extra income opportunities was daunting last year. I wanted to make and save more money to pay off an overwhelming amount of student loans. I was rapidly approaching $40,000 in total debt last May. I thought about getting a menial job that paid me about $8 an hour after taxes. I scoured Craigslist for random temp jobs, but grew hopeless as the opportunities didn’t often fit within the parameters of my challenging semesters. The debt was unmanageable.

Sometime in mid-July, Frugaling.org became a real second income for me. My advertising revenue and traffic skyrocketed. I felt a rush when I published articles that would get read by 10, 100, 1000, and eventually by up to 10,000+ people at a time. But the excitement was heightened because I knew this would perfectly sync with my busy graduate student schedule.

You make your own schedule

Here and there, I began to work on the site. I’d type a story between classes or when I finished work for the night. In a fleet of passion through my fingers, I’d hammer out intricate articles that were entirely my own desire. As much as I wanted to share my voice with others, I was writing for my own growth, too.

Unlike the Craigslist opportunities or strange side jobs around my college campus, writing online and becoming entrepreneurial allowed me even greater freedom in money-making endeavors. It was far easier to squeeze an hour of work where I could fit it, then worry about someone else’s overlapping or differing schedule. Frankly, it was empowering.

Entrepreneurial success is often predicated on fall back options

Graduate school, work, and my other job account for about 60 to 70 hours of work per week. At times, it was hard to digest how many hours were dedicated to my education. Until this academic year, I considered myself to be lazy. I didn’t want to work all that hard and found any opportunity to waste time.

By creating an outlet for my thoughts and conveniently forming it around my schedule, I kept my prior obligations while starting a new project. My grades and school experience hardly changed; actually, I was more diversified and felt grounded in life because of my entrepreneurial spirit.

Starting a business takes a certain gusto and risk, but having options helped insure against failure. If Frugaling didn’t work out, that would be okay. This wasn’t the only business venture going for me, and I wasn’t putting all my eggs in one basket. The failure of this would simply be a drop in the larger bucket.

Follow these examples to find your own achievement

I’m not alone in starting a business while staying busy. There are a tremendous number of tech titans that took to something on the side, and it turned into their main income. Here are two examples:

Drew Houston, CEO of Dropbox

Houston was searching for a method to avoid the constant need for a flash drive. As a graduate student at MIT, he coded a rough basis for Dropbox.com. Basically, it would allow users to place a file online, and have access anywhere in the world to that same file, as long as there was Internet. Houston met his business partner at MIT and launched the company with the safety net of getting a masters degree from a top-tier institution with massive social connections. If Dropbox had failed, he would still be hirable at some terrific institutions. If it succeeded, he would get the best of both worlds.

Mark Zuckerburg, CEO of Facebook

Zuckerburg’s story is legendary now. Through a series of startups and ideas, Mark created a site that was exclusively for Harvard students. It was originally entitled, “The Facebook.” This elite establishment became the perfect territory to foment incredible demand. From there, Zuckerburg and his partners slowly spread the idea from university to university. The elite model appealed to a variety of people, but if it had failed, he would still be getting a Harvard degree.

Defeat Massive Student Loan Debt With Public Service Loan Forgiveness (PSLF)

The 18-year-old student loan decisions have serious consequences

Many post-graduate/professional degrees require this significant student loan burden