Apr
I just made my first voluntary student loan payment of $800. That $800 was meant to be an ipod for The Boy, a couple trips to snowplanet, and probably spending money when I’m in Melbourne. Sigh.
See, New Zealand has this great scheme at the moment. They are quite happy to give anyone a loan if they are enrolled at a qualified tertiary education facility. They are also quite happy to give you $150 a week, if you are enrolled full time. They also have this great thing where if you stay in New Zealand, they won’t charge you interest on this loan. Great! Fantastic for getting people qualified!
So you do what I did, and you meander through your degree, and graduate. And then you start another degree, and decide half way through that you disagree with what you are being taught (because apparently common sense isn’t part of ECE anymore) and so you leave and get a real job. The minimum repayments came out of my wages every month and I never really worried about it. Or noticed it. Or cared in anyway about it.
Until I discovered that if I only paid the minimum repayments it would take me 19 years 10 months to pay off the entire loan.
Colour me gobsmacked that I’m in this much debt because when I was 18 I took that $150 a week and drank it. Like a fish. Because my social life dictated I do so.
The problem is that I don’t WANT to stay in New Zealand for the next 19 years. I wish to live elsewhere at some point. Party hard in London Town. Ride the back bowls in Switzerland. Eat waffles and fried chicken in New York! If I leave New Zealand for more than 6 months I get charged interest. And that interest is NOT pretty! A friend who came back home to visit said that for the last six months he got charged $4000+ in interest on his Student Loan. FOUR GRAND!
Then I worked out that if I voluntarily pay an extra $800 a month I could be debt free in 4 and a half years. This includes the OTHER great goverment scheme which pays an extra 10% on top of your repayments if you voluntarily pay back more than $500 a year.
Lucky for me I’m not paying rent at the moment, and can afford to live AND pay back this ginormous loan. Probably not for the entire 4 and a half years (I refuse to be living at home that whole time) but enough to make a serious dent in it.
So, advice to all those 18 year olds wanting to live it up large on the governments money. DO NOT DO IT! Don’t get sucked in. I am paying for all those years now, supporting my younger self and it is fucking painful! Yes, get qualified. But borrow only what you have to to cover the course costs. Do not borrow the money to socialise. Do not borrow the money to go on snow trips. Do not borrow the money so you can buy that sweet $300 hoodie because ‘its The Shit’.
Students are meant to be poor. People with full time jobs? Not meant to be poor. It appears I did the inverse, and handing over that $800 today? Super. Super. Super. Painful.
Being debt free though? Totally worth it.
Sounds like you’re doing a good job of making some difficult financial decisions. Debt is definitely not something to keep around. I’m lucky not to have any student loans, but my husband has enough for the two of us, and when he finally graduates this year, we’re going to have to start paying that off. I look forward to the day we are completely debt-free. :-)
@Juliet – yeah, being debt free would be fantastic. I just wish getting there wasn’t as painful as it is!
I hear ya. I’m going to be paying for my University education for YEARS. But it was worth it — I loved what I took.
I feel you on the student loans. I know that it’s only a couple more years, but sometimes I get the statement and it feels like we’re going to be crushed with student loans for the next fifty years. Education is worth it, of course, but it will never cease to amaze me how information widely available in libraries can cost SO. MUCH. MONEY. if you want proof that you read the books.
@Desiree – I know, totally worth it. It just seems a bit heavier to handle than I thought it was going to be!
@Sarah – I totally agree!! While the piece of paper is super valuable (I know that mine got me my current job, without a doubt) but sometimes the piece of paper doesn’t guarantee the skills, you know? And paying out such large repayments, even if only for a few years, still isn’t easy. I’ll be so glad when I’m debt free!
Oh, well my student loan is horrendous too last I checked – but that IS interesting about the 10% extra from the govt thingy!! Thanks for the tip!