My history with obtaining and paying back student loans is a success story. I received my undergraduate engineering degree from the Colorado School of Mines without owing anything (see note at the end of this article). My school debt came five years later when I returned to school to obtain a master’s degree from Colorado State University (a.k.a. CSU). During my two years of engineering graduate studies, I accumulated $17,000 worth of debt. It would have been $34,000 had I not been fortunate enough to receive a sponsorship by a generous company during my second year of study; the company paid my tuition, a $1200 monthly stipend, and gave a generous donation to the school in exchange for research work performed by myself and my advisor’s research team.
I started working full-time, in my field of study, before I officially graduated from CSU with my master’s degree. This gave me a few extra months before I had to start paying off my school loans. My loans were administered through Nelnet. Nelnet provided me with several payment options. I chose their standard repayment plan. This plan commits you to paying constant amount payments over an agreed upon time period. Initially this plan committed me to paying $124 a month for 10 years. After a couple years of paying off the school loans, I noticed that interest rates had gone down significantly since I had set up my school loan repayment plan. Thus I worked with Nelnet to reorganize my debt repayment plan. I secured a 3 percent interest rate on my loan and refinanced out to 10 years. This brought my monthly payment commitment down to $70 a month. With a 3 percent interest rate, paying off the school loans is a low priority in comparison to putting extra money towards outstanding credit card payments. Still, when I have extra money and no outstanding credit card bills, I put the money toward the school loan. Now the balance of my school loan is down to $2500 and my next required payment isn’t until September of 2014. With good fortune, the loan will be paid off before this next required payment is due.
Note: Getting out of the Colorado School of Mines (a.k.a. CSM) without student debt was a result of attending a financially supportive school that is funded largely by private industry and alumni, being lucky enough to obtain a job as a resident assistant which provided room and board, and qualifying for a Pell grant. Some of my fellow CSM graduates also got out without owing money. Some of the methods they used to obtain this goal were to: participate in ROTC programs, obtain their first two years of core classes at a community college, and living at home and commuting to school.