Student Loan Solution. David Carlson

      Drowning in Student Loans

      $100,000.

      As in one hundred THOUSAND dollars! This number will always a hold a special place in my heart.

      Why, you may ask? Perhaps it’s the amount I was paid to write this book? Ah. No. It is how much my wife and I had in student loan debt when we graduated from college.

      It translated into approximately one thousand dollars a month in loan payments.

      One thousand dollars a month. At the time, we were paying a similar amount on rent. Think about what we could have done with an extra thousand dollars a month!

      One thousand dollars a month for a newly married couple. I was working as a staff accountant and my wife was a psychology major with dreams of getting her PhD. She was between undergrad and grad school, working a couple of part-time jobs as she studied for the GRE.

      My wife needed to at least obtain a master’s degree to do the work she had been dreaming of and working toward in undergrad. I was planning on getting an MBA, so I could leverage it to get a better job with higher pay, be more competitive in the marketplace, and learn new skills. But adding the cost of two master’s degrees seemed a little less attractive when we were staring one hundred thousand dollars of undergrad debt in the face.

      I played out scenarios in my head. Would an MBA even make sense? Did I even want to stay in corporate America forever? If I ever wanted to leave my corporate job to run a business, was that even an option with so much student loan debt? I struggled with this decision for years, but, in the short term, I moved on to more pressing matters: our monthly student loan payments.

      Faced with our debt, my wife and I did a number of things to improve our finances, many of which we will go over in this book. One thing in particular was the creation of a side income stream. It was my student loans that gave me the motivation to start my blog Young Adult Money in 2012. I wanted the blog, and other side income streams, to bring in enough money to cover the thousand dollars of cash flow we were losing each month to student loan payments. One thousand dollars a month was the minimum monthly payment on the standard ten-year repayment plan. Unless we put more toward our loans, we would be making those payments year after year for ten full years.

      The blog led to my first book, Hustle Away Debt, which was a comprehensive overview of side hustles, including what to do before starting one, how to pick the right one for you, and how to optimize and grow your side hustle. Side hustles dominated my life. I was always looking for new ways to make extra money or grow and scale my existing income streams.

      The focus I put on side hustles was directly due to my student loan debt. Everything points back to that one-hundred-thousand-dollar mountain of debt welcoming me to “the real world.” It was a source of stress and anxiety. Short- and long-term money decisions were made in the context of it. It may have motivated me to stick with my side hustles, but I also felt like I had to focus on them. Updating our student loan balances wasn’t typically a cause for celebration, because it didn’t feel like the balances were going down that quickly.

      Too often I’ve read blogs, articles, and books aimed at those in their twenties and thirties that fail to recognize that student loans are at the center of financial decisions for those who have them. “Just cut your expenses and pay off your loans faster” is something you may have heard. This advice is rarely caveated with the fact that, for some borrowers, student loans are such a big expense that even cutting expenses by 25 percent won’t prevent them from living from paycheck to paycheck. Nor does the advice typically mention a more helpful first step, analyzing whether an income-driven repayment plan can help a borrower gain financial stability, free up cash flow, and avoid falling behind on loans.

      That’s why I wrote this book. It’s long past time for a book on student loans that is comprehensive yet simple, blunt but empathetic. A book that leaves you feeling in control and confident. Hopeful for the future. Ready to take action. A book that tells you to go after your dreams and goals, to live the life you deserve, and to no longer have student loans constantly weighing you down.

      If you’re reading this, either you or someone close to you has student loans. I know this because over forty million people have student loans in the United States.

      Across those forty million-plus borrowers, there is over one and a half trillion dollars in outstanding debt.1 Roughly 70 percent of students graduate from college with student loans, and the average amount of student loan debt for a borrower in the class of 2017 was more than thirty-seven thousand dollars.2

      You may have more or less than the average borrower. Deferment, forbearance, or falling behind and defaulting may have caused your balance to increase significantly. You may feel resignation when you think of your loans. Tired, perhaps.

      On an uplifting note, there are repayment plans that may help you move to a more affordable monthly payment. There may even be potential opportunities to have your loans forgiven after ten, twenty, or twenty-five years of repayment. I will be the first to admit that, in the past, I was ignorant of the variety of repayment and forgiveness options, as well as the details surrounding each. It’s complicated. There’s a reason that one million new borrowers default on their loans every year3 and why you may have been one of them.

      Until you pay them off, student loans stick with you. They linger. It feels like you have no recourse. You can’t simply declare bankruptcy and have them disappear. In fact, you defaulting on your loans is actually profitable for the government and loan servicers because it leaves you with a higher loan balance. Student loan debt is a unique sort of debt; it’s not normal.

      And can we talk a minute about the reams of unhelpful advice, and uninformed and unempathetic opinions, that people share about student loans?

      “You should have gone to community college first…You should have chosen a different university…You should have worked more.”

      Should have. Could have. Would have.

      Unhelpful. Unnecessary. And usually, unsolicited.

      Or how about comments like “I’m so glad I didn’t have to take out loans. That would be terrible! I don’t know what I would do.”

      I’ll just say what you are probably thinking when you hear this: we can’t all withdraw free college from the Bank of Mom and Dad.

      This book is written for those who have already taken on college debt. It’s important not to dwell on things you can’t change. Student loans are one of those things. Your energy needs to be spent on looking ahead, not back.

      Student loans can take a mental toll on borrowers. This can result in negative thoughts and an unhelpful, if not damaging, mindset. Because of that, instead of diving into the process of understanding your loans, I want to start by talking about your money mindset.

Student Loans and Your Money Mindset

      Money mindset could very well be a new concept to you. It encompasses the beliefs, attitudes, and emotions that come to mind when we are dealing with money-related issues.

      Whether you like it or not, your money mindset has been shaped inadvertently by how you were raised and the situations that you are in currently and have been through in the past.

      For example, whoever raised you may have displayed an attitude of limitation when it comes to money. They may have made comments about there “never being enough money” and conveyed a feeling of helplessness in regard to increasing their income or generally improving their financial situation. If you grew up with a parental figure expressing this mindset, you may either mimic their mindset or go in the other direction, where you do anything in your power to make more money and push your finances forward.

      If you currently have student loans,