The sticker shock of graduating with a doctorate
A friend asked me to talk to her best friend from high school. She has just graduated from veterinary school, and she has already landed a dream job as a small animal vet in her home state of Maryland. She was a straight A student, accelerated her studies, and worked while in school, but she needed loans to get through the many years of education. Her divorced parents could not provide her with any help, so the loans were her lifeline for school. Afterall of the hard work and focus she is thinking about what she now owes. The debt feels overwhelming for her. She’s staring down $148,000.
She made a solid decision investing in her human capital
I told her right now it can feel frightening.* Entering a professional field requiring a high level of education, still starts off at entry level pay. We all start somewhere. I counseled her that most likely this is the lowest income she will earn in her career, but what she has right now is a richness of human capital. A young professional has valuable resources: youth and education.
How do you pay off student loans? Bird by Bird!
Anne Lamott wrote one of my favorite books, Bird by Bird. The story of the book’s title is that her brother the night before a research report on birds was due, sat at the kitchen table in tears. He was completely overwhelmed. Her father comforted him that how he could get this done was just bird by bird. Not a whole project. Just one at a time. (sorry, Ms. Lamott for paraphrasing what you so eloquently wrote!)
Break the loans down into chunks
Don’t stare down the loan as one big lump, which is usually how it feels at 2 am. Recognize that you can pay the highest interest rates and with good credit soon consolidate loans. There are good strategies and systems to help break the problem down into pieces and build loan repayment victories.
Prioritize saving for retirement, too
If you are thinking about student loans, also think about saving bit by bit. Saving just a little in your 20s or 30s can make a difference in your future. It’s all standard wisdom: put away money in a 401K or IRA, and experience the potential for compounding growth . Every dollar counts. Your compounding interest can be going down on your loans, while your compounding growth for the future has the potential to be going up.
Call me to help plan for the long term
Sometimes people need a professional to help them breakdown a problem into pieces. My job is to help people see the whole picture – human capital, savings, obligations, and financial goals – and put it into steps. Planning can help you know your options and be prepared for the future. Let’s talk about your plan!
* This is for informational purposes only, is not intended as a substitute for individualized professional advice, and is not intended to advocate or solicit interest in any investment.