This week was a great week. Why? Because I paid off my $11,000 student loan. After 15 months, I had accumulated $517.45 in interest, and averaged $767.83 a month in payments. For the first time in 4 years, I have no debt to my name, and it feels great.But I am a nerd and I didn't stop there. Now that I know exactly how much I paid in interest, I, of course, consulted my Quicken to figure out just how much college cost me.
Now there are some out there that could careless, and that's cool. Just stop reading. It's alright. But I find this fascinating and I think in the end it will have a point ;)
For the four years between 6/1/01 and 5/5/05 (plus interest afterwards related to student loan) my expenses were as followed:
- Direct Education: $91,411.09 (tuition, books, fees, educational travel & student loan interest)
- Room or Rent: $16,198.04 (both on and off-campus housing)
- Food: $13,244.59 (board, groceries, and dining out)
- Utilities: $3,984.94 (gas, water, electricity, cell phone)
- Tithe & Non-Profit Giving: $5,030.75
- Other Expenses: $18,802.33 (taxes, travel, auto fuel, etc...)
- Total Expenses: $148,671.84
Holy cow! Direct expenses only relating to my education was $91,411.09, and once you include living expenses like eating and having an apartment/dorm the sum was $148,671.84. Now, lets see how the bills were paid:
- Dividend Income: $70.56
- Savings Interest: $173.08
- Gifts from Others: $2,365.61 (mainly high school graduation & "Charlie's travel gifts")
- Investment Income: $4,4710.44 (GE Stock)
- Mom: $5,341.54 ($5,016.54 was for Summer of '01 and Freshman year)
- Grandma Borgmann Gift: $10,000
- Scholarships: $20,275.00
- Dad: $26,500.25
- Salary Earned from Working During College: $27,698.84
- Grandma Neslund Gift: $40,000
- Total Income: 137,135.32
The income/expense difference was $11,536.42, and after you subtract out $11,000 in student loan and the $517.45 in interest related to the loan, that left a "real college debt" of $18.97.
Now, I could take this is so many different ways, and I am going to try to hit them all.
First of all, it all was worth it. APU prepared me for the real world and my profession better than any university I can imagine. Even at the stark cost of almost $150k (that's a freakin' house in Indiana), it was still worth it.
Second of all, REDACTED FOR SENSITIVITY Which is lesson number two: I am very grateful for all of those who sacrificed for my education and I do not tread lightly on the idea that while I paid more than $40,000 of my own education, there was still $110,000 that came from elsewhere.
My third point is this: debt! Debt sucks. I hate debt probably more than most (hence the reason I have no savings right now besides a 401(k) but I have no debt). But still, the average student leaving college has $19,000 in debt (and if you are in private school like me and my alumni, it is far worse).
Debt when used correctly is a good thing (school, house, etc...). But even when it is a good thing, it is still a bad thing. As talk radio host (and friend of our show) Dave Ramsey says:
Debt is not a tool; it is a method to make banks wealthy, not you. Debt is dumb. Most normal people are just plain broke because they are in debt up to their eyeballs with no hope of help. If you're in debt then you're a slave, in the sense that you do not have the freedom to use your money to help change your family tree. According to a recent USA Today article about debt, 78 percent of baby boomers have mortgage debt, 59 percent have credit card debt, 56 percent have car payments.
The point is, get out of debt as fast as you can. Don't buy into the lie of "good debt."
It was a great four years of college. It was worth the extra 15 months of paying for it, but I am very releaved to be out form under it. I am glad I can now look onto the horizon as I look towards taking my next $140k venture of buying a place ;) (although I am still not sure if that makes sense).






What about the enormous opportunity cost of attending college. Put that $50,000 from your grandparents into a low-risk interest baring saving account (~5%), a CD (~6%), or the stock market (~13%) and you are looking at a lot of money.
Not to mention that you have to include what you could have been making had you simply worked for four years (minus living expenses).
College education is definitly worth it; however, it is _very_expensive.
I personally believe that there is such thing as "good debt" - but my definition doesn't include much (i.e. Mortgages only). Most people cannot afford to pay for a house outright, thus we must go into debt to buy one. Otherwise, we effectively walk outside and set our $600 on fire each month for rent. A house allows you to build equity and, in most cases, if you become in financial trouble, you can sell it and earn back all, if not more, than you spent.
The problem is that most people buy more than they can afford. Live below your means - thats my philosophy.
Ohh and I told you, the next time I am coming to Indiana I am flying in on my own plane (ok, not my own plane, but on one I rent ;) )
who exactly is we'll?
My mom owned it for the first year, and then I will have owned it for the last nine years. So we, collectively, will ahve owned it for 10 years ;)