You know how sometimes when you see an email in your inbox that you know might contain scary and important information (medical test results, an acceptance/rejection letter, that sort of thing), your stomach drops, your heart starts pumping wildly…and instead of opening the email and reading it, you get up from the computer and go do something else instead?
For about five years, I treated my student loans like one of those emails. Five years is the amount of time that I’ve been a graduate student, which also means it’s the amount of time I’ve been allowed to let my loans sit, accruing interest, and not make any payments. Like many people with student loans, I find that they constitute a major source of anxiety. For me, this anxiety ebbs and flows depending on several factors: it’s worse at night than during the day, it’s worse when I’m alone than when I’m with other people, and it is easily exacerbated by hearing news stories about “the student debt crisis”. It’s also a bad idea to check the actual dollar amount that I owe…or so I thought.
To be clear, I’ve known all along the total amount that I borrowed. Part of this amount was from the past five years, and the rest was left over from a previous graduate program that I completed in 2007-2008. But what I didn’t know during the past five years – what I chose not to know – was the amount of the interest. Student loan interest rates, even on Stafford loans, are high. Too high. And because the interest is compounded daily, the impact that it has on the total amount of your debt is somewhat difficult to estimate in your head. I knew that no matter what, I owed a lot of money, but the idea of checking the actual total amount was so scary to me that I simply didn’t. For five years.
The negative impact that this not-knowing had on my anxiety was considerable. I would lie awake at night, wondering if the interest might possibly have doubled the total amount that I owed, or worse. Panicky thoughts would begin to surface. What if I owed more than I could ever pay back? Had I ruined my life by choosing to go to grad school? What if I couldn’t support myself after I graduated?
These anxious nights continued for several years. I think in truth it was sort of a combination of a) being too scared to check the amount and b) hoping that if I didn’t check the amount then it didn’t really exist. However, grad school does not (for most people) last forever, and according to my current timeline I am on track to graduate at the end of 2015. This means that beginning in 2016 I will need to start making loan payments. So because 2016 is fast approaching, I recently decided that for practical, responsible, financial-planning-type reasons I should try to temporarily swallow my fear and find out the exact amount that I currently owed, rather than waiting until after graduation when my first payment notice arrived.
I was so clueless about my loans that I didn’t even know how to answer this question on my own, so I made an appointment to see the financial aid counselor in my college.
“You can also look this up yourself online, you know, if you want,” she said as she typed my social security number into studentloans.gov and I sat next to her, squirming and trying to take deep breaths. “Ok, here it is.”
I looked at the number. It was high, no question. But it was not nearly as high as I had feared. My loans had not doubled in five years, and the interest was still much, much lower than the principal. This was how much I owed. No less, but also no more.
My reason for checking the numbers wasn’t because I thought it would ease my anxiety; however, that was exactly what happened. Don’t get me wrong: my loan problem did not disappear. I still owe a lot of money, and paying it back is still going to influence my financial situation in a huge way for many years. But at least I know how much I owe. It turns out that it’s pretty empowering to have a real number in my head instead of a question mark. Question marks, whether in the form of an unopened email, a mystery total debt amount, or a possible boogeyman hiding under your bed, can be incredibly frightening. But a real number is something you can create a budget around, something you can slowly count down from and slowly pay back. It’s the dust that is left under your bed in place of the boogeyman, who vanishes into thin air the moment you turn on the light.
Have you had an experience with question marks vs. real numbers that you’d like to share?
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Want to check how much you owe in government-funded student loans? Go here.