anxiety, awareness, student loans

Knowing is Better than Not Knowing

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 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?
Feel free to leave a comment below!

Want to check how much you owe in government-funded student loans? Go here.


4 Comments on “Knowing is Better than Not Knowing

  1. Hi Sarah!

    I really like your message of how it’s never too late to start learning about personal finance. I am new to this, and that is the situation I’m in. I just started tracking my spending and was amazed at what I found too! I’m in Week 10 of my excel spreadsheet, and I enjoy the accountability and awareness that comes with tracking my spending. It’s helping me to really look at purchases intentionally and with thoughtfulness. I’m finding that it is reducing impulse shopping too.

    I found I could relate a lot to your post about the student loans.. Student loan debt has been (and continues to be) important to me too.. I was so anxious about the amount of money I owed, that I tried my hardest to avoid ending my studies so I wouldn’t have to enter into repayment.. I became a bit of a family joke; studying for 12 years full-time.. After year 6, the lendors stopped loaning money, and I paid out-of-pocket for the remaining years I went as I was also working. Studying for so long was an unwise financial move, but what is done is done, and I can only go from here.. see that my younger self was just trying to to cope with what felt to be an overwhelming situation.. I ended up spending a total of $100,000 on my education ($65,000 loans + $35,000 out-of-pocket)… wish now that I had just ordered books from Chapter’s and continued my love of reading that way 😉 Over the past 8 years, I’ve managed to whittle the debt down to $12,600 and I’m very grateful for that! My estimate is that by the end of 2017 it will reach zero (if things stay the same) and then I will treat myself to a dinner at the Mandarin!

    It is hard not to have debt fatigue after waiting patiently for so many years… and also hard not to fall into the trap of crossing days off the calendar and wishing months to go by till freedom; when the debt is finally paid off.. so I’m trying to balance that with mindfulness.. In hindsight, I would have made different decisions with my education (selected a path for career reasons, as an investment) instead of a long education for the sake of interest. The irony is that I’m working at a job which I love! (frontline social worker) and wouldn’t trade it for the world, but some of my colleagues have the position with only a 2 year college diploma (and not the graduate degree that I have). Have to laugh at the funny ironies in life! I didn’t need all this school. But I figure this is good practice and discipline that can be utilized later as well in paying off my mortgage 🙂

    1. Thanks for sharing about your experience, Carmon! I can definitely relate to the impulse to want to cross days off of the calendar while simultaneously realizing that that’s no way to live. And I agree that mindfulness is probably key here. It’s funny to think that even though student loans are very, very real, they also don’t have control over my moment-to-moment experiences in the world (or at least they don’t have control if I don’t let them have control). The sky is equally blue, and equally beautiful, regardless of the amount of my loans.

      And yes — isn’t it amazing how much difference it makes to simply put your spending into a spreadsheet? It continues to astonish me. Just the knowledge that I’ll have to type it into the spreadsheet later is a pretty effective deterrent for lots of unnecessary purchases.

      Sarah 🙂

    1. Thanks, Stefanie! It’s amazing what a difference knowledge and attitude can make. We can’t change what has happened in the past, but we can choose the way we think about things and the choices we make from this moment onwards. Empowering indeed!

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