Happy Halloween from the Student LoanDown!
This year, we offer no clever costumes, festive parties, or spooky effects — just a heartfelt wish that your holiday is filled with more treats than tricks. Healthy or not, that's how we get through the stressful times!
Eventually Charlie's* transcripts were released and he obtained his degree — summa cum laude 
and Phi Beta Kappa — from the University of Minnesota. I told you he was smart! But with the degree and all its honors came a wide range of emotions, including severe financial fear.
Once the debt had been paid, how did you feel?
Honestly? I felt like telling the messed up and unsympathetic bureaucracy of that school to take a flying leap.
But, most importantly, I finally felt free and unfettered. I felt like nothing else, no matter how bad, would ever get me down. I felt grateful to my family and my friends for being constant sources of emotional support during the dark years of debt. Most of all, I am grateful to my father, who worked up to four jobs at one time to keep our family financially afloat and to make headway in the debt owed.
I will say this, and perhaps it is not entirely appropriate, but money is an emotional issue for me, and this is an emotional response to the issue. I said I am grateful to my father for all he did for me and for my family during some very dark years financially. But because my dad worked so much and was so burdened with the stress and constant worry about this debt, he became seriously ill. In the end, he was diagnosed with cancer and passed away when he was only 61 years old. For me, this debt will always be linked to the emotions of my father's untimely death.
What advice would you have for others who may be in a similar situation?
Start talking about money BEFORE you even THINK of applying to school. And honestly talk about what your family can afford and what sort of debt you can support. Students should do a lot of research, speak with the financial aid offices, and apply for every loan and grant available. And remember that there would be NO schools if it were not for the student. Remind the colleges of this and do not allow yourself to be brushed off by the bureaucracies.
How has this experience changed how you approach finances?
As I have said, money is linked to emotions for me. It is not the simple clear-cut idea of dollars and cents. It's linked to my father's death and to my own struggles to support myself and finance my continuing education. I find myself very cautious when it comes to finances and loathe to repeat the experiences of the past. However, I am much less emotional and terrified of money and debt than I once was.
How did the situation end up impacting your credit?
Miraculously, the debt owed did not reflect negatively on my credit. When I began requesting my credit reports
That huge sum of money owed, just sitting there and dragging me down, that's what truly affected me mentally and emotionally. The anxiety and stress of trying to come up with a plan on how to pay the debt was arduous, but, eventually, a payment plan was agreed upon with the school and the whole amount was paid off last year.
Even though your credit didn't take a negative hit, what made you decide to work on improving it?
My partner and I have a goal of purchasing a house within the next year or two. As such, we wanted to make sure there were no skeletons in our financial closets and that we had everything in order before we began the process of applying for a mortgage. Knowledge IS power and it's important to understand that money SHOULD work for YOU, not the other way around.
I review my credit reports every six months to check for any discrepancies and to see how my credit rating is improving, pay my bills ahead of time, and pay well over the minimum amount due. I've instituted an aggressive savings plan, including the purchase of CDs.
How are you feeling about your financial situation these days?
I make a lot of jokes about Suze Orman
But I do have her "tough love" tactics for financial health to thank for being in a much better place than I have ever been. I do not feel as weighed down and helpless as I once did. I feel very positive and confident that my goals for continued improved credit and the purchase of a home are well within my reach.
I'll have you know that I'm very proud of my dear friend Charlie. Throughout this whole financial ordeal (and there were some seriously trying times), he never let it get the best of him. When his debt was paid last year, we celebrated — celebrated his dignity, his tenacity, and ultimately, his freedom!
If Charlie's story has given you something to think about, I hope you'll share your thoughts.
Oh, and in case I didn't make it clear before, I'm thrilled about the prospect of getting his canned goods and embroidered dishtowels for Christmas!
* Names have been changed to protect the financially challenged.
After Charlie* embarked on his Ivy League adventure, he thrived. But unbeknownst to him, money was a problem.
Charlie, did you know that you had outstanding tuition bills?
For the year and a half I was at school, I had no idea there were any problems with paying for my tuition. If my parents received any sort of statements or letters, I was never privy to them.
I do not blame my folks for keeping this information from me. I think their first instincts were to protect me and to try to figure out on their own how they were going to come up with this huge sum of money to see their firstborn through his college education. And, the way I was raised, this is what parents do. They find a way, any way, to make their kid’s dreams come true, no matter what the sacrifices or hardships. And we were not raised to discuss the “sordid topic of coin.” So this crisis (and believe me, it was a crisis) just simmered and boiled over. And my entire family and I suffered for it.
How did you find out that you had to leave school?
I was home for the Christmas break. I had packed up all of my bags and even had some boxes addressed to my campus address that I needed to be mailed. I remember walking into our kitchen and telling my parents we had to go to the post office that day so the stuff would be at school when I arrived. They didn’t respond; they just sat there, very quiet. And I knew. I knew something was terribly wrong.
Mom and Dad broke the horrible news to me that I would not be going back to college and that Mom and I would be leaving the next day to collect all of my belongings. Of course, I was thunderstruck, devastated, shocked. I did not know how any of this could have happened. HOW could my carefully planned life have gone so terribly wrong? I remember a lot of tears. I was in a stupor for the entire drive and spoke very little to my mother.
When I got to school, I had to tell all my friends, as well as all of the freshmen I counseled (I was a Resident Counselor for my sophomore year) that I had to leave and I did not know if I would ever be coming back. I had less than 12 hours to pack up my entire college experience, stuff it into a tiny car and leave it all behind me. Once I got back home is when the anger and the fury at the school and what they had done to me and to my family begin to really take hold.
Because of the unpaid tuition bill, it took several years before your school would release your transcripts — meaning that you couldn’t continue your education elsewhere. How did that situation change your education plans?
I had no choice but to immediately go to work. With no college degree, I did not have a lot of options, but I did find a job at a local book retailer. I worked for several years in my home state and then transferred jobs to a neighboring state. Like any twentysomething
I always planned to go back to college. It was simply a question of when. And the WHEN was determined by the release of transcripts from the school. My education plans never changed — they were only postponed.
When all was said and done, how much did you owe?
We owed over $30,000, which included late fees and fines.
How long did it take to pay off the balance?
15 years.
Tomorrow, the final chapter: lessons learned (and emotional baggage packed).
* Names have been changed to protect the financially challenged.
It's October, which means that high school seniors all around the country have begun their college searches in earnest. They're taking entrance exams, filling out applications, visiting campuses, and setting their hearts on particular schools.
But are they thinking about how they're going to pay for it?
Are you?
A few posts ago I introduced my best friend Charlie* and his financial challenges. This week, I'm going to tell you how he got there (and hopefully, how you can avoid some of the pitfalls he experienced).
It all started in our senior year of high school, right around this time of year. Charlie was (and still is) my brilliant friend, and I always knew he was destined for something great. So it was no surprise to me that he was admitted to some very prestigious colleges.
Like many other prospective college students, the summer before my senior year in high school my family and I took a tour of the colleges and universities in which I had an interest. We took the incredibly long drive from South Dakota to the East Coast to look at seven campuses, both state and Ivy League schools. Of course, the academics and the prestige of attending an Ivy League school were very enticing.
In the end, I got into all the schools except for one. The spring of my senior year, I was invited to visit two of them for a weekend, to get a better feel for campus life, meet other students, etc. (I clearly recall receiving letters from both schools, telling me what an asset I would be to the student body, how impressed they were with my academics and extra-curricular activities, how I was very unique and had a lot of potential. Well, for an 18-year-old kid from a square Midwestern state, that's wonderful praise.)
I had a tough choice, but I knew that my father in particular would be over the moon if I decided to attend an Ivy League school. I remember walking into one of the large halls off the campus green and approaching my dad, saying, "How would you feel about having a child with an Ivy League degree?" The man literally leaped up and down, clapped his hands, and gave a whoop. He was so, so very proud. And that was very, very important to me.
Why was it important for you to attend this type of school?
Honestly? Because it had cache. Because it had status. Because I wanted to be one of the very few from my graduating high school class to attend an Ivy League school.
Most importantly, though, because I had EARNED it. I had worked so, so hard for four years to get excellent grades and to participate in a myriad of extra-curricular activities. My entire focus and direction while in high school was to be an academic all-star so that an Ivy League school would be able to look at my application and think, "Wow! We cannot pass this kid up! Let him in!"
Was the cost of education an issue for you? Your parents?
The topic of money was never, ever brought into the equation in my final decision. My parents never discussed it with me, and, as an 18-year old I assumed what most children do: that Mom and Dad would provide. How was I to think differently? We lived in a beautiful house with a pool in an affluent upper-middle class suburb. Why wouldn't I be able to attend whatever school I wanted, no matter what the cost?
I will also say that I do not recall the high school counselor with whom I spoke about colleges providing me with information about financial aid. Also, when I visited the campus and attended various programs to learn more about the school, I do not remember getting a lot of information about how to pay for college.
After I did get in and my family came to visit me in the fall of 1989 for Parents' Weekend, my folks did meet with financial aid. I think it was at that point, unfortunately, too late in the game, that they realized that an Ivy League education would be very dear and they just did not have the funds to see me through four years.
Of course, at that time, all federal loans and grants had been meted out for the year, so there really was nothing left for me. And, because my parents made a decent living, they did not see me as a hardship case. My parents were turned away without any help or any solid and feasible suggestions for paying for my education. In fact, I later learned the loan officer told my parents, "If we had known your son would need such significant financial aid, we never would have admitted him."
Next up: What happened to Charlie when the money ran out.
* Names have been changed to protect the financially challenged.
Looking for more guidance on preparing to pay and actually paying for college, as well as general personal finance information on a variety of subjects? (If you're reading this blog, I'm guessing that you're interested in these topics!)
There's a great new book out by wealth manager Russell Bailyn called Navigating the Financial Blogosphere , which has two chapters on paying for college — one on saving for education (Chapter 13) and one on borrowing for education (Chapter 12) — in a section called "Building Wealth Requires Planning."
The content is very objective and provides several different online resources to find more information. I especially like that the chapters are short and conversational. In fact, one of the reviewers on amazon.com calls it "a personal finance blog disguised as a book."
Of course, I should mention that the Student LoanDown blog is even mentioned on page 96, which is how I found about the book in the first place!
I'm a conflicted frump (see definition #2).
On the one hand, I'm kind of resistant to new things, especially when it comes to technology. But on the other hand, once a friend starts to sell me on it, I'm pretty easily converted.
DVR ? No way. My kids are going to wait to see their TV shows at the time they're aired. Just like I had to.
iPod ? Well, I have this Walkman, see. And it still works.
iGoogletm ? What the heck happened to my plain old Google page? This is so annoying! (Yeah, even little changes tend to throw me.)
Well, in the past year, I've fallen in love with my DVR, (Staci sang its praises to me), my iPod (I took one look at Staci's adorable Nano and it was all over) and now iGoogle (again, Staci convinced me how cool it was to customize my page).
I'd like to say I'm old-fashioned because of my age, but I can't. Staci and I are both proud grads of the class of 1989 ! I think I just have to chalk it up to my personality. So with that, I can totally relate to people who are resistant to changing their banking ways. But let me try to be the friend who changes YOUR mind.
A few years ago I was pretty old school when it came to finances (imagine that!). I got my bank statements in the mail and I paid all my bills the traditional way: checks, envelopes, stamps. But when I got married, my husband introduced me to the world of online banking.
I eventually came to realize that banking online is pretty great for a lot reasons – quick balance checks, you can transfer funds easily, pay your bills online, etc. But the really cool thing about it is that it lets you cut down on all those paper bank statements you receive.
Recently we've implemented a system at Wells Fargo where if you bank online you can view your student loan statements there, and with a couple clicks, you can request to stop receiving your paper billing statements. Getting online statements not only helps minimize the amount of paper mail you have to deal with, it also reduces your risk for mail fraud and is generally a nice thing to do for the environment.
Even a frump like me can get on board with that.
The other day as I was dropping off my daughter at her kindergarten class, I ran into my friend Dave's family. I was surprised to see them all — mom, daughter, and son — riding their bikes to school!
As I watched them pedaling with a parking lot full of SUVs in the background, I thought to myself, "They're definitely doing their part to save the environment!"
I guess I shouldn't be surprised, since Dave rides his bike to work everyday. But it did get me thinking about what I'm doing. I recycle my paper, glass and plastic at home religiously — even my 2- and 5-year old daughters know that bottles and cans go in the "circle" and that regular trash goes in the "square." But every little bit helps, and I always wonder what else I can do to make a difference.
Then, as I was browsing through the Rewards programs available through my Wells Fargo credit and debit cards, I came across a "Green" option...cool!
I was planning to go for an Amazon gift card, but now I think I'll redeem 5,000 points and get a Renewable Energy Certificate. The best thing? Each certificate supports 6,000 kilowatt hours of green power — that's like planting three acres of pine trees!
I know there's a lot more I can do, and I am always trying to learn as much as I can about how to be green. In the meantime, if I'm already going to use my debit card for necessary purchases, then at least I can feel good that I can do something for the environment. And as a Wells Fargo employee, it's nice to know my company is giving customers an eco-friendly choice.
What do you think about Green Rewards? Does having an environmental Rewards option matter to you?
In remembrance of one of my favorite writers of children's stories, I dedicate this post to Theodor Seuss Geisel , also known as Dr. Seuss (03/02/1904 – 09/24/1991).
That Bank I Am
With tuition rising,
Costs of books,
You'd think my account
Had been hit by crooks .
So I've been thinking,
And thinking hard today,
There has to be
A better way
To manage my money,
And still have fun,
When homework's done,
And the day's still young.
So I happened upon
Wells Fargo Online® Banking
I signed right up,
My keyboard clanking.
More surprised and delighted
Than one would think,
No more paper statements,
No more ink.
I can get my statements
Online and Free,
I can save a tree,
And have more time for me!
And then I found a golden treasure
No more rulers, abacuses or cups to measure
My Spending Report
Does everything
Except for my coffee, it does not bring.
It comes with my Wells Fargo account,
It's automatic, it's free,
And it collects and summarizes
My Check Card, Credit Card and Bill Pay transactions for me.
It has bells and whistles and bobbles and doodles,
Or maybe I'm confusing it with my pet Noodles.
At any rate, I have more time to play,
G'bye for now, have a fantastic day!
My best friend Charlie*, who lives in Minneapolis, was recently home for a visit. When he's in town, it's dangerous for both of our pocketbooks. We love to hit the local antique and secondhand stores, drink grande nonfat no-whip mochas, and get kicked out of Barnes & Noble for giggling too loudly. Seriously, we've been asked to leave. Twice.
On this particular Saturday, Charlie and I were in line at Culver's , our favorite Midwestern fast food joint.
"Listen," he said, pulling out his faux Dior wallet, purchased several years ago on Canal Street . "I can't spend a lot on this trip. Suze Orman has me on financial lockdown. I'm trying to buy a house. Everyone is getting homemade canned goods and embroidered dishtowels for Christmas."
Charlie has struggled with his finances for as long as I've known him – 22 years. After learning not-so-healthy spending habits from his family, he went on to make several unwise financial decisions – some that occurred as early as high school – that impacted his ability to earn a college degree, his credit score , and now, his options for purchasing a home with his partner.
In the coming weeks I'm going to tell you the story of how Charlie became "Young, Fabulous & Broke" – and how he's working to turn his situation around. Stay tuned.
* Names have been changed to protect the financially challenged.
Fall is pretty much my favorite time of year. The cool air, changing colors and leaves crunching under my feet...ahhh, love it.
This fall I'm taking a bit of a break, so I wanted to let The Student LoanDown blog community know it'll be a while before you see another post from me.
Unfortunately, my break is not to relax and enjoy the fabulous autumn foliage . I'll actually be on medical leave recovering from open heart surgery. Don't worry about me; I'm an old pro (this is my third surgery), and I'm handling the situation just fine (I even threw a heart surgery party).
Hopefully, I'll be back blogging before you know it.
In the meantime, look forward to all the stories I'll have to share when I get back. Those of you who've been reading the blog for a while have seen me compare some pretty random things to student loans. Think I can't do it with heart surgery? Just wait.
While I'm gone, please don't stop commenting on my posts or sending me your questions. The rest of The Student LoanDown blog team is ready to jump in during my absence. I know they might not be as cool as me, but they're still very qualified and fun to chat with!
Credit card offers are everywhere when you're in college. In your mailbox, in booths on campus, in stores – you name it. But what about when your university gets involved in these credit card offers?
A recent editorial in the Des Moines Register addresses the issue of marketing credit cards to students. Two major universities in my state are providing student information to their alumni associations , who have deals with credit card companies (those credit cards with your school mascot on them, for example). In turn, the alumni association gives some of the profits from these deals back to the universities.
There's also an interesting comment that follows this editorial about how this practice is just capitalism at work, and students are free to choose whether they get a credit card.
So what do you think? Is it wrong for universities to help market credit cards to students – and to profit from student credit cards? Are they putting students in a position to build up more debt than they can handle?
Or should schools have every right to see that students get offered credit cards that can benefit their university? Are they justified in assuming college-age students should be savvy enough to understand and manage the responsibility that comes with applying for credit?
Today the Student LoanDown blog is excited to introduce a new tool for our community called "Ask The Expert." You'll see it in the right -hand navigation section here on the blog. If you have a question about student loans, credit, budgeting, or something else that isn't addressed in one of our posts, this is your place to ask. Submit your question via email, and we'll do our best to answer it!
One caveat: If your question is about what happened on the latest episode of MTV's The Hills , this blog probably isn't the best venue to ask that. But you already know that I could help you out there, so 'nuff said. 
An experience this past weekend got me thinking about unplanned expenses. I had my first homeowner emergency – the water and sewer drain starting backing up...into my basement. Yay, homeownership!
Nearly $200 on the credit card later, I can once again shower, flush my toilets, do my dishes, and wash my clothes. Luckily, I created my emergency fund for situations like this. So I'm just a transfer and payment away from getting that cost off my credit card.
My situation got me thinking about student loan borrowers. College is full of unexpected expenses – higher book costs than anticipated, bigger utility bills, etc. Caroline suggested earlier this year to plan for the unplanned expenses. But if you didn't, what other options do you have?
If you've already used federal funding for tuition, but need more to cover the cost of your education (which includes your books, housing, etc.), one option to consider is a private loan. Depending on your situation, you may choose a certified or non-certified loan.
What's the difference? Check out this comparison with some of the big differences:
Certified |
Non-certified |
School certifies enrollment. |
School does not certify enrollment. You may be required to provide enrollment verification. |
The amount you can borrow is based on your cost of attendance, as determined by the school. |
The amount you can borrow is based on your cost of attendance or a fixed annual amount, whichever is less. |
The loan money is usually sent to the school |
The loan money is usually sent directly to the borrower. |
The interest rates may be lower for certified loans. |
The interest rates may be higher for non-certified loans. |
Here are two examples of Wells Fargo's certified and non-certified options for undergraduate students.
How have you dealt with unexpected expenses in college? Was your savings enough to cover them, or did you turn to a private loan?
Linking To Non-Wells Fargo Websites
The icon above appears next to every link that leads to a web site that is not operated by Wells Fargo. We are not responsible for the information collection practices of the non-Wells Fargo links you click to from our web pages. We cannot guarantee how these third parties use cookies or whether they place on your computer cookies that may identify you personally. We urge you to review the privacy policies of each of the linked websites you visit-before you provide them with any personally identifiable information. Click here to learn how to protect your personal information while using the internet.
Recent Comments