I’m a 30-year-old whose student loan balance increased by more than $20,000 in 6 years, despite making every payment. It’s enough to make you question your sanity.

Ashley Strahm standing in a brick alley
Ashley Strahm says her original student loan balance increased by over $20,000 in six years due to interest rates.

  • Ashley Strahm, 30, is a content strategist, activist, and writer in Durham, North Carolina.
  • She went to college at age 16 and took out $60,000 in student loans by graduation, which ballooned to over $82,000 thanks to interest rates.
  • Even after refinancing her loans she still owes $44,000, and it’s often “the first thing I think about when I wake up,” Strahm says.
  • See more stories on Insider’s business page.

I knew what I was getting into.

I’m a first-generation college grad born to two amazing parents from South America. I prepared to graduate from a private, all-girls, college-preparatory high school at 16, got a partial academic scholarship to a private university, and proceeded to take out $15,000 a year in federal Stafford and parent plus loans to cover the rest. (Fun fact: no one, not even the government, is willing to lend to a college-bound kid who’s not even remotely 18 yet. This meant my parents had to put their credit on the line to help me finance my education. I know that’s not unorthodox, but it would’ve been nice to at least have the option to shoulder the burden myself from the outset.)

Read more: This couple paid off $114,000 of debt then saved up $431,000 with these 4 side hustles. Here’s how much money they made from each gig and their advice to others.

So, let’s recap. It’s 2008, I’m aware America’s economy is going up in flames, but I got a pretty significant scholarship to attend college – which no one in my immediate family has done before. I went in with my eyes wide open, researching interest rates, deciding against private loans, refusing to accept my dad dipping into his 401k to fund my endeavor, and getting an on-campus job to subsidize costs while I was in school. (I obviously wasn’t aware of what we should all know by now – women, and Black women in particular, are disproportionately ensnared in student debt.)

“There’s more you could have done!” say folks who refuse to empathize with us (greedy/lazy/opportunistic/careless?!) millennials. “You chose to play rugby and spend frivolously on cleats, gas, and stitches for your unnecessarily procured gaping wounds! You could’ve sold a kidney, donated plasma, or went to a community college! How dare you even begin to complain about a college experience you knew would cost so much?!”

Stop right there, y’all. I knew. I was ready.

I lay awake at 20 years old in the spring of my senior year with unwavering determination. I was going to get a kick-ass job in journalism/communications/marketing and not even wait the six-month deferment period to allow my loan’s interest to capitalize. I viewed my loan balance as yet another thiccc rugby woman I had to stiff-arm into submission (and I’d had plenty of practice). I wasn’t scared. I’d incurred a significant fee to finance an education I both desired and relished the process of receiving … and I was ready to pay when my bill came due. I understood that each promissory note was another proverbial nail in my coffin.

This is what folks who stridently and stubbornly refuse to empathize with young student loan borrowers will never understand.

Many of us operate as though no one will save us, forgive our debt, and pretend our responsibility has ended. There are millions of us who lose sleep every night for years, plugging formulas into Excel spreadsheets and debt repayment calculators, budgeting for jobs they apply for mere months after enrolling in school. There are countless tears, anxieties, and plans that result in this burden we know we are accountable for.

Before I’d turned 21, I already accepted that the remainder of the decade would be spent in service to the investment I’d made when I was still too young to vote.

So I got down to it. I’m 30 now, and I’ve never missed a student loan payment. The monthly bills have fluctuated between $462 and $2,695 dollars per month, but I have never. missed. a single one.

What began as an original balance of nearly $60,000 when I graduated in 2012 ballooned to over $82,000 in 2018.

Yes, you read that right.

A 21-year-old who never missed a monthly $450+ student loan payment financed by the United States government saw her balance increase by over $20,000 over the course of six years.

You could comment on how I should’ve paid more than the minimum, how I should’ve worked over the course of six years to land a job that paid double so I could make a dent in the principal. That I should’ve gotten my parents or family to help, should’ve gotten a side hustle, should’ve lived in squalor and cut back on my already meager meal plans to pay more, ever more.

And I’m going to call bullshit on that.

I made my debt a massive priority. But when the minimum payment for my federal 8.5% interest rate loan is nearly $500, I will not accept that the issue lies with me. A kid with a degree bringing home $50,000 a year three years out of school should be able to make at least a dent in her debt burden. Instead of seeing my diligence rewarded, I saw my balance increase.

It’s earth-shattering. It’s enough to make you question if you’re insane; if you’ve been reading your billing statements correctly; if the loan officers you call every quarter are lying to you; if you’re the reason your efforts are failing.

But I’m still at it, y’all. I refinanced my loans to a 5.25% interest rate because my credit is over 815 at this point (yes, I’m proud). I married – which, besides being the best decision I ever made for my heart, also helps because (and I’ll just say it) after paying off his student debt, we’re contributing his entire monthly salary to mine. Every. last. cent.

We’re choosing not to have children partially because we’re already paying the equivalent of Montessori tuition for a non-existent five-year-old.

Hear this: People are feeling all kinds of ways about potential federal student loan forgiveness. I forfeited any possibility of that when I refinanced my loans with a private company three years ago, and I’d do it again in a heartbeat. I pray every night for the millions of folks still paying endlessly to the government to get their loans forgiven. They deserve it. They’re still sprinting up a treacherous mountain with no end in sight, paying astounding amounts of interest while suffocating under the weight of other basic financial responsibilities.

I wanted to be out of that hell so badly that I gave up any hope of a government bailout. If I still had federal loans, I’d still be running in place. I will support anyone who is still trapped in that federal student debt purgatory and sees their loans forgiven, because I know that pain. I feel that strife. When they are free, we’ll all be free. Their salvation couldn’t possibly deny me the sweet reprieve of my efforts for all of these years.

My husband and I are now paying twice the amount of our mortgage to my student loans every month. From the fall of 2018 to now, my balance has decreased from over $82,000 to $44,000. It’s the first thing I think about when I wake up and the last thing we talk about most nights before bed.

Sometimes, people ask me if I ever think about graduate school and it makes me want to vomit. Even as the pursuit of knowledge calls out to me, the shadowy nightmare of its cost keeps me far from ever considering it.

Read the original article on Business Insider

3 steps to start tackling huge student loans before you make a single payment

Master your Money 2021 Event 1
Panelists for Master Your Money’s virtual event include, from left to right, Personal Finance Executive Editor Libby Kane, personal finance coach and author Tarra Jackson, and Vice President of Young Investors for Personal Investing, a unit of Fidelity Investments, Kelly Lannan.

  • Personal finance professionals Tarra Jackson and Kelly Lannan joined Insider’s Master your Money Virtual Event.
  • They broke down the best ways to tackle debt repayment, including huge student loans.
  • Before you try to pay them off, make sure you have savings, know what you owe, and contact your lender to get your options.
  • This article is part of a series focused on millennial financial empowerment called Master your Money.

Before you start tackling an enormous debt like a student loan, experts have some advice.

Kelly Lannan, Vice President of Young Investors for Personal Investing at Fidelity, and Tarra Jackson, author of “4 Financial Languages” and “Financial Fornication,” explained during Insider’s virtual event, “How to control your debt, build your credit, and set yourself up to build wealth,” that there are a few steps to take before you start writing checks.

1. Figure out exactly what you owe and can afford to pay

Before you pay off your debt, you need to know exactly what debts you have, Lannan said. For a lot of people, this is easier said than done.

“Sometimes if you’re scared of the numbers and what they’re going to show you, it’s like inertia sets in and you don’t check them,” Lannan said. “But if you have no idea what you even have to begin with, how can you ever take action on it?”

Lannan recommended using apps to get an overview of your finances, but you can also start a basic spreadsheet or even a written list of your debt amounts, interest rates, and lenders to keep everything in one place.

Knowing what you owe and to whom is one side of the coin; knowing how much you can afford to pay is the other.

Jackson explained that before you consider refinancing or consolidating your loans, make sure you have a holistic picture of your spending and you know how much you can afford to pay your lenders each month. If you need to pay more than you can afford, she continued, use this as an opportunity to take a closer look at your spending habits and see where you might want to make a change to free up some cash.

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2. Get all your options from your lender

Jackson, who held the role of interim president and CEO of a credit union, suggested that borrowers struggling under large debts get in touch with their lenders to figure out all of their options for repayment. The lending institution might offer a deferment program, suggest refinancing, allow borrowers to split up the payment or extend the term of the loan to lower payments, or have other options for situations of financial hardship. As Jackson put it, “You can’t give what you don’t have.”

In her role at the head of a credit union, Jackson remembers struggling borrowers offering to give up their home or car in lieu of payments. But the union doesn’t want the collateral, she explained. “Most financial institutions, all they really want is the money,” she said, and they’re willing to work with you to get it.

3. Make sure your emergency fund is on track

One of the first steps in paying off a large debt balance seems counterintuitive: Start saving.

Before you worry about paying off your debt, make sure you’re saving an emergency fund. Lannan said, “The most important thing is that you make sure you have money set aside in case the unexpected happens.” An emergency fund is generally defined as about six months’ worth of living expenses saved somewhere easily accessible, like a savings account. That money is earmarked for an emergency like a job loss or medical emergency – something that might otherwise cause you to take on debt.

“What we don’t want to have happen is people are not prepared for the unexpected, and then they go further into debt, because they either can’t pay off the debt that already existed, or they have to take on more loans to do so,” Lannan said.

It’s important to save this fund somewhere separate from your checking account, to reduce the ease (and temptation) of tapping it when you need a little more cash in checking, added Jackson. She recommends automating your contributions, and then leaving that money entirely alone – no debit card, no regular access to the account. “That’s the best way to build your savings,” she said. “Set it and forget it.”

Read the original article on Business Insider