4 1/2 Student Loan Debt Mistakes I Made So You Don’t Have To 🎓💰😞💰😭 – The Avid Investor

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4 1/2 Student Loan Debt Mistakes I Made So You Don’t Have To 🎓💰😞💰😭

When I first began considering colleges back in 2006 I hardly gave consideration to the actual cost of attendance. My lack of awareness wasn’t due to a golden ticket to a free college education, rather it could be attributed to a simple case of total naivety toward the criminally inflated cost of a college in the United States.

As the youngest of six kids in a modest blue-collar family, there was no college fund set aside for any of us let alone the youngest. So I filled out a FAFSA, as everyone should, and let the chips fall where they may. Thankfully the University of Texas at Austin opened their doors to my eager mind, and the rest is history. Much, later on, I would also earn a master’s degree from the Savannah College of Art and Design. That takes us to the present day in 2018 and a small mountain of student loan debt later. (On the bright side, I began investing to help repay my student loans and created the Avid Investor Planner to get a better grasp on my financial future.)

Here are the 4 1/2 mistakes that I would encourage you to learn from and consider as you navigate the murky waters of student loan financing and repayment. Even if it seems daunting to take on or currently pay back your student loan debt you have HUGE HUMAN CAPITAL POTENTIAL! Your education will boost your lifetime earnings in a big way, and if you're smart about repaying your debt you'll be debt free just in time to send your kids to college. Just kidding... sort of. 


Seriously, Apply for Federal Financial Student Aid at https://studentaid.ed.gov/sa/fafsa

This one technically is not a mistake I made, but I knew plenty of people from smaller slightly more affluent families that assumed they wouldn’t get financial aid so they didn’t even apply. If this is you, I encourage you to go ahead and apply anyways. Force your parents to give you a couple of lines of tax return info that you’ll need. It’s painless and could save you thousands. You have to believe something is there in order to find it. Assume that you will get financial aid, and let the process prove you wrong rather than counting yourself out prematurely.


Financial aid can often include a federal loan for the amount that your school will cost and additional funding for things like living expenses, food, and books. Sure you might feel like John D. Rockefeller the minute you see the excess funds deposited into your bank account, but remember, that money has to be paid back, WITH INTEREST. If you realize that you have been funded more money than you’ll actually require you can immediately pay it back toward the loan and also follow up with your school’s financial aid office to make sure your funding amount is reduced to what you actually need moving forward.

I knew people in college, not (cough) me (cough), that would take their extra student loan funds and invest them in the stock market. I felt like the Wolf of Wall Street until a little event called the Global Financial Crisis of 2008 sunk every investment I owned faster than you can say Costa Concordia. Who would’ve thought ultra oil derivatives DIG and DUG would have been risky.

BONUS TIP: I’ve seen quite a few articles describing the pros and cons of unsubsidized vs subsidized federal loans. To spare you the lengthy reading on which loan to take in your financial aid package, here’s a summary:

Subsidized Federal Loan = GOOD!

(If you’re offered one in your Aid Package grab it like it was the last Twinkie on a post-apocalyptic earth. You pay no interest on this loan while in school and sometimes no interest while you get on your feet after college too.)

UnSubsidized Federal Loan = LESS GOOD, BUT STILL GOOD!

(You’ll pay the interest on this loan during and after school. Don’t fret too much since it’s a federal loan you can qualify for some pretty relaxed repayment options.)

Essentially, take both loans if offered. Odds are the subsidized loan won’t be enough to cover your full costs anyway. If you have to choose to take only one loan type then ALWAYS take the subsidized loan. 


I’m obviously being sarcastic here. The constraints of time-travel and biology won’t allow for this option… yet. The grain of truth in this is that you need to study your ass off. If you score well on entrance exams like the SAT, ACT, or GRE, MBA etc… you can qualify for some great scholarships offered by different schools.

I understand that this is way easier said than done, and if you’re like me enjoying your extracurricular life a little too much then you do not have this option. You do, however, have the free time to look for a part-time. The goal here is to reduce your need for student loans through being smart enough to qualify for different kinds of scholarships or if that doesn’t work out, increase your cash flow to help pay for school through a part-time job.

The lack of scholarships required me to take the latter option of working a part-time job to help pay for school. I didn’t make much, but it was enough to pay for the necessities in life while avoiding racking up frivolous credit card debt just to get by. I’m a little rusty on finding scholarships, but I know there are some great resources and competitions out there for students willing to do the legwork.


I wish someone would have encouraged me to make even a tiny monthly payment on my student loans starting from day 1. I was a very poor college student like many of you, but I think I could have mustered up at least $20 or $50 a month to contribute toward paying down my student loans. I did not do this. Instead, I ordered the triple baconator at Wendy’s with extra large everything and used the remainder of my monthly cash flow to upgrade my Netflix account to 4 DVDs at a time (yes, they used to ship physical DVDs).

If I had started paying down my initial undergrad debt by $30 a month for the 3 ½ years I took to complete college I would have amassed a modest but solid repayment amount of $1,260. It doesn’t sound like much, but every little bit helps in slowing the creeping specter of a 6% compounding interest rate.


This is a consideration that can’t be taken lightly. I was an English major as an undergraduate, but I had no plans to ever become a teacher. Had I considered the cost/benefit of going into something like Teach For America, The Peace Corp, or even the Army Reserves I could have had some form of total forgiveness, moderate relief, or forbearance. A whole swath of public service jobs qualify for student loan forgiveness once certain time-based mile markers are met.

My sister is an attorney who recently made the switch from corporate lawyer to county prosecutor. While the salary was not quite as a competitive as the private sector it actually evened out to be a pretty great salary when we calculated the public service forgiveness of her exorbitantly high law school loans if she stays in public service for at least 10 years.

Consider the various public service jobs out there or even private sector companies who have financial aid for graduate degrees or student loan matching which works the same way as 401k matching. Calculating the realized benefit from forgiveness, matching, or aid toward a new degree will help you to see the actual salary for a career path or job offer that you may not have seriously considered in the past.


Getting a college degree is a powerful way to grow your lifetime earning potential. Finishing school with a mountain of debt is not required. Use my tips along with some strong consideration of the best programs that fit your budget and likely future career earnings.

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