For day three of Fixing Terri’s Finances, she and I sit down and talk about the burden of the student loan debt she is dealing with. The first step is to find out exactly how much she owed. Do you know exactly how much debt you owe at this exact moment? Most people don’t. And neither did Terri. It turns out in Terri’s case, we were looking at over $100,000 owed for a bachelor’s and master’s degree. I’ll give you a moment to recover.
When we both saw the $100,000 total, Terri admitted she didn’t even know how or when the amount got so high. She, like many people, picked a college and decided to get a master’s because it’s what everyone did. Plus, she thought she’d be able to earn more with a master’s degree. The cost of it all stacked up behind the scenes.
As of today, Terri is making about $50,000 a year at a job in her field of study. Given the amount she’s making and the amount she owes in student loans, Terri needs to come to terms with the reality of a long, arduous debt payoff timeline. She’s in for a long student loan journey.
Thankfully, we discovered her employment in public service qualifies her for a federal student loan forgiveness program. To be a part of this program she needs to make minimum payments on your loans for the next 10 years. If she does this, all her remaining student loan debt will be forgiven.
As for her other debts, Terri needs to put the income from her second job as an adjunct professor toward paying those down as soon as possible. Having extra income from a second job is awesome. But if you don’t use it properly, it can easily get absorbed into your lifestyle. Teri needs to give her second job a job. Meaning, she needs to put all her second income toward her other debts. Download today’s Fix Your Finances worksheet and start making progress on your debt today.