Plans vs. Reality

This essay is from a finalist for the 2019 Student Loan Planner® Scholarship.

I had many plans to pay for my education and for paying off my student debt, but life happened and those plans changed.

Here is my story:

At age 17 I started college with an unclear idea of what career path to choose. My father was a physician in his 80’s (he was 63 when I was born), working as a Primary Care doctor in a clinic in Miami, FL. My mother was a stay at home mother with 5 children to care for.

My father was the breadwinner (a very old school and common Latino mentality), but by this point in his career he was not making much money and was earning just enough to put food on the table and keep a roof over our heads.

I grew up in a modest home, a family of 7 in a 3 bed/1 bath, but I was comfortable, and I was brought up to always work hard in order to succeed.

My parents did not have a college fund for me; in fact, they did not have a savings, or a retirement fund, or any plan for their later years, at all. As immigrants from Cuba, they did not know the way these programs worked in the US, and in the same old school “machismo” mentality, my father thought he’d live forever and did not prepare us for the day he would no longer be around.

In any case, I enrolled in a public institution, Florida International University, and began taking classes covered by financial aid. Eventually, I homed in on a career path, and while still qualifying for financial aid, I completed my pre-requisite classes with the goal of applying for nursing school.

When Federal Student Loans Aren't Enough

When the time came, I applied to various competitive programs and was accepted into only one – a private school program which was the most expensive.

And so, in the first unexpected twist, I had to accept the offer and over the next 2.5 years took out about $90,000 in loans, both federal and private, because I was only permitted to take out a max of $40,000 in federal loans.

I went to school full time and was not able to pay off any interest accruing throughout the 2.5 years I was in school. I was lucky though that I was able to continue to live with my parents, and of the loan money I did not need for classes/books I was able to save a few thousand dollars with the plan to pay it back as soon as I was done with the program.

But, as the second twist of fate would have it, only a few months into the program, my father became very ill and passed away. As it would turn out, my father did not have any will or money in the bank and did not leave anything behind for us.

There was no life insurance, no prepaid burial plot or allocation for funeral costs, only a surprise 2nd mortgage on a home we thought was owned free and clear.

I had to use part of my private loans to help pay funeral costs, to help my mom keep the house and car, and to pay the lawyer fees for his Estate.

This was probably the most stressful situation I have had to encounter in my life, but I dealt with it and continued to focus and my studies. And eventually, I graduated as a Registered Nurse making a starting salary of $60,000 annually.

I began paying back my student loans after 6 months and started the income-driven plan on my federal loans which equaled $0 the first year. My plan was to put extra payments to the private loans but in reality, I was only able to make minimum payments.

Getting a Master's Degree Without More Student Debt

After a year I married my girlfriend. She had a job with a large company and the opportunity for a promotion in NYC and we decided to move. She had a Florida Prepaid College Fund and luckily no debt. I had only the student loan debt and the promise of much higher salaries in New York.

At this point in my life, I had only paid down a few thousand dollars of my private loan and had barely paid anything on my federal loan. But I did not feel I was done with my education, nor had I tapped into my highest earning potential.

So, in a third unexpected twist, I decided to go back to school to get my Master’s degree as a Nurse Practitioner. My only hesitation was not to take on any more student loans.

So my wife and I worked full time while I went to school in order to pay for my Master’s program out of pocket. Luckily, we were able to pay for the program with $0 of student loans. Finally, something to cheer about!

In the meantime, I was only able to pay the minimum payments on my private loans. In 2016, when I graduated with my masters, I still owed about $82,000 in student loans. My plan now was to start working as a Nurse Practitioner right away and work extra shifts as an RN to pay off the debt as soon as possible.

Starting a Family with Student Loan Debt

And now, in twist number four, my wife was pregnant with our first child.

In 2017, my wife and I had a baby boy. New expenses such as bottles, diapers, baby formula, and daycare were quickly introduced into our lives. Living in New York with my wife and child we made a nice living, but with no family around to help, a newborn child who was always sick from the cold weather, and difficult work schedules, we decided it was time to move back to Miami, FL.

I continued to make minimum payments on my private loans and paid the least possible in my federal loans (extended graduated repayment plan) barely covering the interest. About $600/month with very little to show for it.

In Miami, we moved in with my wife’s parents to avoid throwing more money away on rent. However wonderful their generosity for allowing us to stay with them was, it was very difficult to raise a 1-year-old in my in-laws home.

He was their first grandchild and they loved and spoiled him, which was great, but difficult when it happened 24/7.

I decided I did not want student loans to hold me back from moving forward. So, because we thought a mortgage was better than rent (and about equal in cost) we ended up buying a home. The housing market in Miami is very competitive, definitely a sellers’ market, so we had to buy an older home that needed many repairs and took on lots of new debt to remodel it.

We are currently living paycheck to paycheck, paying for a mortgage, with $78,000 in student debt, high credit card debt (due to the home remodel), and a small savings account/401K.

Credit Card Debt and Refinancing My Student Loans

I recently began listening to financial podcasts, at the recommendation of a friend, and now I am trying to repair my finances and learn the behaviors I was not taught growing up. I can say I have definitely learned a lot from doing some research and knowing that there are ways to pay off student loans if you have a plan and stick to it.

I recently refinanced my student loans and now have a 4.65% down from 5.5%. I plan on paying off my credit card debt first and slowly start to build an emergency fund.

Once that is done, I will make big payments towards my student loans and plan to refinance again in a year or so. I will continue to use this approach and hopefully will be student loan free in a few years.

My advice to those nursing students looking to take out student loans is to try to avoid private loans so that you can hopefully qualify for loan forgiveness.

If you don’t qualify, then don't look at student loans as a 25-year program, but instead, have a plan pay it off early in your career while you still live with your parents and before you take on any large credit card debt or mortgage.

Everyone has a unique situation, but for me, I would probably change the fact that I kept making minimum payments and did not refinance sooner at a lower interest rate. I hope my story can help others plan better.

We all hate student loans but at the end of the day, if it were not for student loans I would never have been able to go to school and become a professional Nurse Practitioner.

Student loans give you the opportunity to live your dreams, but it should not have to take you 25 years to pay them off. And perhaps the most important piece of advice – educate yourself on the options! Don’t make the same mistakes I did.