Pursuing a higher degree is expensive. Pursing a higher degree and not having a promising career to fall to, for you to be able to payoff your student loan(s), makes tuition even more expensive. Majority of us, including myself, can attest to not wanting to be in debt for life - where some student loans may not be forgiven.
Like many students in the United States, my parents were not able to afford my tuition while I was trying to pursue a higher education. So, I had to resort to obtaining student loans. During the course of my educational pursuit, I had borrowed the following:
My first two and a half years at Community College cost me: $0 - At that time, I was able to receive full-tuition reimbursement from Federal Student Aid grants (FASFA).
My last two years at UCLA cost me: $50,000 in student loans and $30,000 in credit card balances. In those two years, I lived off-campus, bought furniture, clothing, and expensed the rest on food.
My two years at Graziadio School of Business and Management, Pepperdine University cost me: $80,000 in tuition only, which I borrowed on student loans.
This sums to be $130K in student loans for both my Bachelor's and Master's degree, and $30,000 in credit card balances to pay for my food, furniture, and clothing.
Up to my last year at UCLA, I was naive to understand the financial consequences of borrowing money to earn my Bachelor's degree. I came to a realization during my senior year that my student loans will be nearing their due date and that I will need to pay the amounts I borrowed on my student loans within six months after I graduate - on top of my high minimum credit card payments and car payment. I had no job and income at that time. I was transferring the excess funds of my student loans, after tuition and books have been paid in full for the Quarter, to pay the minimum payments owed on my existing obligations. Blissfully and fortunately, in addition to my education, I had work experience, prior to attending UCLA, to be able to indicate on job applications. Eventually, I landed a part-time job as a Teller for Wells Fargo Bank while I was completing my last year of my Bachelor's degree. This helped me satisfy my minimum credit card payments and car payment that were coming due every month.
Upon graduating UCLA in 2008, my parents moved back to Iran as it was difficult for them to plan retirement here in the States, and they were offered a promising career opportunity in Iran while the United States was going through a, "Great Recession." So my sister and I took over the rent where my parents used to live, and I was given a six month window to payoff as much of my credit card balances as I possibly could before the minimum payments on my student loans came due. My strategy was to start paying more towards the principal of my highest interest rate credit card first, until I brought the balance to $0, while making minimum payments on all others, before turning my attention to the next credit card. In that same year, I decided to sell my car to pay off my car loan, cancel my auto insurance, and stop paying for gas; which, from this savings, I aggressively paid off the balances on my credit cards within one year. While working at Wells Fargo Bank, I took the bus to and from work for three years to be able to transfer the expense I had on my car to my credit card payments and student loans. As soon as all of my credit card balances turned to $0, I then went towards my student loan debts. While I was paying off my debts, I worked the smartest and hardest on all the teams I worked with; which, in doing so, this earned me promotions and raises at work. Every year I was promoted from my previous position, which included a raise. I went from working as a part-time Teller, to a full-time Banker, to an Assistant Manager, then, finally, to a Branch Manager. By the time I reached my Branch Manager position, I still owed approximately $20K-$25K for my undergraduate student loans. By 2011, I have obtained a lot of experience from work about the real estate industry and knowing that homes values are cyclical. I knew the time to buy a home was now. But, I also needed to lease a car in the meantime because the bus was becoming more difficult to rely on as my branch location was a lot further away from home. I leased a brand new, low-maintenance, car rather than buying one to ultimately keep my minimum obligations low to qualify for a home mortgage in the near future.
In 2012, I transferred my career and focus to Logix Federal Credit Union, as becoming a Financial Services Officer (originating home loans) was my primary passion then. In landing a career with Logix and minimizing my previous debt obligations, I pre-qualified myself to be able to buy my first home. I found a home that had an, "in-house" lender, which, they paid for my closing cost and my first six months of HOA dues then. Mind you, by this time, in 2012, the economy was still in recovery from the Great Recession, before home values increased year over year the following year thereafter. With my parents gifting me the 3.5% down-payment ($6300), I was able to obtain my first my home purchase for $180,000 (1 bedroom, 1 bathroom = 610 sq. ft.)
While working for a de novo ("anew") branch, I was exposed to the intricacies of establishing a business and a brand in a local community that has never heard of the company before. I took it upon myself to meet and exceed the branch's five-year goal in the first year of my employment. In amidst of what I set for myself professionally, I also wanted to pursue a higher education than what I had already earned from UCLA. Learning from my experience, I knew to live within my means, and to budget monthly while attending Pepperdine University, earning a Masters degree in Business Administration with an emphasis in Finance.
Fast forward to 2016, although I was paying the minimum payments on my student loans on time, I was barely making a dent in my student loans balances. By this time, I was over $100k in student loans from both my undergraduate and graduate studies. But, I am thankful to God for putting me in a terrific position. My home value increased from $180K to $290K in four years (from year 2012 to 2016). In addition to the home value increasing, by paying the minimum mortgage payments I was able to pay-down my mortgage balance too. I wanted to and I was able to reset my financial picture and outlook by not having such a large balance over my shoulders by selling my home. As a result, I was able to sell my home for $297K and I used that equity to pay off my student loans, car balance from when I bought my lease out, and have extra cash to start my own business, Moaddab Realty. I hope this blog reaches out to as many people as it can to let them know that the American Dream of buying your home and/or paying off your student loans is still plausible if you make the appropriate sacrifices, commitments, dedication, and passion to achieving your dream!
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