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Money Talks

It’s day 25 of Blogvember. I’m following the prompts from Andrew Canion, which can be found here.

I am among the many in this country who have student loan debt. I count myself lucky ones in some respects: I went to a state school and only had one year of out-of-state tuition, plus I worked part-time throughout graduate school and lucked into a number of grants along the way. Still, I landed up in more debt than I would have liked, and have spent the last nine years slowly working my way out.

Early on, a wise clinic instructor pointed out that my monthly payments were the cost of working in the field I wanted to. That’s a fair point, but just as fair a point is that I’ve been repaying that price for three times longer than I spent getting my degree.

There’s no question that tuition costs are rising, and were I to seek the same degree now that I did ten years ago, it would cost significantly more.

The loan “counseling” that’s required to take out loans for school is a joke (basically, it emphasizes that there’s a six-month deferment period, and you need to pay on time every month). Very little time is spent explaining how loans incur interest, and how interest must always be paid before principal. What should be explained is how to quickly and easily calculate the percentage of your payment which goes towards principal (hint: it’s much, much higher than the annual interest rate you’re quoted; as in, a minimum payment on my biggest loan, before refinancing, had 68-70% of each payment going toward principal, so I was lucky to pay down just $1,000 in principal per year at that rate).

There’s plenty of places to point to in terms of just how poorly educated we are about money and finances, but it comes down to just that: for a country as preoccupied as it is with capitalism, there’s scant attention paid to this most fundamental aspect of math and economics: the ability to navigate the world of money in a functional way.