This guest post from Lisa is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.
Get Rich Slowly has covered ways to avoid student loans in the past, but I wanted to share how I also avoided loans…without a loan from friends or family, without lots of scholarships, and without having huge savings.
My parents had this philosophy about college and their children: If you want to go to college, we will support your decision, but we can't help you financially. That didn't bother me. Our family was long on kids and short on money. If they paid for me, what about the other six kids? That's a lot of cash.
In high school, I was a solid, mostly-A student, but didn't really shine in any subject; I was a bench-warming two-year basketball player, didn't belong to any clubs and had no civic interests. In short, I was a good student, but not good enough.
The one thing I did do well in high school was work. I worked in the cafeteria over lunch and earned free food and a modest stipend. I took advantage of my high school's work co-op program and worked at a bank during the morning (this was supposed to have a purpose, but besides earning money, the only thing I learned was the banking industry was not for me) and attended classes in the afternoon. In the evenings, I worked at a local grocery store.
These jobs enabled me to save around $3,000 by the time I graduated from high school. I also purchased my own car ($700!) and paid all my bills (health insurance, car insurance, gas, eating out, etc.).
In a nutshell, I:
- Was completely responsible for myself when I graduated.
- Hated debt with a passion.
- Didn't think about student loans as a college-funding option.
- Wanted to work a full-time job as soon as possible.
I was off to a good start.
My Career Choice
Many allied health programs are two-year programs, and I found one that would send me off to work full-time in the field in 24 months. The school was an independent program, though it was sponsored by two local hospitals. This was about 15 years ago, but many of these programs still exist. Often, they're amazingly inexpensive due to hospitals footing part of the bill.
How inexpensive? The tuition, fees, uniforms, and books for the whole two years? $3,000.
As I said, I wasn't a standout student. However, I found $3,000 in scholarships that were specifically targeted to our school, to healthcare, or to our local area. To stay out of debt, I worked like crazy and added a little bit to my savings. From my high school savings, I was also able to replace my first car by paying cash for a second ($2200). And again, I supported myself completely. I graduated with very little savings and no debt.
Without doing any research (just assuming that there would always be jobs in healthcare), I had accidentally picked a field in which, at that time, a huge shortage existed. When I graduated, tons of jobs were available, many of them offering sign-on bonuses. I ended up choosing a specialty area that was slightly different and paid more per hour. I was trained on-the-job for my additional responsibilities at no additional cost. I may have been nearly broke when I started working three days after I graduated, but I was twenty-years-old, making $40,000 per year with no student loans.
I made some stupid mistakes along the way, of course. But they didn't hurt me as much as they would have hurt someone with thousands of dollars of student loan debt.
One day, a few years later, my old instructor approached me. “Lisa,” she said. “I'm probably going to retire in the next 3-5 years. Would you be interested in taking my job?” I had never considered teaching, but the more I thought about it, the more I liked it.
“I might be interested in that,” I replied.
“If you are, you'll need to get your Bachelor's degree. I want you to start working with me next year. Then after a couple of years, I will retire, and you can take over.”
So, with the help of the tuition reimbursement program through work, I enrolled in classes for my Bachelor's degree.
Many academic programs cater to healthcare workers such as myself, and I was able to finish my Bachelor's degree in less than two years, at a pace and method that worked with my life. But it wasn't easy.
I had to pay for one semester myself. This was the only time in my life I considered student loans. But, through some sacrifices, I was able to pay for my last semester ($1250) with savings and creative juggling of credit card due dates.
Part of the way through my Bachelor's degree program, I began teaching part-time. My instructor (now boss) was still grooming me to take her position. “You know,” she said, “if you still want my job, you need to get your Master's degree.”
I spent six months thinking it over. Did I really want her job? Teaching was good, but it was a lot harder than I thought it was going to be. And commit to two more years of school? Educators in my healthcare field are rare; ones prepared with master's degrees are even more so. She knew they might have a difficult time finding her replacement when she retired. She felt it would be to the school's advantage to have someone waiting in the wings when she retired, so she went to the Board of Directors and asked to have the costs of my entire master's degree program put into the budget. That was an opportunity I couldn't turn down.
I did have to pay $750 when I took slightly longer than expected to complete the program. With a combination of hard work, luck, savings, and my employers, I paid $2000 total for my postsecondary education.
Today, I am still teaching, now at a community college. I have a great schedule, good income, great benefits and find my job incredibly fulfilling. In addition, I have been able to find related work on the side that adds a big chunk to our yearly income.
The Advantages of No Student Loans
Before I started reading personal finance blogs, I didn't think about the benefits of having no student loans. I realize that student loans can be overwhelming, so I wanted to share my experience in hopes that it may help someone else. No student loans allowed me to:
- Save for one year and pay cash for a gently used car
- Take vacations
- Buy furniture
- Contribute to my 401 (k), beginning at 21-years-old (10% with a 3% match)
- Donate money to worthy causes or friends in need
- Pay off my husband's student loans
- Purchase our dream house with more than 20% down
Maybe something like this would work for you, or maybe it wouldn't. But I am so thankful for how it's affected my life and the life of my family.