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Saved by Borrowing

Morgen Henderson  |  May 12, 2020

IN HIGH SCHOOL, I worked at a local roller-skating rink to save money for college. I calculated that, if I kept working at the same rate once I was in college, I could make it through my four-year degree without taking on any student loans.

I was determined to make it work.

In my freshman year, my plan started with a budget—and that budget included this simple edict: Spend the least amount possible on everything. The grocery store was reasonably close, so I would save on gas by walking. I didn’t go out to eat. I didn’t go to parties. Instead, I stayed home, stressing about how to pay for college.

I started working more—by this time I was a manager at the skating rink—and I also took on a second job at a bookstore. But that took a toll on my grades and further destroyed any chance of a social life. I was completely miserable. I wasn’t making friends, my grades were going downhill and I was always tired. I needed to find a better balance between saving money and leading a happy, fulfilling college life.

After much handwringing, I finally decided to take out student loans. One reason for my hesitation: I’d heard countless stories of people finally paying off their student debt in their 60s. But I concluded there was no reason to feel guilty about borrowing. Education loans are meant to help college students reach their goals without stretching themselves too thin.

Still, to avoid taking on too much debt, I was careful to distinguish between needs and wants—and only borrow for what I truly needed. I still worked jobs to cover basics such as housing, food and gas, while using student loans for tuition, fees and books. Cutting down on the hours I worked helped my overall health and my grades, but I still earned enough to avoid a lot of unnecessary debt.

I was also careful about the type of loans I used. If you have to borrow, the best loans are subsidized, meaning they don’t accrue interest until six months after you stop taking classes. I checked how much in subsidized loans I qualified for each year, and then borrowed as much as I needed. Meanwhile, I limited the amount of unsubsidized loans, where interest accrues immediately.

Even though I took out loans, I still strove to control my spending. I bought off-brand groceries, skipped some of my favorite streaming services, and exercised at home instead of buying a gym pass. But after my initial, excessive frugality, I also learned to cut myself some slack, buying a new item of clothing once in a while, treating myself at my favorite ice cream shop and seeing a movie every few weeks.

Where did all this leave me? I finished school with far less debt than many other students. Nonetheless, I was determined to get my loans paid off quickly, so I continued to keep a tight rein on my spending. Result? Nine months after graduation—and just three months after the end of the grace period for the subsidized loans—I was able to pay off all of my student debt in full.

Morgen Henderson is a writer from the beautiful mountains of Utah. Her previous article for HumbleDollar was Last Questions. When she’s not typing away at her computer, you can find her baking desserts and and watching an excessive number of travel shows. Follow Morgen on Twitter @Mo_Hendi.

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