60. College Choices and Forgiveness: Mastering Student Loans

In this introspective episode, Laura Sexton delves into the pivotal moments surrounding college choices and the financial implications that follow. Through candid personal anecdotes, she invites listeners to reflect on their own experiences and confront the weight of past decisions made during their college years.

With honesty and vulnerability, Laura shares her journey of realizing that attending college wasn't just about selecting a picturesque campus or chasing name recognition. Instead, it was about making informed decisions that aligned with her educational goals and financial realities. She acknowledges the pressure many face, especially first-generation college students, to pursue higher education without fully understanding the long-term consequences.

Amidst reflections on her own missteps, the host emphasizes the importance of self-forgiveness. She encourages listeners to release the burden of guilt and shame associated with past mistakes, recognizing that growth and wisdom often emerge from those very moments of vulnerability.

In this episode we’ll learn:

.     strategic college decision making

.     financial empowerment 

.     embracing self forgiveness

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Transcript

Laura: 0:02

Hello and welcome to the Accelerate Your Legacy podcast. I'm Laura Sexton, your trusted financial coach and money mindset specialist. Join me as we explore the world of money and money mindset while also paving the way for a lasting legacy that extends far beyond money. Together we'll eliminate stress, amplify freedom, and ensure you stop paying for your past so you can start saving for your future. If you're seeking peace in your finances, more margin in your budget, and a legacy that inspires generations to come, you're in the right place. Hey, accelerators! I'm just curious. When I say I made a bad choice in college, what is the first thing you think of? Maybe you think about, Oh, goodness, what did Laura do in college? Or maybe something comes up in your mind. What is something that you would say, I made a bad choice in college that comes up for you? Is that a bad haircut? An unfortunate relationship? Too much tequila? I mean, there are a lot of possibilities. 1 of my roommates in college, she and I used to have a saying that said, at least our bad decisions are entertaining. We have all the great stories, from relationships and haircuts, and the occasional too much tequila. It's fine. We all have those stories. But what I mean here, when I say I made a bad choice in college is that I made a bad choice in where I chose to go to school and I made a bad choice and how I chose to pay for it. College choice is one of the biggest decisions we make. And it's time for us to forgive ourselves for the mistakes we made in the past. I may be preaching to myself here. Maybe this doesn't have anything to do with you. Maybe you're very happy with where you went to school and how you went to school and what you studied. I went to school for a degree I knew I was never going to use. And I went to school because I thought I had to, and there's nothing wrong with the fact that where I was at that time was just a person that didn't know any better. I was. You know, the 1st person in my family to go to college and graduate my mom has college courses under her belt. My dad has college courses under his belt, but neither of them graduated from college. So it's 1 of those things where we just didn't know what we didn't know and I didn't know what I was signing up for. So, when it comes to you and your kids and where you choose to go to college, if you are young, and you are listening to this, I am so excited to have you here. Thank you very much. But if you were in your 30s or 40s, or even your 50s, and you have some things about college that you need to forgive yourself for today's the day to do it. When I say stop paying for your past, I don't just mean pay your debt off. I mean, forgive yourself for the choices that you made. So here's what we're going to do today. We're going to talk about how to choose a college and how to pay for college. 1st and foremost, your college choice is going to be the biggest indication of how you are going to go to and finish college. You should stay in state. You should not be leaving your state for another college across state lines because you are going to be doubling, tripling, or in some cases, quadrupling your yearly cost stay in state. And if you are dead set on, I have to go to this other school in this other state. Move there, live there for a year, get citizenship within that state, and then apply so that you are getting the in state rate. You should also choose your college based on education and not name recognition or the palm trees on campus. When I say that out loud, it seems absolutely ridiculous. But when I chose my college, It was because it looked pretty. I liked all the columns on the buildings and I liked the palm trees and the city. It was in was super cute. And that is how I chose what school I was going to go to. It was close enough to LA that I could be an actor far enough away that I could be a college student. So I was living the best of both lives in that regard, but I picked the school because it was cute. That is not a way to pick a school. You should base it on the education that you are going to receive. Is this the best way to get that education? Is this the only way to get the education you need? If you want to be a doctor or a lawyer or an engineer, you need to go to college. But if you want to be an interior designer. Going to college may not be the best way for you to get the information or the knowledge, or even the practice that you need to have. One of my nieces right now wants to go into band management. Speaking of bad college decisions. As a person who dated members of a band in college, I will tell you that is not the easiest thing to deal with. Who choose to be in bands, because they have a very different mentality. They are artists and they have a lot of ego. And if you want to be their manager, let's just say there's a lot of psychology classes you might want to take. If you're going to do that, uh, not just the music part, not just the negotiation part. There are a lot of different pieces that go into that. And maybe college is a great way to get that information. But I think spending time with the type of people that you want to spend your life with. That's going to give you a greater education. School could ever give you. Okay, so we have decided this college over here that is in state is the only way for me to get the education that I really need. So I am going to choose this college not based on name recognition or palm trees, but based on the education I can receive, I know this is where I need to be. It's going to give me the educational piece that I need to get to where I need to go in my career. So how do we pay for it? One of the best things that you could possibly do to pay for it is if you have children, set up a 529 plan. 529 is an account that you control. And you decide where your investment is going to go and this account can be used by your child to pay for education. You can go back and listen to my episode with Alyssa maze. She and I talked about ways that you can use that 529 plan, set it up to most benefit you in the future. Some states allow 529 plans to cover K through 12 education as well as. Additional educational 529 plan if your child, you set this up and you want them to go to college and they get to college age and they say, you know, what, I'm not actually going to go to college because I want to be a welder. Well, the 529 plan actually covers continued education, which means that for your child, it will cover welding certifications. It will cover any of that. Accredited knowledge based areas that they need. So, if they need to go into a welding apprenticeship. And they have to pay for that the 529 plan will cover it. So don't be afraid to set up the 529 plan. I think some people are like, well, it's just going to get stuck there. It's not going to get stuck there. You may have to pay some taxes on the growth if you don't use it for education, but there's some other really awesome things that can happen with the 529 plan. You can transfer it to another sibling or family member, which means that your child, if they choose to not use it, or they don't use all of it, they can transfer that to their children or their spouse, and Or another family member that you choose that they choose and you guys can make sure that this money grows and just think if your child doesn't use all of the money in this 529 plan and they keep it in an account where it's just growing and growing and growing for their kid, how crazy is that? They won't even have to put anything extra in it because it's just going to grow. Over their lifetime, while they have a child and that child is aging, and when they get to the age of needing to go to college, you just paid for your grandkids college without doing any extra work. That I think is amazing. Now, you may also be saying, well, what happens if my child gets scholarships? Well, you can take that same amount of money out of your 529 account. So the same amount of money that they are awarded as a scholarship, you can take that same amount of money out without penalty on that 529 account. Of course, that brings us to scholarships when your child is a freshman in high school. They should start looking for and applying for scholarships. There are some scholarships that will award as soon as freshman year. And if nothing else, they need to start doing research to find scholarships that they will be able to apply for senior year. If your child applies for 1 scholarship a day for all of their senior year, and they get a quarter of them, they will more than pay for their college. The crazy thing is there is plenty of money out there for scholarships for children that they are dying to give away, but nobody asked for it. Hundreds of millions of dollars every year. Go. Unawarded in scholarships because people don't know to look for them. They don't know to ask for them. I have a friend who's on this podcast. Her name is Meredith Fletcher. She was on this podcast. She talked about how she got a full ride to school because her teacher knew to ask the school for a certain scholarship. That is mind blowing that all you have to do is know the right place or the right person to ask. So start doing the research early. If you do not have a 529 plan that is equipped with hundreds of millions of dollars. Start doing the research early because anything that your child is awarded in a scholarship, if they don't need it right then and there, they can put it in that 529 plan to be used for further education. Christina Ellis wrote a book called Confessions of a Scholarship Winner, where she talks about how she had half a million dollars in scholarships. She received 500, 000 in scholarships. That's amazing. That more than paid for her school. And she did that because her mom did not have the money to pay for her to go to school and said, hey, I can't afford to send you to school, but I can afford to give you some time to help you research and help you apply. Do not sleep on scholarships. Look for them. Search for them. You can find them. And you can pay for college, it just might take you a little bit of time. Another way to pay for school, and this is really great. A lot of schools are doing this now. There's a dual enrollment program generally between public schools and community college. If there's a community college in your neighborhood, reach out to them and ask them about their dual enrollment program, because your child, as soon as freshman year of high school, they can start getting college credits for the classes they're taking in high school. Reach out and ask about it, because if you can graduate from high school with an associate's degree, that means you only need two more years at a four year university to finish your bachelor's. You can set your child up for success in time and in money, because you'll only have to spend two years at a four year school. Nobody asked, where'd you get the beginning of your credits? Where'd you get the, where'd you go to school in the beginning? Where did you start college? Nobody asked those questions. They just ask where you graduated from. Another way to pay for school is to work for the school. I worked at our alumni relations department at the school that I went to, which was super fun. I loved my office job, made 8 an hour. That was not working for the school and getting my school paid for. That was just a program. The school had where they were looking for cheap, reliable labor, and they got it from the students. At the school, I loved working for our alumni relations department. I would do it again in a heartbeat. Those women in that office were amazing and I felt safe and secure and I got to do some of those administrative things that I just really love to do so. That was wonderful. But what I'm talking about is actually working for the school. Getting the job 1st and then applying to the school. There are a lot of teachers that will move up to a college level when their kids are getting close to have to going to college and that way that they can cover the cost of tuition for little to no money because they work for the school. And then, of course, there's the U. S. military. If you join the military, they give you money to go to college. And in fact, they would love to pay for you to go to college. And I, as a citizen, would love to pay for you to go to college because you're choosing to serve your country paying for our service men and women and our veterans is 1 of the things that our taxes are meant. To do, and we, as American citizens should be thankful that we get to fund that because you go out and you serve and protect so boldly. And frankly, we should do more for our veterans and our servicemen and women. But the US military, if you are looking to do something, like, you want to be a pilot and you want to go to flight school flight schools, really expensive. You can join the military if you want to be a doctor. Medical school is really expensive. You want to be a dentist that's even worse than medical school. I know 1 gentleman that had a 1, 000, 000 dollars in student loans from going dental school. A 1, 000, 000 dollars, and he could have served 8 years and the US military and had it paid for. These are all. Good ways to pay for school. I'm going to tell you the worst way to pay for college, and that's a parent plus loan. You can go back and listen to episode 16 of this podcast, where I talk about how parent plus loans are insidious. Parent plus loans are sucking the lives and relationships from a parent and child and turning them, taking this beautiful relationship of a parent and a child and warping it into a master slave relationship. It is taking parents and making them at risk. It is taking children and making them ungrateful or worse. The parent signs up for the parent plus loan, knowing full well that they're the only ones that are responsible for making the payment. And then the child has given a handshake agreement that, yeah, when I get out of school, I'm going to, I'm going to go ahead and do this. And then you get out of school and your relationship turns into, are you going to pay it? Are you going to pay it? Are you going to pay it? Are you going to pay it? Are you going to pay it? Oh, it is heartbreaking. It is heartbreaking to see parents and children struggle over this thing. The parent thought they were doing a fabulous thing for their child, and paying for your child's education is a fabulous thing. But if you can't, your child can work through school and it's not going to harm them. In fact, there are studies that show that young adults that work through college actually get better grades because they have to manage their time and their money more efficiently. Do not take out a parent plus loan. A parent plus loan will rip apart your relationship. Don't do it. If you want to hear me go more into detail on that, it's episode 16. Let's say you're out of college and you're still paying off the mistakes that you made in college, the best way to do that is to look at your student loan or multiple student loans and make a plan. To pay them off and not just pay them off over time, because the way student loans are structured, if you make the minimum payment that they have set up at the very beginning, it's going to take you 20 years. If you're on an income based repayment plan, it can take up to 50 years of paying minimums to pay these off. If they ever get paid off, do you want to be in debt for 50 years for a degree that took you 4 years to get no. In fact, from right now, I don't want you to be in debt for these student loans for more than 2. If you were in debt from student loans for more than 2 years from the time that you hear this podcast, that is your choice. You were choosing to be in debt. You were choosing that because. You can pay them off. It is possible. You just need a plan in place to do it. And if you can't make the plan by yourself, you can go back and listen to any of my podcast about the debt snowball. Or you can reach out to me, scroll down in the show notes, click the money mastery button. Let's get on a call and I will help you set up a plan, a game plan to get these paid off in two years or less. Very quickly, I'm just going to say, lay out all of the debts that you owe, start with the smallest balance, and you want to pay that one off first. Now, you may say, well, all of mine are with FedLoanServices, or Navient, or Nelnet, or whatever the name of the service is that has yours right now. They have six loans, and it's all just one big payment. Yes, that's one big payment that gets dispersed between the six loans, but you can still see that it's six different loans, and you can still make a payment towards one loan at a time. The minimum payment that you owe will have to get paid and then you will make an additional payment and you'll have to call because these people can't get it through their heads that you want to do something specific. They don't understand their computer systems, not set up for this. You give them a call and say, I'm making this payment. I want it to go towards student loan a 3. And they'll go, okay, and they'll put it on that 1, but you have to call them. You have to talk to a person because for whatever reason, they don't like you paying off these loans. And if you think about it right now, there are 1. 3 Trillion dollars of student loans outstanding in America. The interest payments on those alone are a huge portion. Of what's coming into Congress to pay for all of these other things. And if you look at that fact alone, I don't think they're going to just forget them. Because right now it's helping bolster the U. S. economy. Think about that. Okay as you are paying these off, you are working on the lowest balance, non interest rate balance. We're looking at the balance of the lowest balance of the 6 loans. We're just pretending you have 6. You're going to knock that out with intensity. You have to be intentional about working extra about focusing the money to go to that 1 specifically, you have to have a plan in place. If you say, I'm going to put an extra 1000 dollars a month on to these loans, where is that extra 1000 dollars coming from? Are you going to have to go get a 2nd job? Are you going to have to join the gig economy? Are you going to become a coach and whatever it is that you do? What are you going to do to bring an extra money? The biggest key to paying off the mistake is that you have to forgive yourself for making it in the first place. I mentioned this a couple of times. This was something that was really hard for me. I went to school knowing that I was never going to use the degree that I was getting, and it took me a long time to forgive myself for not knowing any better. But it's not until you know better that you can do better. And now that I know better, I'm not going to let my kids just go to school for the fun of it. Maybe, maybe we're going to be in a position where they can go to school and they can do whatever they want and I can pay for it. And it's not going to be a problem. And if that's the case, great. Go enjoy your 4 years of college. Get your degree in beer pong. Have a good time. That's fine. But I'm not going to let them go into debt for degree and I'm not going to let them go get a degree. That's going to be completely useless, especially not if it's going to be completely useless for what they want to do with their life. I had to forgive myself for making this mistake. And I want you to do the same, because I promise you it's going to be a weight lifted off your shoulder. And once you forgive yourself for any mistake that you make, it's easier to rectify the situation. While I was beating myself up for the mistakes that I made, it was very difficult to make changes in my finances. It was very difficult for me to. Stop doing the negative behavior, because I was already beating myself up for it, so why not do, you know, I had the credit cards, I was beating myself up for having made the decision to put money on the credit card, and as I felt that shame and guilt, I would just go spend more on the credit card, because it made me feel better. Once I forgave myself, I didn't have to keep that destructive behavior in my life. So I want you to forgive yourself. For any mistake you made in college. It doesn't just have to be financial. It doesn't have to be college choice. I want you to forgive yourself for anything you've done between college and now. And I want you to forgive yourself for any mistake you make in the future. All right, my friends. That's it for this week. I want you to go out and make a difference. Thank you for investing your time with us today on the Accelerate Your Legacy podcast. Remember, your legacy isn't just measured in dollars and cents, but in the tools, habits, mindset, and reputation you leave behind. Don't just listen to the show, but take action on what you've learned. Share this wisdom with a friend who can benefit and help us spread the word by rating and reviewing the podcast. For questions or encouragement, reach out to me on Instagram at Accelerate Your Legacy or explore the resources listed in the show notes. I will be back with you next week. Until then, build your legacy with intention.