MONEY Out of the Red

Have You Conquered Debt? Tell Us Your Story

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With patience, you can pay off large amounts of debt and improve your credit. MONEY wants to hear how you're doing it.

Have you gotten rid of a big IOU on your balance sheet, or at least made significant progress toward that end? MONEY wants to hear your digging-out-of-debt stories, to share with and inspire our readers who might be in similar situations.

Use the confidential form below to tell us about it. What kind of debt did you have, and how much? How did you erase it—or what are you currently doing? What advice do you have for other people in your situation? We’re interested in stories about all kinds of debt, from student loans to credit cards to car loans to mortgages.

Read the first story in our series, about a Marine and mother of three who paid off more than $158,169 in debt:

My kids have been understanding. Now I teach them about needs and wants. The other day, I was coming home from work, and I said, “Do you need anything from the store?” My son said, “We don’t need anything, but we’d like some candy.” If they want a video game, they know they need to save their money to get that video game—and that means there’s something else they won’t be able to get. They understand if you have a big house, that means you have to pay big electricity and water bills. I’m teaching them to live within their means and not just get, get, get to try to impress people.

Do you have a story about conquering debt? Share it with us. Please also let us know where you’re from, what you do for a living, and how old you are. We won’t use your story unless we speak with you first.

MONEY Out of the Red

How I Paid Off $158,169 in Debt

G. McDowell Photography

Think there's no way to get out from under your obligations? This first in a series of profiles of people getting "Out of the Red" proves that it's possible.

Rachel Gause just wanted to give her three kids more than she had growing up. So, though she was receiving a secure income along with child support, she found herself living beyond her means every month—eventually racking up six figures in debt. With a whole lot of determination and almost a decade’s worth of belt-tightening, she’s climbed most of the way out. This is her story, as told to MONEY reporter Kara Brandeisky.

Rachel Gause
Jacksonville, N.C.
Occupation: Master Sergeant, United States Marine Corps
Initial debt: $179,625
Amount left: $21,456
When she started paying it down: 2006
When she hopes to be debt-free: November 2015

How I got into trouble

“I was just trying to keep up with everybody else. I’m a single parent to three kids, ages 10, 14, and 16. I was always spending extra on Christmas and on birthdays. Also, growing up, I didn’t have new clothes and new shoes at the start of every school year. But I wanted to make sure my kids always did.

Looking back, I wish I would have known not to rely on credit cards. I wish I would have known that it’s okay to keep your car for four or more years, as long as you maintain it.

I started going into debt when my first daughter was born, 16 years ago. I remember I had to get a furniture loan. By 2006, I had $55,848 in credit card debt and $76,711 in car loans. Then there were the personal loans. I had a consolidation loan that I used to pay off my credit cards. Altogether, it came out to $179,625.”

My “uh-oh” moment

“I wasn’t aware of how much debt I was in. The turning point for me was when I hit the 10-year point in the Marines, and I saw other people around me retiring. I wanted to sit down and see where I was at. And that’s when I realized I didn’t want to retire in debt. I didn’t want to be that person.

At the time, I had a Toyota Sequoia, and I couldn’t make payments on it. I knew I was in way over my head.

Even though I had three kids, we didn’t need that big truck. It was going to put my family at a financial challenge. So I spoke to a lady at my church, and I said, ‘I have this truck, and I’m going to trade it in for something smaller.’ And she said, ‘I always wanted a Toyota Sequoia.’ I sold it to her and got into a Corolla instead.

I realized buying that truck was a bad choice, and I knew I needed to develop better habits from there. That was my first step forward.

How I’m getting out from under

Now I put roughly $2,100 a month toward my debt.

For the rest of my income, I use the envelope system. Before I get paid, I do my budget. Then I have 13 envelopes—one for groceries, one for clothes and shoes, one for charity, one for dining out, one for gas, and so on. I go to the bank, take the money out, and divide it between the envelopes.

I don’t spend anything that doesn’t come out of those envelopes. Debit cards are nice, but swiping is less emotional. Cash makes me more aware of what I’m spending my money on. If I run out of money for something that month, I don’t buy it. But I’ve never run out of money for something important—now I’m more aware of how much I’m spending.

That’s because I also got a small composition book from Dollar General to track my spending. Every time I spend money, I write it in that book. Then I compare that to what I’m supposed to be spending, according to my budget.

I also do a quarterly audit on myself to make sure I’m not spending too much more on my cable or cell phone bills.

But it’s not all deprivation. We have a chart that we color in every time we reach a milestone, and we treat ourselves to something nice. For example, recently I went on a trip with my high school classmates to Atlanta—funded totally in cash.

My kids have been understanding about our debt-free journey. They know that mommy has made some bad financial decisions in the past. Now I teach them about needs and wants.

The other day, I was coming home from work, and I said, “Do you need anything from the store?” My son said, “We don’t need anything, but we’d like some candy.”

If they want a video game, they know they need to save their money to get that video game—and that means there’s something else they won’t be able to get. They understand if you have a big house, that means you have to pay big electricity and water bills. I’m teaching them to live within their means and not just get, get, get to try to impress people.

What I’ve learned that could help someone else

My advice would be to sit down, see where you’re at—first, you have to know how much debt you’re in—and then create a spending plan. (Some people are scared of the word “budget.”) You have to tell your money where to go, or it’s going to tell you where to go.

The numbers may scare you in the beginning. It takes two or three months before you can get the budget right.

And you have to be consistent. If you don’t put 100% into it, it’s not going to work. You can’t be half, ‘I’m trying to get out of debt,’ and half, ‘I still want to spend money.’ You have to sacrifice.

My hopes for the future

Once I become debt-free, I plan to build up my emergency fund and then start actively investing and saving for retirement.

Then I hope to get my kids off to a better start.

My daughter will go to college soon. We’ve talked about student loans.

The main reason I joined the military was to obtain my college degree for free. I earned my degree in business administration from the University of North Carolina-Wilmington last year. But while I was there, I saw so many kids taking courses for a second and third time because they were failing and they weren’t going to class.

So I told my daughter, you’ll pay for that first year, and we’ll see how you manage. Then I’ll assist you with your second, third and fourth years. But first, I need to make sure you’re dedicated.

After I retire from the military, I want to become a certified financial counselor so I can help people break the vicious cycle of being in debt and dying in debt. My passion is to put together financial classes for non-profit organizations like women’s shelters, churches, and organizations for military service members. There aren’t that many in this area, and I see a real need. I see so many people struggling to survive, living paycheck to paycheck.

I’ve already started counseling some people who ask for help.

Every now and then, I get a message on Facebook from someone I helped that says, ‘I just paid off another credit card’ or ‘I paid off my car.’ That’s my motivation now. I don’t want to stop – the need is out there.

Are you climbing out of debt? Share your story of getting Out of the Red.

Check out Money 101 for more resources:

MONEY Student Loans

6 Ways for New Grads to Tackle Their Student Loans

clock about to strike
Jamie Grill&;mdash;Getty Images

You have to start repaying your college debts six months after you graduate. For the class of 2014, that deadline is approaching fast. Here's how to get ready.

The six-month grace period for many student loans is about to expire for new college graduates. If the past is any guide, many people will miss their first payment and some will end up defaulting on their loans—even though there’s usually no good reason for that to happen.

The stakes are high: even a single missed payment on a credit account can damage an individual’s credit scores, although many loan servicers don’t report delinquencies until borrowers are 90 days or more overdue. Borrowers who default—failing to pay for nine months or more—face having some of their wages and all of their tax refunds seized by the government.

Yet many borrowers may have already lost track of what they owe, and their lenders may have lost track of them because of address or email changes.

That’s still no excuse for not paying.

Borrowers shouldn’t wait to get a bill before making plans to repay the debt. Instead, here’s how new graduates should tackle their student loans:

1. Know what you owe

The typical borrower with student loan debt has four loans, according to a recent Experian study, and it’s not unusual to accumulate far more.

A borrower’s first task is to make a list of every loan, including the balance owed, the type of loan (federal or private), the date the first payment is due and the servicer, or the company designated to take your payments.

Borrowers should check the National Student Loan Data System for any federal loans they may have forgotten or for which they need more information. To uncover private loans, borrowers should get copies of their credit reports from AnnualCreditReport.com.

Recent federal loans have names that include Direct, Perkins, Stafford, PLUS, or Grad PLUS. Older loans include Federal Family Education Loan (FFEL). Private loans are typically issued by banks, credit unions, colleges, or non-profits.

2. Reach out for help

Borrowers typically can get access to their loan accounts online, and doing so can make managing multiple loans easier. Graduates should take the time to update their addresses and emails with the loan servicers so that they don’t miss critical communications.

3. Explore payment options

Income-based repayment plans, along with generous deferral and forbearance options that offer payment relief for up to three years, can keep the vast majority of federal student loan borrowers from defaulting, says Reyna Gobel, author of the book CliffsNotes Graduation Debt.

Private student loans offer fewer options for strapped borrowers. But some forbearance or deferral is typically available for those who are unemployed or facing other economic setbacks.

Even graduates who can manage their first payments should investigate alternatives.

Pay as You Earn, a federal income-based program, could lower payments to less than 10% of the borrower’s income—and those who work in public service jobs could be eligible for forgiveness of any remaining balances after 10 years of payments. (Those who work in non-public service jobs can get forgiveness after 20 to 25 years, depending on when the debt was incurred.)

If you’re unemployed or not earning much, Pay as You Earn can lower your payment to zero—while still keeping you out of default. Extended and graduated payment programs also can make payments more manageable. For more information, check the Department of Education’s student aid site and the Consumer Financial Protection Bureau’s Repay Student Debt tool.

4. Research consolidation

Consolidation used to be a way to lower interest rates on federal debt and make one payment instead of several. Today, federal student loans offer fixed rates, and consolidation merely offers a weighted average of those rates.

Plus, many borrowers now have just one servicer even if they have several federal loans, so they may already have the convenience of a single payment. The best reason to consolidate may be to opt for lower payments by choosing a longer payback period—15, 20, or 30 years instead of the typical 10 years, for example. But that increases the total cost of the loan.

The Student Loan Borrowers Assistance site has information about the pros and cons of consolidation.

One good reason for taking longer to pay back federal loans is to free up more money to pay off private loans, which typically have variable interest rates and few consumer protections.

Private loans cannot be included in a federal student loan consolidation. A few lenders offer private consolidation or refinancing that can include federal student loans, but borrowers could lose critical protections if they turn federal debt into private debt.

5. Rethink aggressive payment plans

Borrowers with decent incomes may be tempted to throw every available dollar at their debt. While this may decrease the interest they pay, they could be poorer in the long run if they don’t take advantage of opportunities to save.

Another problem with rapid debt repayment is a potential loss of financial flexibility. Money paid to student lenders is gone for good, unlike money accumulated in savings. A layoff or other economic setback could leave the borrower scrambling for cash.

6. Know where to find help

Borrowers should first contact their loan servicers to try to resolve any disputes. If that doesn’t work, borrowers can contact the Federal Student Aid Ombudsman for help with federal loans. For private loans or problems with servicers, complaints can be lodged with the Consumer Financial Protection Bureau.

MONEY College

Don’t Bother Appealing a Financial Aid Award if…

Rich woman crying
Crying poor doesn't always work wonders with the financial aid office. iStock

Sometimes it doesn't make any sense to ask a college for more money. An expert explains what those times are.

I’m often approached by families who want me to help them request more money from a particular college. About a third of the time, I turn them down.

So what is it about these families that has me refusing to take their business — and their money?

It’s their unrealistic hopes. These families want a strategy. They’ve read that if you show a college a competing award, the college will match it. Or they’ve heard that you can negotiate a better award by telling the college how much the student wants to attend the school.

If these are the only reasons they want more money, I tell them they can appeal themselves. These parents will probably be unsuccessful if the award they want a college to match is in a different category of selectivity. A highly competitive college that does not give merit awards will not match a school that has awarded a student an academic scholarship. That selective college will award only need-based aid, based on the family’s income and assets; the other college uses merit awards to entice students to attend, regardless of their financial situation.

Financial-aid appeal letters are difficult for colleges to respond positively to, since a decision to change an award is limited by a college’s policies and requires consensus of the financial aid committee. There are no cut-and-dry rules of what will be accepted and what won’t. The committee can use what they term “professional judgment” and override entries on financial aid forms.

I try to put myself in the college’s shoes. I will assist a family, for example, whose primary wage earner is out of work because of an incapacitating illness that struck after the student submitted his or her financial aid forms. I’ll help a family forced to maintain two households because the family can’t move and the only job a family member can get is too far away for a commute. I’m also sympathetic to families forced to draw upon retirement funds to pay for medical bills.

In these cases, I will calculate the decrease in income available for college expenses and ask the college to lower the family’s income by this amount in their financial-aid calculation.

On the other hand, what if the parents want to appeal due to high living expenses, such as a $7,000-a-month mortgage, three $600 monthly car payments on their new SUVs, and private basketball coaching for their children? In such a case — and I really did hear from such a family — I pull out my “World’s Smallest Violin” and play a tune. I tell them their letter will be posted on the bulletin board in the financial aid office’s lunchroom, so that the financial aid officers get a quick laugh from it each time they take a break from their demanding jobs.

I get no pleasure out of helping with these types of appeals. For me to work with them, they need to pass my personal litmus test: They have to make me shed a tear after hearing what’s going on with the family — not make me run for my World’s Smallest Violin.

———

Paula Bishop is a Certified Public Accountant and an adviser on financial aid for college. She holds a BS in economics with a major in finance from the Wharton School and an MBA from the University of California at Berkeley. She is a member of the National College Advocacy Group, whose mission is to provide education and resources for college planning professionals, students and families. Her website is www.paulabishop.com.

MONEY retirement planning

Millennials Feel Guilty About This Common Financial Decision—But They Shouldn’t

Sad millennials leaning on desks
Paul Burns—Getty Images

Young adults aren't saving as much as they think they should for retirement. But paying off debts is just as important.

Millennials are pretty stressed out about their long-term finances, according to Bank of America’s latest Merrill Edge Report. Some 80% of millennials say they think about their future whenever they pay bills. Almost two-thirds contemplate their financial security while making daily purchases. And almost a third report that they often ponder their long-term finances even while showering.

What’s eating millennials? Student loan debt. Even the very affluent millennials surveyed by Bank of America feel held back by student debt—and these are 18-to-34 year-olds with $50,000 to $250,000 in assets, or $20,000 to $50,000 in assets and salaries over $50,000. Three-quarters of these financially successful Millennials say they are still paying off their college loans.

Among investors carrying student debt, 65% say they won’t ramp up their retirement savings until they’ve paid off all their loans. But with that choice comes a lot of guilt: 45% say they regret not investing more in 2014.

Contrary to popular wisdom, millennials are committed to investing for retirement. Bank of America found that the millennials surveyed were actually more focused on investing than their elders. More than half of millennials plan to invest more for retirement in 2015. But 73% of millennials define financial success as not having any debt—and by that measure, even relatively wealthy millennials are feeling uneasy.

Fear not, millennial investors. You’re doing just fine. First off, you’re saving more — and earlier — than your parents’ generation did. A recent Transamerica study found that 70% of millennials started saving for retirement at age 22, while the average Baby Boomer didn’t start until age 35. On average, millennials with 401(k)s are contributing 8% of their salaries, and 27% of millennials say they’ve increased their contribution amount in the past year. Even if you can only put away a small amount at first, you can expect to ramp up your savings rate during your peak earning years.

For now, here are your priorities:

Save enough to build up an emergency fund. You could be the biggest threat to your retirement savings. A recent Fidelity survey found that 44% of 20-somethings who change jobs pull money out of their 401(k)s. (That’s partly because some employers require former workers with low 401(k) balances to move their money.) Fidelity estimates that a 30-year-old who withdraws $16,000 from a 401(k) could lose $471 a month in retirement income—and that’s not even considering the taxes and penalties you’d owe for cashing out early. If you have to make the choice between saving and paying off debt, at least save enough to get through several months of unexpected unemployment without draining your retirement accounts.

Pay off any high-interest debt first. When you pay off debt, think of it this way: You’re making an investment with a guaranteed return. Over the long term, you might expect a 8% return in the stock market. But if you have a loan with an interest rate of 10%, you know for certain that you’ll earn 10% by paying it off early.

Save enough to get your employer’s full 401(k) match. The 401(k) match is another investment with a guaranteed return. Invest at least as much as you need to get the match—typically 6%—with the goal of increasing your savings rate once you’ve paid off the rest of your debt.

Related:

MONEY Opinion

What Congress Should Do to Give Student Loan Borrowers Hope For Relief

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Blend Images - Hill Street Studi—Getty Images/Brand X

Student loans are the only debt that can't be discharged in bankruptcy. Joe Valenti and David Bergeron of the Center for American Progress argue for two law changes to fix this.

Steve Mason’s story could keep any parent up at night.

The Redlands, Calif. pastor co-signed $100,000 in private student loans for his daughter Lisa to attend nursing school. But Lisa died suddenly at age 27.

Now, the loans intended to ensure her financial future are threatening to impoverish her parents and their three young grandchildren because Mason remains on the hook for the loans. He is struggling to provide for his family while trying to negotiate with lenders to settle on his daughter’s debt which, with interest and penalties, now totals about $200,000.

If he had co-signed a car loan for his daughter, or if his family had racked up credit card debt, or nearly any other kind of debt, the Masons would have had a way out: bankruptcy. Our Founding Fathers, appalled by British debtors’ prisons, created bankruptcy courts to give Americans that are struggling with debt a chance to reduce or even erase those financial burdens, and gain a fresh start.

Unfortunately, Congress has carved out an exception to this American promise: student loans.

The student loan exception to bankruptcy laws ignores tragic life situations of students, parents, and grandparents alike. And it should be changed. A common-sense approach to bankruptcy reform would help struggling families like the Masons while promoting a better student loan system for everyone.

How Student Loans Became the Exception to the Rule

Until 1976, all types of loans were treated equally under bankruptcy law. But that year, Congress passed the first exception, declaring that bankruptcy judges could only dismiss federal student loans under the direst of circumstances.

In 2005, Congress expanded the exception to include private student loans—those made by banks and credit unions.

Now, bankruptcy judges are only allowed to discharge the student loans of those who have proven they have “undue hardships,” which generally means never being able to work again.

The death or disability of a borrower discharges federal student loans. But private loans—such as those the Masons took out—don’t have those provisions. So private student loans plague those who are disabled as well as the survivors of those who have passed away, such as the Masons.

All together, under current law, it is next-to-impossible to get rid of any kind of student debt in bankruptcy.

How to Fix the Problem

Here are two simple steps that would help make student loans fairer and more bearable:

1) Allow judges to wipe out the private student loans of any private lender that fails to:

A) Discharge loans in the cases of death and disability, as the federal government does.

B) Charge reasonable interest rates.

C) Allow borrowers repayment flexibility, such as deferment and forbearance options for those in financial difficulties.

2) Allow judges to wipe out any student loans—including federal loans—taken out for colleges that:

A) Have high dropout rates.

B) Have high student loan default rates.

Lenders who charge reasonable rates, allow flexible repayment and wipe out the debts of the disabled and deceased could be considered “qualified” for the current tough bankruptcy rules. Bankruptcy would remain the narrow path of last resort it was designed to be for borrowers. But lenders who don’t meet these standards—basically, those that don’t give borrowers any way out—would be subject to the same bankruptcy laws as other lenders.

Schools, too, would need to earn the bankruptcy exemption for the programs they offer. If students are not likely to complete the programs they’re borrowing for, or generally don’t earn enough to pay back the debt, their federal or private student loans would be dischargeable. There is no sense in penalizing students, parents, and grandparents lured by false promises of success.

Indeed, a study two decades ago by the U.S. General Accounting Office found that low-income borrowers who dropped out of poor-performing schools were the borrowers who most frequently defaulted on their loans—not successful young grads simply trying to walk away from their obligations.

It is economic circumstances, rather than moral failings, that often brings families to bankruptcy as a way to deal with difficult and unforeseen situations. Surely the Masons could not have anticipated their current situation. And it’s probably a situation that no member of Congress anticipated either when they closed the doors of bankruptcy court to virtually all student loan debtors.

These are doors that Congress, and Congress alone, can reopen for students, parents, and grandparents who have fallen on hard times to have equal access to the same courts that the wealthy and corporations have used to make a fresh start. And these doors can be opened strategically to make sure bankruptcy remains a last resort.

Otherwise, families like the Masons will continue to struggle needlessly.

Joe Valenti is the Director of Asset Building at the Center for American Progress. David Bergeron is the Vice President of Postsecondary Education at the Center for American Progress and former assistant secretary for postsecondary education at the U.S. Department of Education.

TIME Money

I Don’t Have Student Loans and I Don’t Feel Bad for People Who Do

A pile of student loans
Zephyr Picture—Getty Images

You probably could have gotten your degree at a more affordable university closer to home. You might have even been able to live with your parents, like I did

xojane

This story originally appeared on xoJane.com.

My father is not a Wall Street banker. I’m not a member of the so-called “1 percent.” My mother isn’t an heiress and I’m not some genius who earned a full scholarship to the institution of my choice.

Yet somehow, by what most of my friends think was the wave of some fairy godmother’s wand, I graduated college without student loans.

Stats from the Department of Education show outstanding student loans total more than $1 trillion. A report from The Institute for College Access in late 2013 revealed the average new graduate starts his or her life with $29,400 in student loan debt. College as we know it is clearly unaffordable.

So my question is: Why do people keep embarking on the “traditional college experience” when they know it’s going to put them tens — sometimes hundreds — of thousands of dollars in debt?

And while some people say these 18-year-old kids don’t know what they’re getting themselves into, let’s not pretend we don’t know better. I distinctly remember asking my friend how he would pay off the roughly $70,000 debt he would incur to obtain a major in Ancient Greek and Latin at a liberal arts college in the Midwest. His answer? A simple shrug and flippant “It’s not something I have to worry about right now — hopefully they’ll be forgiven by the government.” Now that he’s still waiting tables four years after graduation, I’d say it’s well past time to start worrying.

I can’t pretend I completely understand how these people feel after the fun is over and the repayments begin, but I can say that I really don’t feel bad for them.

Why not? Because I worked hard to avoid taking out loans. My wonderful parents and grandmother helped me pay for my education, but in the end, it was a few decisions I made that saved me the burden of borrowing money I would never have been able to pay back. Unlike the majority of my friends who went to schools less than an hour from their parents’ homes and chose to live on campus rather than commute, my college roommates were named Mom and Dad. I chose state schools that were half, sometimes one-quarter, of the cost of the schools my friends were attending and worked a part-time on-campus scholarship job in addition to full-time hours at my retail job. I spent the four years of my life designed for partying essentially reliving my high school years. And yes, it was awful.

Imagine the stereotypical American college experience. You pick some private university in the middle of a cornfield with a tuition price of about $36,000 a year, plus room and board, party it up every night since you’ve finally escaped the teenage hellhole known as your family’s home, and stumble into your Symbolism in Harry Potter seminar at 11 a.m. still half-drunk and probably reeking of Icehouse. You join a sorority, get vomit in your hair more times than you’re willing to admit publicly, and spend half the day on whatever flavor-of-the-week social media site the guy you currently like is active on.

Sounds fun — until you realize all this will probably leave you at least $30,000 in the hole upon receiving that diploma. And guess what? Unless you absolutely needed some highly specialized major that was only offered at a few schools, chances are you probably could have gotten your education/accounting/psychology degree at a much more affordable university closer to home. You might have even been able to — gasp — live with your parents.

My college experience couldn’t have been further from the scenarios most of my friends lived, but I guess that’s what happens when you opt for the cheap route. You thought your college roommates were weird? Try living with a mother who has a disturbing penchant for singing Chris Brown and LMFAO songs and accidentally throws a Sharpie in the dryer with your load of freshly washed (and now ruined) clothes.

Remember that friend you had who went through a different boyfriend each week? This habit of constantly picking up something new applies to my father, but in the form of hobbies, not college-aged jocks. During my time living at home in college, I think it is safe to assume my dad acquired roughly 70 new pastimes. Among them were more traditional leisure activities like drawing, but a few were rather unusual — beekeeping, winemaking, beer brewing, and pretending to make merkins out of the hair the dog was shedding.

Of course, we can’t forget the fact that my younger brothers were also living at home during this period, albeit at separate times. Never underestimate the power of annoyance a brother yields — this is especially true when your youngest sibling loves Mariah Carey and weightlifting and has a tendency to say things like “I’m looking pretty vascular today,” as he downs a protein shake and six chicken breasts. You may find it’s uncomfortable to invite friends over when they’re home on college breaks as your brother, in an effort to show off his muscles, is in a near-constant state of undress, prompting your father to create a rule that forbids shirtlessness in the kitchen.

And the middle brother one of your high school friends thought was so cute? He’s not looking so cute these days when she comes over and he’s passed out on the couch — probably hungover — in his tighty whities with a half-eaten box of Oreos on his chest. When he wakes up from that nap he’s going to drink your apple juice — which, by the way, he doesn’t even like — just to piss you off. And if he’s really feeling like living dangerously, he’ll probably polish off that giant muffin you couldn’t finish and specifically labeled “FOR JES – DO NOT EAT.”

It wasn’t your average sorority house or dorm room, but it saved me tens of thousands of dollars, considering room and board at most universities in Chicago is roughly $9,000 a year. I’m not even going to pretend to feel sorry for my friends who moan about the financial crunch of paying back the money they borrowed to pay for their dorm rooms or off-campus apartments. After all, you get what you pay for — if you wanted your student housing to be free, you probably should have been prepared to listen to your mom singing that song about Apple Bottom jeans whenever you came home from class.

I’m curious about how everyone else went about the ever-growing student loan issue during college. Did anybody live at home to avoid taking out loans or keep their student debt to a minimum? And for the ladies with loans: Do you wish you’d done anything differently during your college years to limit your debt?

Jessica Slizewski is originally from Chicago but currently lives in New Zealand.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY Millennials

How Millennials Stalled the Housing Market Recovery

Wrecking ball hitting brick wall
Steve Bronstein—Getty Images

Millennials already have to deal with hefty debt from college, an iffy job market, and growing up in an era where MTV no longer plays music videos, but now they’re being blamed for holding back the real estate boom. Homebuilder adviser John Burns Consulting published details from a study earlier this month concluding that student loan payments will cost the housing industry 414,000 transactions this year that would have totaled $83 billion in sales.

Ouch. The ivory tower is crumbling at the foundation.

It’s been widely assumed that mounting student debt is eating away at this otherwise buoyant housing market recovery. John Burns Consulting’s study — boiled down to a free one-pager for those that aren’t paying customers that got the more thorough report — attempts to quantify the impact.

How did the adviser arrive at $83 billion? Well, we start with the 5.9 million households under the age of 40 that are paying at least $250 in student loan debt, nearly triple the 2.2 million leveraged college grads in the same predicament back in 2005. We then get to the assumption that $250 earmarked for student loan debt every month reduces the buying power of a potential homebuyer by $44,000. That’s bad, and it’s naturally worse depending on how much more than $250 a month some of these indebted students have taken on to pay back. That’s less money they can commit to a mortgage. John Burns Consulting offers up that most households paying at least $750 a month in student loan have priced themselves out of the housing market entirely.

It gets worse

The study only looked at folks between the ages of 20-40. That’s a pretty sizable lot, especially since 35% of all households in that age bracket have at least $250 a month in student debt. However, even John Burns Consulting concedes that there’s “a big chunk of households over age 40 who have student debt” as well. It’s not likely to be as bad, naturally, but it’s all incremental at this point.

This report also happens to come at a time when the housing industry is starting to flinch after a couple of years of boom and bounce. Right now everything seems great. New home sales data released this past week showed the industry’s highest monthly growth rate in more than six years. However, the near-term outlook is starting to get hazy.

Shares of KB Home KB HOME KBH -2.236% shed more than 5% of their value on Wednesday after reporting uninspiring quarterly results. Revenue and earnings fell short of expectations, and the same can be said about its number of closings and order growth. Earlier this month it was luxury bellwether Toll Brothers TOLL BROTHERS TOL -0.653% setting an uneasy tone after posting a year-over-year decline in the number of contracts it signed during the period and an uptick in the cancellation rate for existing home orders.

It gets better

The student debt crisis is real, and the skyrocketing costs of obtaining a postsecondary education naturally open up the debate of its necessity. However, it’s also important to remember that university grads are earning far more than those that don’t attend college.

Source: U.S. Department of Education, National Center for Education Statistics. (2014). The Condition of Education 2014 (NCES 2014-083), Annual Earnings of Young Adults.

The median of annual earnings for young adults in 2012 was $46,900 for those with a bachelor’s degree, $30,000 for those with just a high school degree or credential and $22,900 for those who did not complete high school. Those going on to grad school for advanced degrees — and that’s where student loans can really start to pile up — are at $59,600 a year.

In other words, most college grads, and especially grad school graduates, are typically better off than those that didn’t pursue higher education, even with the student loan albatross around their white-collared necks. The housing industry would be better off if colleges were cheaper or if student debt levels were lower, but the same can be said about purchasing power in general. At the end of the day, debt-saddled or not, the housing industry needs its college graduates.

MONEY College

Choosing a College Major by Age 16 Pays Off. Here’s Why

Forget the old thinking that kids could wait until college to decide a major. Today, they really ought to be making this decision before their junior year of high school.

I know what you’re thinking: How can I suggest such a thing? Why would we put that kind of pressure on high school students? Shouldn’t they be allowed to explore their interests in college first before having to declare a major?

But what’s the alternative?

By the time most students lock down their major, they’re halfway through their college career or nearly out the door. By some estimates, 80% will change their course of study at least once before graduation. And, we’re telling them not to worry about it. Just take your time, explore your interests and get your diploma.

But with students’ future financial health on the line, discussions around major choice and career path are just happening too late.

Delaying these important decisions could leave a student needing more than four years to complete the class requirements necessary to get a degree, and additional semesters or years add to the already burdensome cost of an education. For bachelor’s degree grads in the class of 2013, average education debt was almost $38,000, according to a report by Edvisors.com.

Additionally, what if a student ultimately ends up choosing a major that leads them into a low-paying field after they’ve already decided on a high-cost school and taken on substantial amounts of student loan debt?

Income-driven repayment plans from the federal government may offer some help for those that choose less lucrative career paths, but these plans do extend the repayment period from the typical 10 years to 20 to 25 years. This could mean that in the years when your children should be thinking about saving for retirement or for their own kids’ education, they’ll still be paying off their student loans. And, these plans won’t apply to any private loans used to fund college.

Major choice, and ultimately career path, should help guide your child’s choices around where to attend college and how much education debt they can afford in the long run. These choices have far-reaching implications. Here at PayScale, we just released data on salary potential for 121 associate degree majors and 207 bachelor degree majors as part of our annual College Salary Report. Understanding earning potential should be a pre-requisite to signing any student loan documents.

Big life decisions are scary, but mountains of debt (and the prospect of your college grad moving into your basement) are much scarier. Twenty-eight percent of Millennials have had to move home with their parents after college due to financial hardship. You’re not doing your son or daughter any favors by advising him or her to delay the decision on a major.

It’s not all on you as the parent either. High school curriculum should be helping students understand real-world applications for what they’re learning and guiding them into career paths for which they’re well-suited. “Career day” doesn’t cut it anymore.

And, I bet if you asked the average 10th grader which careers will have to use algebra on a regular basis, they couldn’t tell you. We need to be showing them why the subjects they’re studying matter and how they apply to careers they may be interested in pursuing. We need to expose them to careers they might not even realize exist.

Even if your kid doesn’t definitively choose a major by the time they graduate high school, starting these conversations early can only benefit them.

Lydia Frank is editorial director at PayScale.com, a site that provides on-demand compensation data and software to employees and employers.

MONEY Student Loans

Why Refinancing Your Federal Student Loans Could Cost You

When you consolidate with a private lender, you can lower your interest rate. But in exchange you lose valuable consumer protections.

People with federal student loan debt now have a few options to lower their rates with private consolidation loans, but consumer advocates warn they could be giving up vital protections in doing so.

Royal Bank of Scotland Group Plc’s Citizens Financial Group recently expanded its student loan refinancing program to include federal as well as private student loans. The bank joins two much smaller, peer-to-peer lenders, SoFi and CommonBond.

All three lenders say they counsel potential customers about the consumer protections lost when federal debt is refinanced into private loans. Those protections include access to federal income-based repayment and forgiveness programs as well as generous forbearance and deferral options.

“Those are very important rights,” says Persis Yu, staff attorney for the Student Loan Borrowers Assistance site run by the National Consumer Law Center.

Yu questions whether the borrowers targeted by these lenders understand how vulnerable they are to financial setbacks such as job losses.

“A lot of people think they’re not ever going to default,” Yu says, “but there are very high delinquency rates on student loans.”

Who’s getting loans

So far the lenders are wooing the lowest-risk borrowers: graduates with steady jobs, good credit and enough income to pay down their loans.

CommonBond, which has refinanced about $100 million in student loans so far, restricts its prospective clients even further to those with business, law, medical, or engineering degrees, says Chief Executive Officer David Klein.

The lenders tout variable rates that start at less than 3%. Fixed rates can be as low as 3.6% at SoFi and Common Bond, while Citizens’ lowest is 4.74%.

By contrast, current interest rates for new fixed-rate federal Stafford loans are 4.66% for undergraduates and 6.21% for graduate and professional students. Borrowers with older federal debt may have rates as high as 8.5%.

While the best rates on consolidation loans are reserved for the most creditworthy borrowers, Citizens has been able to lower its typical customer’s rate by 1.5 percentage points when refinancing private loans, says Brendan Coughlin, the company’s president of auto and education lending.

A one-percentage-point decrease corresponds to annual savings of about $50 per year on each $10,000 of debt, says Mark Kantrowitz, publisher of Edvisors.com, a college finance education site. The savings generally are not enough to make it worth giving up income-based repayment and forgiveness options, he says.

Borrowers who struggle to pay their debt are typically locked out of refinancing due to lenders’ high underwriting standards.

“We’re approached by people who are having a really difficult time with their payments,” says Mike Cagney, CEO of SoFi, which so far has refinanced about $1 billion in federal and private loan debt. “We’re not a good option for them.”

Parents may benefit

Parents who have federal PLUS loans, however, might consider refinancing into a private loan if they can win a large-enough interest rate reduction, Kantrowitz says.

Parent PLUS loans are not eligible for income-based repayment options or forgiveness, although they still offer up to three years of forbearance and deferral options. Private consolidation loans typically offer up to one year of forbearance.

“Generally, refinancing federal parent PLUS loans into a private consolidation loan might be financially beneficial if the interest rate will decrease by at least two percentage points and the borrower has at least $20,000 in [such] loans,” Kantrowitz says.

“Students, on the other hand, should still not refinance their federal student loans into a private consolidation loan.”

Parents with the high credit scores and solid incomes necessary for a private loan consolidation presumably would be able to make informed decisions about the necessary trade-offs between a lower interest rate and the loss of federal education loan benefits, Kantrowitz says.

A proposal to lower rates on existing federal student loan debt died this summer when Senator Elizabeth Warren, a Massachusetts Democrat, failed to get the 60 votes needed to advance her bill. The legislation, which would have allowed people with federal and private loans issued before 2010 to refinance at 3.86 percent, received 56 votes for and 38 votes against it.

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