Nikki checks back in with Alisha from the “All Debt, No Degree” episode. Alisha has transformed her relationship with her loan repayment and tackled the student debt monster that previously controlled her life. Over the last two years, Alisha has faced the details of her loans head-on and refinanced her loans with a change of jobs and city.
Alisha shares her reflections and lessons learned as she worked on rehabbing her finances and her attitude toward taking control of her debt. Her loans are now annoying rather than all-consuming.
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Transcript –
Nikki Nolan: I’m Nikki Nolan. And this is Matter of Life and Debt. A show about people in the United States and their student debt. Today’s episode, All Debt, and No Degree, two years later.
Alisha and I got together again two years after the fact, and we have discussed what has happened since then. She has taken control over her debt, has good credit, and now knows how much she owes. This is her updated story.
Welcome to the podcast again!
Alisha: I’m happy to be back. This time with better news than maybe the first time.
Nikki Nolan: Since we last talk, which was about two years ago, what have you been up to since we talked?
Alisha: Well, first geographically, I live in New York now, which was a lifelong dream of mine. And I have a new job too. So before we were at the same company and now we’re at different companies, but I’m at a company now that I get paid pretty, fairly for my work. So that has helped obviously a lot in paying back my debt.
Nikki Nolan: That’s amazing. The last time we talked, you didn’t quite understand how much debt you had. You were like, I just pay it, it just comes through and I just pay it. I don’t know what my debt is. What have you learned?
Alisha: I think that after our conversation, actually, I was sort of, I think, you know when you start talking about something, you realize that it’s probably not great that you don’t know how much debt you owe and that you’d just kind of pay things and you have no control over it. So I think, actually, the conversation was sort of therapeutic in that sense where I had this realization that I really should really take control of that. And, I remember you also showed me that spreadsheet that you had put together, where you were like, oh, these are all the financial institutions and this is my debt, this is my rate and all this stuff. And so that was actually, kind of an inspiring spreadsheet where I was like, I should actually do this, perhaps.
And I think for so long, I was so afraid of my debt. I didn’t want to look at the numbers. I was like, the numbers especially when you’re starting out, you’re 18, 19, and you start to look at this debt where you’re like, you know, $50,000, like, how do I even get that money when you’re getting paid $5 an hour? So, I think now with sort of career progression and just salary increase, I felt more compelled to sort of take that on. And so since we had talked, I had put together the spreadsheet where I documented everything and I was like, oh, this is actually not that bad. It doesn’t seem unmanageable.
And then I started looking into refinancing, so that sort of helps me have a lot more control over what I owe and an understanding of what I owe on a monthly basis. And I also get a lower interest rate. Right. So I think that actually helped me a lot to, really understand what I owe and also just have control over what I owe.
Nikki Nolan: Last time we talked, you didn’t quite know what was going on with your loans. You had loans in all different places. You didn’t know the interest rate. Did you end up refinancing your loans?
Alisha: Yeah. I, actually, I have the document up right now. Let me just look at this.
Nikki Nolan: Tell me what they were. Cause now I’m interested because you didn’t have any understanding. So tell me about your loans.
Alisha: So at some point, I have one private loan, which I think was so killer for me. And it was at a variable rate, at 11.25%. So that was the highest interest rate, student loan. And I remember when I was looking, it was sort of I remember like a panic loan that I was like, oh, I really have to get a loan so I can go to class again in the next semester. So I remember taking that loan and being like, I’m not going to do much research into this and just try to get the money that I need. And then I have you know, the Sallie Mae, which is actually the interest rate was much higher than I thought it was 10.75%. But it’s at a fixed rate and I paid off Sallie Mae when I looked at my, my amount, remaining amount, it was a thousand dollars. I think I just tried to pay that off that month or something. So I don’t, I don’t owe Sallie Mae anymore. And then there’s another, I don’t know if this is a bank or not, but Great Lakes. It’s, I think my public loans.
Nikki Nolan: Great Lakes is the servicer for a Federal loan.
Alisha: Okay. Yeah. So, but that was my lowest interest rate. I got 5%. So yeah, I was able to refinance everything, and, actually, my monthly payment was $775, which I had no idea. Honestly, I was just paying $300, $500 here and there. Which is an embarrassing thing to say at this point in my life. But yeah, so I was paying $775 altogether and now I pay, I believe it’s around S400 a month by refinancing.
Nikki Nolan: What is your rate now and who are you refinanced with?
Alisha: I did a good amount of research. I used a product called NerdWallet and I was looking up student loan refinancing options. And Citizens Bank was the one that came up as one of the better ones. Especially, with some, I think for someone who was kind of starting out doing refinancing and paying back and, my rate now is 6%.
Nikki Nolan: Oh, wow. Is it at that rate because you have bad credit? I can’t quite remember.
Alisha: I actually also worked on my credit and have a very good credit score now, but at the time that we talked, I had bad credit. And, I don’t, I think it was just a lack of really taking any control over my credit. But yeah, it is, it is, it’s slightly higher than the the, what’s the federal, Great Lakes is, I think it’s called. But I felt it was overall lower than, you know, what I was paying average-wise. So, I ended up accepting that 6% rate.
Nikki Nolan: What are some of the things that you did to get your credit to be better?
Alisha: I went through the same process of refinancing my credit cards. I also consolidated everything and made it just one payment a month. Cause I was also looking at my interest rates for my credit cards and, they run at you know, anywhere from 15% to like 20%, 30%. So I refinanced and my rate now is 12.5%.
Nikki Nolan: Both your loans still seem really high to me, because I refinanced my loans and I was in the process of refinancing my loans when I talked to you last time, but I refinanced and I got 2.55%.
Alisha: Oh, wow.
Nikki Nolan: Was there anything that was surprising for you in the last two years? With regards to your loans that you learned?
Alisha: Yeah. I was actually surprised at how easy the process was refinancing. It just seemed impossible. I mean, for me, it was just an overwhelming and impossible monster that I couldn’t deal with. So, just having the mindset of managing it really changed my approach I think. I was just, I was surprised actually at how easy it was. I mean, the lump sum that we’re talking about with the private loan, just came in my inbox. And next thing I knew, I was like, oh, I’m $20,000 richer that I can now just use to pay that back on my credit cards. But all of this stuff that I thought was just an impossible thing, became really easy. Yeah, I mean, honestly, I think it was just doing that Google search of just how, how to pay back your student loans. And, a lot of resources were folks like me who had bad credit. I felt the bad credit was never going to get me anywhere, even towards being able to repay my student loans in a manageable way. So I felt obviously there are really great options for people who have good, good credit. But there are also options for people who don’t have great credit. But, being able to refinance actually put me on the path to having good credit. So I feel set up for success from that perspective.
I mean bad credit. I don’t know if you’ve ever had bad credit, but it’s really painful. I felt I couldn’t even live in an apartment without having a roommate or someone who had good credit. Right? I couldn’t, I couldn’t even live somewhere because I was I didn’t have the credit.
So, that was always just kind of a cloud over my shoulders or my head or whatever the thing is called. But, I felt yeah, it was just, a better, a better life for myself and a more financially independent life.
Nikki Nolan: Do you have an image in your head about what your debt is?
Alisha: You know, in horror movies, when you look at the medicine cabinet and there’s it’s a, it’s a mirror and you open it and then you close it and there’s someone there and it’s like, ah, it’s like that, for me. But I feel there are less moments where I feel scared.
Now I’m not scared anymore. It does feel like something that is just, that does follow me. You know, honestly, that’s kind of what I’m getting with that metaphor. But, it doesn’t feel like an evil spirit anymore. It feels just like a person that follows me around. Not a friend, definitely not a friend.
Nikki Nolan: It’s really fun listening to the thing, the thing visualized. For me, I just imagined that I was walking down a very, very dark hallway. And at the end of the hallway, I knew it’s going to get punched in the face by a very strong thing. But it was just the same anticipation. And now that I’ve paid off my debt, I don’t know. I thought I was going to feel better, to be honest, I thought that I was going to feel some relief and that there was going to, I was going to feel free. And I do feel free, but I think I need to process some of the trauma of this persistent need to keep my head above water and just treading water to stay above the debt.
Alisha: I mean, I think there’s a lot to learn too from seeing how your parents dealt with debt and money. I feel my family is split into two. My mom and myself, I think, want to deal with our debt and want to be able to be financially independent. And the other side of my family, my dad, and my younger sister, I feel they’re so drowning in debt they just continue to drown.
And there’s just kind of two sides of my family, that kind of just persist. I do feel incredibly lucky to have a job that could help me pay back these student loans. I mean, you have to have extra income, right? Like income that outside of everything else you pay for your immediate needs.
And I felt I had been operating on immediate needs, like just salary. And now that I can get paid a little bit more, I can actually feel I have excess money that I can actually put towards student loans and pay more than I want then the minimum and all these things.
Nikki Nolan: Do you want to add anything to your story? That’s different now that within the last two years,
Alisha: I mean, the only thing different about my stories is that I have a different job, or that I live in a new city, but, I think sometimes living in a new city can also reset your expectations or reset who you want to be. And I think that sort of helped me, I had been wanting to move to New York for a very long time.
And I think I had just been feeling really stuck for a while and probably just depressed, which is why I didn’t even want to deal with my financial situation. And so I think having moved to a new city, I was like, oh, this is a new start. And so it sort of pumps you up for trying to be different, trying to build better habits and all these things.
I think it’s just been so helpful to, I mean, talk to you about it. It’s honestly such an awkward thing to talk about. And I think, I mean, it’s probably the point of your podcast, but it’s just been really therapeutic to just talk to you about it and hear your story and to hear that. I mean, even hearing today about how your interest rates are much lower than mine, I’m like, oh, wow. I probably should have pushed a little harder. You know, all these things that you just don’t have, any knowledge, you don’t talk to people about this on a day-to-day basis, so you don’t know what to expect. So yeah, it does kind of bring it out of the woodworks a lot more.
Nikki Nolan: Yeah, the point of this for me right now is to just understand and learn more about student loans, but also to demystify and take some of that monstery and weighty-ness out of the darkness that is student loans. Cause yeah, people who might be talking about it in different places are complaining about it, but I feel hearing actual stories is really, really helpful.
Not just getting five tips and tricks that you can do to get out of debt. It’s sort of well, maybe I can relate to this other person and understand through their story. First I’m not alone, because there are 44.2 million, I think, or maybe even more at this point, people who have student debt, so we’re not alone, but we need solutions.
And so I think my goal is trying to figure out where the problems lie. What kind of problems are out there? I’m just in learning mode.
So I’m going to ask you a question, I asked maybe last time, do you have any new advice because of what you’ve learned in these last two years?
Alisha: I don’t know. I think if I’m getting a little bit like, oh, I’ve been going to therapy for years now is just not like, your worth is not, built up in like where you go to school or what you did in school. And it’s really just a lifelong journey.
So don’t let money sort of destroy your life. and don’t let some sort of, like societal opinion about where you should be in life at that time, determine your finances and your life.
So that’s maybe for college students or high school students.
Yeah, that also, I don’t know. Like I think from the first time we talked, I think I would be seriously, consider going to a community college, at least for the first two years to get your general education and don’t pay so much money at a private school, especially if you know that you’re going to be putting yourself through school.
It’s just, I don’t feel it was worth it at all. And I think that there are also alternative methods of education now, online education, that just is a lot less expensive than some of the, just how much tuition is for private schools. It’s honestly, like I think about, like what a racket. I wish I would, if I knew what I knew now, I would never go back to the private school.
So yeah, I just, I would just tell him, I tell myself to really think about what $50,000 means last semester, right? That’s versus $5,000. And yeah,
Learning doesn’t just start and end during college. You can take your time to figure it out, whether you want to go to college or whether there are other ways to learn the things that you want to learn, especially with the internet.
I don’t, I don’t know if, I don’t know anymore if college sort of the way they should do things. I do think that there are alternative ways to get to a place where you’re happy and you have a career. And it’s not through a very expensive school.
Nikki Nolan: Yeah, Google took away the requirement for a degree to work there.
Alisha: Yeah. I mean, I just, some of the smartest people that, I mean, we’ve worked with are not necessarily people who went to some fancy school. All of that has just been like completely demystifying. Like for some reason, coming out of high school, I thought that if you don’t go to Harvard, like nothing matters type of, I mean, I obviously didn’t go to Harvard
Nikki Nolan: We watched too much Gilmore Girls. I really, I just rewatched Gilmore Girls and I’m like, oh this prevalence of you have to go to Harvard, you have to go to Yale. It’s super important for you to do this. And then if, I mean, I’m going on a Gilmore Girls tangent, but she, she in the return season that they did on Netflix, she was 32 years old and still was like aimless, you know? So like,
Alisha: Yeah. Yeah, no, I mean, none of it really matters. I mean, your parents can help you throw a bunch of money towards it, like go for it. But if you’re putting yourself through school, like I think that there are a lot of different options. Although, you know, it’s really easy to. I think we watch so many TV shows, teen TV shows where people will just casually go to Stanford or casually go to Harvard. And there’s no discussion on, I mean, how did Rory pay for that?
Nikki Nolan: No. So her grandma, her grandparents, we’re super-rich and they paid for it. And then her, her father, her father’s parents died and he had a bunch of money. So he ended up paying for it.
Alisha: Yeah. I mean, that’s a pretty perfect scenario. That’s definitely not the case, everybody.
Nikki Nolan: Everything is more complicated than it is shown on television. And we should definitely not take our cues from societal norms. We need to investigate, look inside ourselves to say, Hey, why am I trying to make this choice? Is it cause I’m trying to work towards a goal? Is it because I’m trying to build the dream? What are all the other things that I could do to get to that goal or dream?
Alisha: Honestly, like it’s silly to think of now, but when I was a senior in high school, thinking about where I wanted to go to college, all I was looking at was the acceptance rate. I don’t know if it was just something that my high school was just really into, like where you’re going to college but it was just about like, Ooh, what’s the hardest school that you can get into? I would definitely advise to not live by those standards anymore.
Nikki Nolan: So we’ve come to the end. this is just a quick check-in this isn’t a normal full it’ll be a mini-episode. Thank you so much for being on the show today.
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