Case Study: $30,000 in student debt

[tcast5000]

Hi Im Tcast and I just recently found out about Mr. Money Mustache a week ago and I am in love with this blog.  I am still a student at the university studying religious studies ( I originally wanted to be a chaplain and still would like to do that work later in life).  For a long time I didn't know what to study until I took a philosophy class and fell in love with it.  I've spent a lot of time improving my character and now being $30,000 in debt in student loans later its time to focus on money.  I am almost 30 and had a lot of setbacks along the way in my student career, including dealing with bipolar disorder.  I know I started late, really late in saving money and virtually have no savings and only a job that is on call but I am here to learn, look for more/better paying work, and looking to kill these loans that I have within 2-3 years.  Then afterwards to start saving like crazy.

After being out of work for 3 years due to my mental illness I found a job that I enjoy and just have been working for a couple of months.  It doesnt pay much just 12 an hour on call working with kids at various elementary schools but it is really rewarding.  I want to work with disabled kids in particular blind kids and am currently looking into different schools that teach how to work with blind people. I dont want to take out any more student loans though. I want my work to be rewarding and something I would do for free even if I got payed a lot of money for it.  I love frugality and always considered that my way in life and felt that it was the best way to live life for me.

 Im in a bind with this 30,000 in debt and I still have one more year of school to go, I dont have to start paying until one year from now. Dont have many major expenses, no kids, not married, own a used car which I dont drive much, had to move back in my parents due to my mental illness, I'm learning how to grow my own food, finding the value in hard work, I dont like to spend money, I dont get coffee at starbucks, dont drink, dont smoke, ride an exercise bike for exercise and occasionally spend money on a movie here or there, and I want freedom.   If there are any suggestions I am open to it. Please help me out. Here are the details.

Income: 12/hour part time 4 hours per day- $12,000 a year ideally but on call so this is an approximation
Expenses: Car insurance at $20 a month,
                  groceries free,
                  rent free, (had to move back in with parents due to mental illness)
                  No cable
                  Internet $30
                  Phone    $30
                  electricity about $20 per month give or take on usage in home
                  Entertainment: movie once per month at @ $10 each
                  Total: $110.00 per month
Debt: $28,000 @>5% each loan (Hair on fire! I know) (dont have to start paying until 1 year from now)

Assets: $250 in one savings account,
             $2400 on a used car 10 years old Nissan Sentra

I know Im in a bad situation here just looking for some constructive advice not any bashing please.

[amyable]

Since you have a year left before graduating, have you considered speaking with someone in the education department of your school about possibly picking up a teaching certificate before graduation.  Depending on the undergraduate coursework you have and your state requirements, you might be able to finish most of the coursework for teacher certification before graduating.  Just a thought! 

Also  could you substitute teach with your current work schedule?  Even if you only sub 1-2 days a week, it's a great way to build your resume and make a few extra hundred a month!

Good luck on your journey!  I came to MMM a few years ago when I thought paying our debt was  hopeless, and we're already about halfway through.  Your best bet is to increase your earnings. 

[former player]

I don't think you are in too bad a situation.  You have your parents support and free board and lodgings, and your illness is well enough controlled for you to get a college education which is personally worthwhile.  You are developing a healthy and sustainable lifestyle.  That sounds to me like a pretty solid position from which to look to a better future.

Congratulations on your new job.  I hope you've worked out a way to deal with the call so that it doesn't start interfering with your college classes.  An income of $12,000 while in college is pretty good.  No debt other than the student loan is also good.

On your expenses, I don't see anything for car maintenance and gas, but if your use of the car is low these are presumably low as well.  Generally, your expenses are pretty minimal.

I think your priority at the moment should be to build up an emergency fund.  I can't really tell how much you should put in it: perhaps enough to sustain you for 3 months if you had to live on your own paying rent and groceries, and/or to pay a rental deposit/repairs for your car?  After that, I would use any spare income to limit your need to take out student loans for your final year of college, and once your student loans become due, tostart paying those down as quickly as possible (there is no point paying your student loans before they become due).

amyable has a good thought about speaking to people at your college about potential career paths and how the classes you take could feed into professional qualifications: there should be careers advisers who could help with this. 

I understand that you want rewarding work.  But please be careful about "working for free": the labourer is worthy of his hire, however little that may be, and if you are doing a good job of work you are entitled to be paid for it!  Also, you cannot properly look after other people until you have properly looked after yourself, and that does take at least a minimum of earnings.  The areas of work you are interested in, although rewarding in many ways tend not to be high paying, so even when you are working for money you will not be overpaid!

[Argyle]

It sounds as if you're in a good position.

My understanding is that there's high turnover in low-level jobs with handicapped peole, because of the low wages.  But that's good for your situation because you may be able to get one pretty quickly upon graduation.  I'd urge you to work in that area for a while, working your way up the chain, before going back to school (if necessary) to get any more credentials.  It may be that you won't need any more credentials.  Sometimes those positions are live-in, which means you'd also save on rent.  If you make contacts now and get to know what the local opportunities are, you'll be in a good position when you graduate.  So, well done.