Andy Borgmann's Blog

This week was a great week. Why? Because I paid off my $11,000 student loan. After 15 months, I had accumulated $517.45 in interest, and averaged $767.83 a month in payments. For the first time in 4 years, I have no debt to my name, and it feels great.

But I am a nerd and I didn't stop there. Now that I know exactly how much I paid in interest, I, of course, consulted my Quicken to figure out just how much college cost me.

Now there are some out there that could careless, and that's cool. Just stop reading. It's alright. But I find this fascinating and I think in the end it will have a point

For the four years between 6/1/01 and 5/5/05 (plus interest afterwards related to student loan) my expenses were as followed:

• Direct Education: $91,411.09 (tuition, books, fees, educational travel & student loan interest)
• Room or Rent: $16,198.04 (both on and off-campus housing)
• Food: $13,244.59 (board, groceries, and dining out)
• Utilities: $3,984.94 (gas, water, electricity, cell phone)
• Tithe & Non-Profit Giving: $5,030.75
• Other Expenses: $18,802.33 (taxes, travel, auto fuel, etc...)
• Total Expenses: $148,671.84

Holy cow! Direct expenses only relating to my education was $91,411.09, and once you include living expenses like eating and having an apartment/dorm the sum was $148,671.84. Now, lets see how the bills were paid:

• Dividend Income: $70.56
• Savings Interest: $173.08
• Gifts from Others: $2,365.61 (mainly high school graduation & "Charlie's travel gifts")
• Investment Income: $4,4710.44 (GE Stock)
• Mom: $5,341.54 ($5,016.54 was for Summer of '01 and Freshman year)
• Grandma Borgmann Gift: $10,000
• Scholarships: $20,275.00
• Dad: $26,500.25
• Salary Earned from Working During College: $27,698.84
• Grandma Neslund Gift: $40,000
• Total Income: 137,135.32

The income/expense difference was $11,536.42, and after you subtract out $11,000 in student loan and the $517.45 in interest related to the loan, that left a "real college debt" of $18.97.

Now, I could take this is so many different ways, and I am going to try to hit them all.

First of all, it all was worth it. APU prepared me for the real world and my profession better than any university I can imagine. Even at the stark cost of almost $150k (that's a freakin' house in Indiana), it was still worth it.

Second of all, I spent a good chunk of college complaining about how little my dad paid. Now I always say this with a disclaimer that I recognize that I am incredibly blessed in life - I cannot overstate that. But my dad was kind of "mathematical" in his approach to paying for my college. He took Indiana University's tuition (which was $12,000) in 2001. He then took 2/3 of that ($8,0000), as he figured each parent is responsible for 1/3 and so is the student. Then he divided his income in 2001 by his income and my mom's income (which came to 78.1%). He then applied this number to the $8,000 and WAM, dad's contribution was $6250.00 a year (although admittedly senior year he paid an extra $1,500 for an average contribution of $6,625). What always irked me about dad is he had this sort of "you got to earn this for yourself" attitude, but he had all of his private college and law school paid for by his parents.

BUT, all that to say, I am grateful that he contributed what he did, because I know a lot of people out there who would have loved to have had half of what he contributed, and for that I am blessed. Which is lesson number two: I am very grateful for all of those who sacrificed for my education and I do not tread lightly on the idea that while I paid more than $40,000 of my own education, there was still $110,000 that came from elsewhere.

My third point is this: debt! Debt sucks. I hate debt probably more than most (hence the reason I have no savings right now besides a 401(k) but I have no debt). But still, the average student leaving college has $19,000 in debt (and if you are in private school like me and my alumni, it is far worse).

Debt when used correctly is a good thing (school, house, etc...). But even when it is a good thing, it is still a bad thing. As talk radio host (and friend of our show) Dave Ramsey says:

Debt is not a tool; it is a method to make banks wealthy, not you. Debt is dumb. Most normal people are just plain broke because they are in debt up to their eyeballs with no hope of help. If you're in debt then you're a slave, in the sense that you do not have the freedom to use your money to help change your family tree. According to a recent USA Today article about debt, 78 percent of baby boomers have mortgage debt, 59 percent have credit card debt, 56 percent have car payments.

The point is, get out of debt as fast as you can. Don't buy into the lie of "good debt."

It was a great four years of college. It was worth the extra 15 months of paying for it, but I am very releaved to be out form under it. I am glad I can now look onto the horizon as I look towards taking my next $140k venture of buying a place (although I am still not sure if that makes sense).