Live Better by Centric FCU
Live Better by Centric FCU
Are Student Loans Really Worth It?
On this month's episode of the Live Better Podcast, we chat with Centric's very own AVP of Operations to discuss whether or not student loans are really worth it.
Welcome back to another episode of the Live Better Podcast by Centric Federal Credit Union. I'm your host and centric social media and marketing specialist, Emma Baes. I'm so excited you're here today on this podcast. We regularly post new episodes where I'm joined by guest to chat about all things living better and finances subscribe today. So you never miss an episode. Today we are joined by Kristen Chak, who is Citrix's AVP of operations to chat about whether or not student loans are actually worth it. So for some of our listeners who may not know who you are, tell us a little bit about yourself and what you do here at Cent. Yeah,
Speaker 2:Like you said, I am Kristen Shambo, the AVP of operations at Cent. I have been here for about 12 years and I do a little bit of everything. I just make sure the place keeps going every day. Yeah. And the members are served<laugh>.
Speaker 1:Yeah, and you've helped me a lot in marketing too.
Speaker 2:Yeah. Yeah. That, well my degree from U L M is in marketing, so I have a little bit.
Speaker 1:Yeah, so it worked out
Speaker 2:Expertise there. Very, very little, but a little<laugh>.
Speaker 1:Okay. Well so college and you just talked about college is a major decision. Student loans have been a big topic lately. Are they gonna be forgiven? They're not. They are. It's just been all over the place lately. So, um, do you think that everyone needs to go to college?
Speaker 2:I don't necessarily think everyone needs to go to college. I think everyone needs to be educated. Yeah. Whatever that means for them and whatever career path they pick. Mm-hmm.<affirmative>, I think education is key. I don't necessarily think college is the end all, be all answer for everybody.
Speaker 1:I completely agree. Yeah. Um, I actually wanted to share a statistic that I found, so lemme make sure I read this right. Two thirds of students graduate with student loans with an average average balance of$30,000, which I thought was super high.<laugh> with the average salary only starting around around 50,000 here. Do you think that's a reasonable investment?
Speaker 2:I do. If you're picking a career path that is gonna have steady continual growth in your income. Mm-hmm.<affirmative>, if you're picking one, say 50 is the average income when you come out. That's not necessarily gonna be what you and I make when we come out. That's just the average across the us. If I'm gonna come out making 50,000 and then I have a job market that's very stagnant with income increases, so I'm only gonna stay at 50 for the next 10 to 15 years, that's not necessarily gonna be worth it to me in the long run. So I think really figuring out what you're doing with your career and how that industry's increases in income. Look over like the last 10 years to the next 10 years. Mm-hmm.<affirmative>, do you have a path that you're gonna grow? If so, yeah, great. Go for that student loan, but if not, is that student loan and that education coming from the college gonna be the thing that gets you to your next spot. Right. If you don't like spending the money now for the income, you're gonna hate paying your student loan bill each month. So you gotta have a little passion in what you're doing and think the money's worth it.
Speaker 1:Yeah. And I think that's kind of where like research comes into play. I mean, I feel like I just went to college because I, I grew up being told that was the way together
Speaker 2:You had to go to college, the right,
Speaker 1:The right thing to do. And I didn't have a clue what I wanted to do. I mean, I've tried so many different things<laugh>, but, and I, I think just being a, a former teacher also mm-hmm<affirmative>, like pushing that at the middle school and the high school level. Like getting these kids out into the community to see what other people are doing in their career. So they have some kind of an idea like I for sure don't wanna do this. Mm-hmm.<affirmative> or this is kind of interesting, maybe this is like worth looking into before they ever get to college so they don't waste a year not having a major and not knowing what they wanna do when you know they graduate. Yeah. And, and you know, that's another waste of money. Yeah.
Speaker 2:I think I had five or six majors within my first two semesters of college cuz I wanted to be everything, but then I also did not like going to school every day. So I was like, I don't want to have one that's gonna keep me in college forever. Right. So you gotta figure something out. I also grew up with being told college was your answer. Exactly. College is gonna be your answer. But I also grew up with a dad that does not have a college degree mm-hmm.<affirmative>. But he is a senior executive for a plastics company. So you can get to the top without that college degree. So being shown that early I think really sets you up for, is this the right path for me? Mm-hmm.<affirmative>.
Speaker 1:Yeah. I completely agree. So like for me, I have two degrees and I don't use either of'em<laugh> and I've still paying for one<laugh> mm-hmm.<affirmative>. So I'm just kind of, I don't necessarily raise my kids the way that I was raised. Like, you have to go to college. It's the answer for everybody because just like I said, I taught for six years and it, that is not the case. Yeah. Like everyone is not meant for college and that's not the answer for everybody. Um, so, you know, I definitely keep that in mind with my kids. Like one I can tell probably. And then my other kid I can tell probably absolutely not
Speaker 2:<laugh> plan for both. Yeah.
Speaker 1:I mean, and so just being open to, you know, different things for, for different people. Um, cuz like I said, I went cuz I thought I was supposed to and now I have student loans and two degrees that I don't use<laugh>. So, you know, I could have definitely done that a little bit better. Uh, so do you have student loans? If you, if you do, do you regret that<laugh>?
Speaker 2:I do have student loans. Um, I don't regret my student loans because I definitely could not have paid for college outside. Like I babysat when I first started college.<laugh>. That's not paying the bills. No. And, and then I started part-time here and while that was income, it still wasn't be enough to pay my way through college. Mm-hmm.<affirmative> and my parents made it very clear that education was a choice and not a privilege. Mm-hmm.<affirmative>, like it was a choice. You had to do it. And it wasn't something that they were gonna give me just because they had the money to mm-hmm.<affirmative>. So it was my money regardless<laugh>. Right. Um, I couldn't have done college without it. I don't necessarily think that I should have taken out as many student loans as I took out mm-hmm.<affirmative> because they sit here and they give an 18 year old and they're like, Hey, you can get$5,000 right now for your college. You only really need 1300, but I'm gonna give you the option of five. Yep. Which one do you wanna take? Well, I'm 18 and I'm like, I want the five. Exactly. Like, yeah. Let's see what I can do with that extra money.<laugh>, I can go have a life while I'm in college and I'd have to get like a real job. Mm-hmm.<affirmative> or a part-time job that really gives me a lot of income. So I think educating kids to realize that you don't have to take the full amount that they offer you in those student loans is really important too, because you just need to figure out what you need for tuition and books and then cut it off. Cut it off. You don't need anything past that. No.<laugh> I regret taking the full amount. I don't necessarily regret having the student loan in the first place.
Speaker 1:Yeah. I, I agree. I'm about, I'm about to put my husband's business out there,<laugh>. Okay. So he did that and we paid on those stupid loans mm-hmm.<affirmative> for years and years after we got married because it was the same situation. Yep. You know, like I don't need this much, but if you're gonna offer it to me, yeah. I'm gonna take it. I'm gonna take it. I'm super young and I don't know any better. Mm-hmm.<affirmative>, so I'm with you on that. Like, don't do it. Mm-hmm.<affirmative> just don't cover what you need and then move on. Yep. Um, do you know if there are any other options out there for students who don't wanna take out a loan? Like maybe payment programs at the, at the colleges or grants or things like that?
Speaker 2:Yeah, so I did a little bit of research on this one. You did? So I had some factual information. Okay. And not just what I remembered from when I was in school. So on the college side there are tuition payment plans that you can do with your universities. I looked into it and it, from everything I've read, even from our local universities to the ones that are online or outside of the state, you can basically pay for one semester over two years. Oh. And when I looked at the um, revenue site, it even said that you could file some of those payments on your taxes too. So get a little bit of a tax break Okay. In there when you're doing it. So colleges do have tuition plans, everyone's gonna be a little different. So definitely get with your financial aid office at your local university or community college, wherever you're going to figure that out. There are also all kinds of crazy grants and scholarships you can apply for. There are some that you wouldn't even think existed. We serve Louisiana and Arkansas. So I went to those two specific sites. Louisiana Office of Student Financial Assistance had over 20 grants in scholarships listed and they updated their site monthly. And then the Arkansas Division of Higher Education had over 15 listed and it looked like they updated monthly too. So you can find your scholarships and your grant offers there. Google is your friend. So kind of just look at it. Mm-hmm.<affirmative>, see what's going on with Google. And then of course, let me do like a very tiny plug for Cent<laugh>. I was
Speaker 1:Waiting on
Speaker 2:It.<laugh> Cent does have the BC Foundation scholarship. We have two people that were very important to very important people to the centric family that unfortunately passed away way too soon. So there are scholarships in their honor that centric offers. It has been around since 2012 and we have given over$70,000 to local students because of those scholarships. So if you are in our market, we would love to have you as a member and we would love to try and help you with your college and apply for that scholarship. I know that our scholarship window ended last month for this year. Mm-hmm.<affirmative>, but if you follow us on social media, you'll see when our next little window opens for the next set of scholarships. That's
Speaker 1:Right. Thank you for that.
Speaker 2:Yes.<laugh>,
Speaker 1:Um, I kind of wanted to talk about trade school a little bit too because um, as when I was a teacher, I had, so in a lot of high schools I've learned throughout Louisiana, I know have this where these kids starting in like their 11th grade year can start taking these elective classes mm-hmm.<affirmative> like welding or you know, like pre-nursing classes, things like that. So I have one student in particular that stands out and he started taking welding his 11th grade year. Took it again his 12th grade year. So two years of welding mm-hmm.<affirmative>. Um, and when he, and, and I think a little work in the summer too, but when he graduated high school he like already had a certificate and he was like, miss baes<laugh>, I'm starting out making this after graduation. Like already had a job, job lined up and everything and he was making more than me. Yeah.
Speaker 2:Like, like how do you, and I was like, oh my
Speaker 1:Gosh. Like I'm super proud obviously, but like people need to know about this stuff. Mm-hmm.<affirmative> because like we said, college is not for everybody. And when there's options like this available, you have kids who immediately after graduation are making money mm-hmm.<affirmative>. So you're not only are you making what could potentially be more money, but you're making it a lot sooner too. So, you know, and the same I said like for nursing and LPNs and stuff like that, um, those classes are out there and available to most high school students.
Speaker 2:Yeah. So my brother actually teaches at a local high school and he has a lot of kids that on the path you get to about 10th or 11th grade and they're like, Hey, do you plan to go to college? Mm-hmm.<affirmative>, I think honestly maybe half of his students don't because they know they wanna go to trade school. Right. Which is great. They're fully educated, they're ready to go. Mm-hmm.<affirmative>, they know what they wanna do and he had the same exact experience where he's had students graduate that are already making more than him because of that trade school experience. And let's be honest, you have an electrician come out to your house, do you want an electrician that went to college for four years and never touched any kind of electrical wiring? Or do you want someone that went to a trade school and only specialized in that one field the whole time? Mm-hmm.<affirmative>, I'm gonna pick the trade school guy every time. Absolutely. So it's really just knowing what you wanna do and where you're gonna get that specialty and that education for you.
Speaker 1:And I mean, those jobs are pretty safe too. I mean Yes. Trades are not really sourced out. Mm-hmm.<affirmative>. Like they're always gonna be needed. And when you can start when you're 15 or 16 years old and be almost ready to go by the time you, you graduate, I mean that's, that's amazing to me. Yeah. I agree. Um, and you know, sometimes a better option than college for a lot of kids. Mm-hmm.<affirmative>. Um, so is there anything that we haven't talked about that you wanted to add?
Speaker 2:I guess the only other thing that I would point out that everyone is so used to student loans being straight through the government. Mm-hmm.<affirmative>. So if you're gonna get a student loan, you're gonna get it through a government. If you're going for something super small or you have money tucked away, your family's saved for you, you have some kind of inheritance, whatever it is, consider going to a local credit union or a bank for a smaller loan, you're gonna pay it up front versus when you graduate, but you're also gonna graduate without any debt. Right. So you don't necessarily need to get that student loan from the, uh, department of Education. I was like, who is it that does them Department of Education? You don't necessarily have to get one through the government, you can go to local FIS if you need to. And so really figure out what you need and how much you need and consider that versus a government loan. That way you're not in debt when you graduate.
Speaker 1:Right. And I think it's, you know, they market it, you know, here's your loan mm-hmm.<affirmative> pay it back six months after graduation. Yes. And it sounds super good until six months after graduation<laugh> and
Speaker 2:You had to make that first payment
Speaker 1:Payment and paying on it for like eight to 10 years mm-hmm.<affirmative> and, and you know, I think paying like through a local financial institution and yeah. You're gonna go ahead and start paying must be so much better for you in the long run if you can do it like that.
Speaker 2:Yeah. And you don't have interest building up. Right. So that's a big thing with your student loans. They're either subsidized or unsubsidized and the sub ones are your interest is covered by the government or your school. You don't have to worry about it, you're good. But you have to qualify for some serious financial aid to fall into that bucket. Mm-hmm.<affirmative>, um, I was not one of those lucky people, so I was an unsub for my loans and that means my interest built the entire time I was in school. Mm-hmm. So my first two or three years worth of student loan payments were just hitting that interest. I never touched the actual principal balance of my loan until like that third year of payments because of that. So really knowing what you're signing up for too is big to know am I paying for 10 years like I think I am or did I just sign up for 25 years a house note? Did I just sign up for a house note basically? Yeah. To go to college for four years. Yeah. And
Speaker 1:A lot of these kids don't know that. And the thing is a lot of their parents probably don't know it either. I mean, this is not just super widely known information mm-hmm.<affirmative> unless you're doing your own research or like, you know, work around that type of thing. Yes. So people just don't have a clue.
Speaker 2:No. Especially if you're the first one to go to college in your family. Mm-hmm.<affirmative> the people before you didn't have to deal with this. So you're the first one going to college, but also finance in college. Mm-hmm.<affirmative>. So having people that you can reach out to to really understand what's going on the financial aid office at your college, your local banks for your credit unions. Ask someone so you're not going into a blind. Right.
Speaker 1:I did wanna, before we wrap up, there was one more thing I wanted to talk about mm-hmm.<affirmative>. So another option that, that just popped into my head. So this is how I got my master's degree that I don't use<laugh> by the way, but for,
Speaker 2:But you still have it
Speaker 1:For those who, you know, know exactly what they wanna do and they're doing it. This is a great option. So there are a lot of schools online now where you can go at your own pace and that's what I did. Mm-hmm.<affirmative>. So I had just started my master's degree when Covid hit and I was home a lot. So I actually got it done pretty fast in around a year. So that's an option too. I mean, the faster you can do it, the less that you pay. And if you have time to do it all quickly, you're gonna save money and you're not gonna be stuck in a college for four years or however many years. Yeah. So those are options too. And they're accredited. I mean the degree is the same no matter where it comes from, you know. So, uh, that's an option too that I wanted to bring up. Yeah.
Speaker 2:And you made me think of something you can also ask your employer, like what options do they give for you to go to school? School? I know I'm not a teacher, but I have teachers in my family. Some schools will pay you to go back for that master's. Yes. So you don't even have to come outta pocket, but you have to be willing to ask the questions. So
Speaker 1:Yeah, you're right. And that reminds me,<laugh>, um, when I first started teaching the school was actually gonna pay me to go get my masters. I mean I had, and there's usually some sort of a string attachment mm-hmm.<affirmative>, it's all about if you're okay with that or not. Yeah. But, um, most of them want you to sign a certain year contract. Like you have to stay here for however many years if we pay for your degree,
Speaker 2:Your investment. Right. Yeah.
Speaker 1:But you know, that's always an option too, you know, I mean a free, a free master's degree is a pretty big deal. Yeah. But, um, yeah, those are options too. So a lot of employers offer incentives and stuff like that. But, um, lot of good information about student loans. Is anything else you wanna add before we wrap it up?
Speaker 2:No, I, I, I think that covers everything I you say about student loans. Okay.<laugh>.
Speaker 1:Well thank you so much Kristen, for being here today. I hope all of our listeners will a, were we're
Speaker 3:<laugh>.
Speaker 1:Okay. Thank you so much, Kristen, for being here today. I hope all of our listeners were able to learn some valuable tips for taking out student loans. Thank you for listening to our podcast and tune back in next month for another episode of the Live Better Podcast by centric Federal Credit Union. Don't forget to subscribe on your favorite podcast platform to ensure you never miss out on helpful tips like us on Facebook at Cent Federal Credit Union, and find us at my centric on YouTube, Instagram, Pinterest, and TikTok. You can find more information about today's topic and more@mycent.org cent is federally insured by the N C U A.