MoneySmarts U: Jill’s story

MoneySmarts U: Jill’s in debt

Jill is an adult student with two daughters in college. To make ends meet, they’re relying on loans and credit cards. Learn how we tried to help her manage her situation.

Podcast transcript

JASMIN: MoneySmartsU is brought to you by IU MoneySmarts.

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PHIL: Arguably, the most important years of your financial life are your college years. The decisions you make in college can make or break your first few years in the workforce. This is exactly why you need to be money smart. Enter MoneySmarts, Indiana University’s financial literacy program for students. To begin, it’s free! Now that makes financial sense. At moneysmarts.iu.edu, you can learn how to budget, how to deal with your credit, living expenses, and student loans. You can learn how to leverage summer earnings to help you reduce your student loans. Indiana University MoneySmarts, creating a financially smart culture one student at a time. Visit us online at moneysmarts.iu.edu to learn great ways to maximize your money and wreck your debt.

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PETE: All right, Alex, we’ve got an interesting one this week on the MoneySmarts U podcast. Not only are we dealing with international students, what they have to deal with, we’re dealing with an international student who’s also a parent who has two daughters already in school. This is a doozy.

ALEX: Absolutely, it provides a great alternate perspective I think. If you’re a college student, absolutely listen in on this just to get some perspective on the different situations in college that will come up and things you will have to deal with financially. Both now and when you get older. So it’s a very interesting story. It’s a tough one but I think it shows a lot of the commitment that it takes and what you can expect. Yeah so pay attention, this is an eye opener, and meet our friend Jill.

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ALEX: All right, so we’re here speaking with Jill, talk a little bit about her situation. Jill, welcome to the MoneySmarts U podcast.

JILL: Thank you.

ALEX: So could you tell us a little bit about your situation and what you might be dealing with financially. Give us a little background, some context about what you’re dealing with.

JILL: So currently my issue is a little bit complicated, because I have three daughters. And my first two daughters are in college, and it really puts a lot of financial pressure on me. And so what I’ve done is I’ve taken two loans, and I have about five credit cards. And so that’s how come I was able to switch through to help them with their college fees, and college expenses, and everything. But right now, I’m really stuck because I’m not able to pay my minimum fees on my credit card. And it’s also becoming a little bit difficult for me to pay off my loans. And so that is how come I decided to come to MoneySmart, so they can give me a better idea as to what I can do.

PETE: Sure, Jill, this is Pete. And so as you look at your situation, is your income steady, or does your income fluctuate from month to month?

JILL: It was steady, because when I took all these loans and credit cards, I had my main job and I had a part-time job. All these problems started evolving when I lost my part-time job. And so that really became a big problem for me because then I didn’t have this extra money to be able to help me cushion myself up.

PETE: Is it possible to get another part time job or has that proven itself to be difficult?

JILL: The little problem, I don’t know if it’s a big one though is that I am an international student and so for international students, you can only work 20 hours. And you can still do nine extra hours, but with the nine extra hours you would need a letter from the Office of International Services. And before that letter is approved, whatever job you are getting should be aligned to your research, whatever you’re studying, let’s say, at the university. And so, it is really tricky to be able to get a job that really relates to your research. Otherwise, it’s always, they are not really difficult to give you that approval, but a job should be in relation to whatever you are studying.

PETE: And then, tell us about the loans that you got, were they student loans, were they bank loans? And then you took out some credit cards as well, can you tell us about that?

JILL: These loans are private loans because they are not bank loans. And yeah, they tell me they give them out mostly to students. And the credit cards, I took them as they came. Most of them are store cards though, but then they give me a lot of money on the card. And so, I guess paid around them.

ALEX: So one other quick question as well. So are you working through school as well at the same time as your daughters are? So are you working full time doing school and then having another part time job?

JILL: Exactly.

ALEX: Okay, interesting, and how old is the third daughter? Is she going to be in college soon or anywhere near that timeline?

JILL: No, my third daughter, she’s a sophomore in high school. So right now it’s like I have two more years of high school to go college.

PETE: Okay, so if are you personally getting student aid through the college as well? Because, if you’ve got two loans and you’ve got credit cards, and it seems like that’s what’s funding your daughter’s college, what is funding yours? Those loans as well?

JILL: So I have my GA-ship, so that’s the funding I get. That’s what [INAUDIBLE] grad students, so that’s about the funding I get. I don’t get any extra from the university. I’ve gone to all these offices to find out about grad students who have kids and what the university has to support grad students. But it looks like they don’t have anything in place and so you really have to just struggle through it.

ALEX: Okay so when it comes to your daughters and their college, are they paying for any amount of their college, or is there an opportunity for them to work while they’re in school to help cover some of these expenses?

JILL: It comes down again to that whole permission thing. Because, they can work, but the thing is, you know these campus jobs would not be able to really pay up your tuition. So, mom would still have to come in and support. And my first daughter, she was in a college somewhere around Indiana, but we had to transfer her to Bloomington Ivy Tech Community College because we couldn’t afford it. And it was a little bit easier on us for her to be at Ivy Tech more so when she was given the instate tuition so it became a little bit easier. Although it was still expensive, and my second daughter, she got accepted, she was in Bloomington High North, she got accepted into IU, but then, again, as an international student, we had to look for and finance it. We have to prove about 25,000 in my account before it can be effected. Finally accepted, which I did not get. And so, this other invested that she’s at right now in Michigan, they really help international students. So they give them about 85% of tuition. And so we got a loan to support, what about our [INAUDIBLE] to be able to go to school?

PETE: Do you view the situation you’re in now as a short term problem or a long term problem? Do you see this affecting you years from now, or are you just trying to get through it right now?

JILL: It’s taken me a long time to come out this way, because I thought I could just deal with it and get over it, because I’m just about to finish and just graduate. But at this point, I see that if I don’t do something about it, it’s going to keep going on and on. Because I don’t know what the future of my kids will be, in terms of just taking loans and just piling loans on our heads. And I don’t know how that is going to turn out. So that’s how come I just wanted some advice from some financial person so that it’ll clear my way for that. Cuz I see that even if I graduate and get a job, I’m still an international student and I don’t know how that is gonna turn out for me in terms of finances and supporting my kids.

ALEX: Yeah absolutely. So when it comes to-

JILL: Exactly.

ALEX: Yeah when it comes to the student loans for your daughters, when it comes to how they’re actually taken out, are you a cosigner on those loans? Or will your daughters be responsible for paying those loans back once they graduate?

JILL: So these loans that I took for them to be able to go, these first loans that I took, I did not need a cosigner. I just had to send my W2, and then my income, my monthly [UNKNOWN], [COUGH] sorry. My income from IU to this company, to be able to get information to receive these loans. And my first daughter, she took the Sally Mae loan at the previous university. We got a cousin of mine, who is an American citizen, to co-sign that loan for her. So, she is paying that because there’s this monthly payment that she has to do about $30 that she’s trying hard to do it. Because she’s got this campus job job at Ivy Tech which she doesn’t get anymore. So, she is responsible for that but, the ones that I took, I am responsible. I’m just paying those because they are in my name.

PETE: Yeah, as we look at this situation, I think the solution, not that there’s an easy solution Jill, there isn’t necessarily an easy solution at all. But, I think where we try to find some progress is as soon as your financial lives can separate back out individually, I think the easier this gets. Now you of course had to bind yourselves together in order to get the financing for college for everyone involved. But when one person’s income can support the loans that were taken out for them specifically, which seems like upon graduation, that’ll be able to happen sooner rather than later, I think that’s where this gets a little bit easier. Because if your income alone is more or less being used to support all these different loans, the math just doesn’t work. And so I think as soon as the first person graduates, this starts to get a little bit easier because that income can be used to support some of these loan. Does that make sense?

JILL: It makes a lot of sense.

PETE: How far off are we until we get to that point?

JILL: So he is about graduating next year May 2015. And so she plans to get a job after she graduates because the initial plan was for her to transfer to IU and complete her degree. But considering all these financial issues and everything, she has decided that she’s gonna take a year or at least and then work so she can support me.

PETE: And in my opinion that makes a tremendous amount of sense. And it prevents your whole situation from getting worse. Cuz right now, as we record this late in 2015, your job in your mind is got to be I’ve got to make it to May until she can graduate and get a job. Is that how you are sort of thinking about this?

JILL: Yeah.

PETE: Which you’ll have to make until May?

JILL: Yeah, mm-mh, mm-mh.

ALEX: Okay, very good. And even if it’s not necessarily a job on the path of what they’re looking for career wise and all of that. Do you think the younger daughter in school or the daughter that’s gonna be in school in a few years, would that decision change in having them work more during school, putting more hours, no matter what the type of job is to be able to help support that? Or even just take care of some expenses while they’re in school?

JILL: That’s exactly what I’ve been thinking about. Because it looks like I’m carrying all the burden, and now it’s really weighing me down. And so, luckily my second daughter, the one in Michigan, she got a campus job, so I don’t really even have to worry about her.

ALEX: Okay.

JILL: So the one at Ivy Tech, is the one [UNKNOWN] that I’m looking around to see what they can get but it’s tricky too because they international student and you have to look for particular type of job. And the good thing about the one at Ivy Tech though is that when she’s done with school, she can get another sort of permission that she can work anywhere at all. So that one, she doesn’t really need. It doesn’t really need to relate to whatever she studied at Ivy Tech. So that will be good. But for now, it’s a little bit tricky because she’s still in school, and she has to get a job in relation to what she’s studying.

PETE: And Jill, I guess we’ll go here with this, this if nothing else illustrates some of the additional difficulties from a financial aid perspective as well as an income perspective for international students. And you’re living that reality. Our best advice to you, again, this doesn’t solve anything. But we agree with your assessment that this gets better in about six months. Five to six months, your situation becomes more workable. Now, does it make it easier in the next five or six months? No, not necessarily, but it certainly starts to subside, a lot of the economic pressures. So we wish you the best of luck, we would love to hear updates on your situation. But a lot of times when we have folks like you on the podcast, we just wanna make sure to confirm to you that you’re thinking straight. And by the way, you were thinking straight. You’re doing the best you can in a very tough circumstance. So we appreciate you spending your time with us and sharing your story with the podcast listeners this week.

JILL: Well, thank you so much for having me on your program and even if you have a problem, talking about it alone releases some sort of stress on you. And so, yes, I’m glad that I was able to share my experiences with you. And I just pray that I’ll be able to, because from now to May is sort of lot of time to go through something like this. But, I’m just glad that I was able to talk about it and I mean, in future if you have any advice for me, you have my contact. And you just call me, just to make sure that I’m okay, that would help.

PETE: Absolutely, well thanks again and we wish you a best of luck in your situation. And if for some reason Alex and I do come up with additional information, we do have your contact info and we’ll shoot something your way.

JILL: Okay.

PETE: Thanks, Jill.

JILL: Thank you so much.

PETE: All right Alex, obviously a tough situation there. We saw some added complexities of what it’s like to be an international student.

ALEX: Absolutely, yeah, it’s a very different story there. And the overall theme for me that’s really interesting as well, especially for college students listening to this podcast is look at all of the pressure that happens to you when your college is, the financial responsibility is put on your parents. Look at all the stress that induces, look at all the complications that arise from that. And I think that’s a great story to be a wake up call, I think for a lot of students.

PETE: How was that not my immediate take away and that was your immediate take away? But that is the take away. You’re exactly right. That’s what this one’s about, it’s about sure she’s a student, Jill’s a student.

ALEX: Absolutely.

PETE: But what you sacrifice as a parent. And by the way, I mean, I see it every day, parents sacrifice their retirement aspirations. So they send kids to college. So that’s why it’s so important for kid’s to graduate as soon as they can in relation to that. Not mess around and switch majors five time and constantly hit the reset button. That’s exactly right, Alex.

ALEX: Yeah.

PETE: Man, look at you.

ALEX: And it’s just, the fact that she took them all in her own name, she’s very much responsible for those and paying for them. The credit card she take out, obviously, they’re not the best financial decisions there but she’s doing it all to make sure that her kids can get an education. And I feel like the fact that she is in school was almost a lower part of this, but that was more because she was a parent. And she was infinitely more worried about her kids getting to school and making sure they will be okay in the future. So I know as I went to a school, I definitely grew an appreciation for my parents and what they did to help me get there. And I think this will be a great perspective episode for all of you students listening, just to know there is a lot that goes into getting you to college in the first place. So having an appreciation for that, and then taking the time to know that you need to separate yourself financially from your parents as soon as possible, because it has good ramifications on both sides. It’ll help you both in the end, even if you are taking on some debt. It was your education on something that in my opinion, that you could be responsible for. So, that is all we have for this week on the MoneySmarts U podcast. An interesting alternate perspective on college from a mom who is also a student and has daughters going through school. If you found this podcast interesting, if you wanna join the show, go to moneysmarts.iu.edu, fill out the application, and join us next week. We’d love to hear from you. We’d love to chat with you. For Pete the Planner, this has been Alex Eaton. Thank you so much for listening and we’ll see you next week.

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