Five years ago Noel True decided to leave the acting world and start her own film production company. She was prepared: she had a vision for the company, a business plan, and a business partner in her husband Rob King.
But there was just one thing holding her back: student loan debt. And a lot of it.
True graduated with her MFA in acting from New York University in 1998, and worked for more than a decade as a performer in New York and Los Angeles.
“When they interviewed me for admission to NYU as part of the admission process, they asked me ‘How do you plan on paying for it?'” she recalls.
Who: Noel True
Lives in: Los Angeles, California
Profession: Founder, Little Pictures production company
Her degree: MFA, 1998, New York University
Annual cost of attendance (two semesters), 2015: $88,000
“I was 21 years old and I thought, ‘Well, I don’t know how right now, but I know this is what I’m going to be doing for the rest of my life. I know I’m passionate about it, and I know I’ll find a way.'”
That “way” included taking more than $100,000 in student loans for graduate school.
But the unpredictable schedule of being a working actor on shows like Veronica Mars, Bones and How I Met Your Mother meant that her income — and paying off her loans — was erratic. True had to use loan forbearance several times and that meant she fell behind on paying them off for good.
Moving behind the camera
Then, in 2010, True decided to move behind the scenes and began freelancing in the video production business. She officially formed her own company, Little Pictures, in 2012.
While her professional life was moving forward, her loan burden remained and affected her personal financial progress. In fact, when she and her husband decided to buy a house, they omitted her name from the loan so she would not appear as a liability.
At that point, she says, her students loans payments were so large and the principal had been capitalized so many times, “I was beginning to wonder if I was going to be paying for my children’s grad school before I even paid off my own grad school.”
Noel’s money tips:
1. Research newer refinancing options even if you have been out of school for many years. “For so many years policies changed but they never included people like me who’d been out of school for so long or whose debt was so great or who had exhausted their forbearance efforts.”
2. Get your personal finances in order to improve your professional finances. “When starting your own business, your financial house has to be in order, your intentions have to be in order, and your confidence and your abilities have to be in order.”
A new peace of mind
Even though she had been out of school for more than 15 years, she began researching options to help get her student loan debt into a better place especially now that she was running a successful production company.
Earnest, she says, appealed to her for its non-traditional way of considering borrowers.
That included people like herself: self-employed and had the means to pay back a loan but didn’t necessarily look that great in a traditional model on paper. “I needed to refinance so I could take back my life and not have this thing from 18 years ago hanging over my head as I started a new venture in my life,” she says.
True’s story bucks the current narrative that student loans are holding back entrepreneurship. While startup activity by younger Americans is below historical trends, True’s experience reveals how entrepreneurs saddled with student loan debt are finding innovative ways to deal with it.
By refinancing, she shaved $400 off her monthly payments and reduced her term from 12 to four years.
Today, getting her student loan debt into a better place has helped her to be able to fully focus on the growth of her company, and better satisfy employees and customers.
“Student loans used to be something that I thought about constantly. Now that mental bandwidth is occupied with much more constructive things like how to grow my business or how to offer new products to my clients or how I can be of service.”