Dear Dumplin,
When it was time for me to go to college, there was no money. I didn’t have enough self-confidence to apply for a lot of scholarships and simply assumed there was going to be someone else more qualified than me. As a result, I didn’t apply to many scholarships at all. Instead, I took student loans to go to school. At that time everyone said, “Student Loans Are Good Debt.” Well I’m here to tell you, student loans are absolutely NOT good debt. Some would call them the bane of their very existence.
Let me explain.
May and June tends to be graduation season. People celebrate their academic accomplishments and many experience the sheer joy of being done with college or even the first of many degrees. Every year around this time I reminisce as I see people graduate, talk about their career plans, and start with the new phases of their lives. I want you to go to college. I want you to go to the school of your choice and pick the academic program of your choice. But let me tell you this now, I’d much rather you work through school, then be burdened with student loans. Or better yet, I’d much rather you earn scholarships and grants to cover the cost of your education. Your Dad and I talk about financing your education and wonder if that is even the right approach. You see, I find that people who had to work hard for their degrees both academically and financially tend to appreciate it more. Most scholarships must be earned. I like the idea of you understanding early in life that nothing worth having is easy. I also like the idea of you graduating college loan free. Why?
Student loans NEVER go away. Let me repeat that. Student loans NEVER go away. They must be paid back. The end. You cannot claim bankruptcy and make them disappear. Sallie Mae wants their money and they want it now, with interest. (Hence the picture above which I found floating around on Instagram.)
When I was going to college, the assumption was that it didn’t matter how much loan money I took out because as a college graduate, I would be making more than enough money to pay that loan back. Well, no. Not at all. Not even a little bit. That time is gone, dead, and buried. The economy does not care about anyone’s student loans. I know lawyers who cannot find work. I know people with Master’s degrees in reputable fields who graduated with strong GPA’s who cannot find a job that truly fits their expertise. At one point, the trend was for people to get one job and stay at that job until retirement. That is no longer the case, current statistics show people now switch jobs every 4 years and change careers at least 5 times before they hit retirement age. That is if they even can retire or choose to retire. Why on earth would I voluntarily allow you to take out a loan that could take you decades to pay off if you may not even be in that career for the rest of your life? Our own president, Barack H. Obama, did not pay off his student loans until 2004. This was the year he was elected to Senate. No, there must be a better way.
I tried my best to graduate college without any loans. I applied all of my extra money to paying off my loans. I was on schedule to graduate debt free and then moved from New York to New Jersey. Do you know what I forgot to consider? That my tuition would jump because I now lived out-of-state. At the time, I was paying my tuition out of my own income and with some tuition reimbursement assistance from my job. When I moved, my tuition tripled. TRIPLED. I could not afford to pay it. The choice was to either take out a loan and finish school in the time frame I wanted, or to take one class at a time so that I could pay for it. The later would have extended my graduation time frame tremendously. I chose the loan. It still irks me when I have to make that monthly payment and I will rejoice when I can be done with it. As for you, we have to figure out a way to get you the education you deserve, without the chain of debt for decades. If you must take out a loan, so be it but I’m hoping you won’t have to.
Let’s figure it out together.
Love,
Mama
PS- Now as a thirty-something, my definition of good debt is debt that makes you money. I believe in the Rich Dad/Robert Kiyosaki definition of assets vs. liabitilies. More on that later.