Un-Crushing Student Loan Debt

June 26, 2015

Very often, I talk to people who have financial concerns that are weighing on them. I’ve noticed a correlation between the age of the person and the concern. Lately, a lot of people who are within a few years of retirement have been concerned about the stock market and relatively new hires who are just establishing a career have been concerned about their level of debt impairing their ability to make progress toward their important life goals.  Those are two mini-trends I’ve been seeing lately. 

It’s always a good thing when I see an article that confirms what I am seeing. Student loan debt is rising incredibly quickly. It now totals over $1.2 TRILLION and it is growing. Debt can be one of the most crippling issues (financially and emotionally) that people can deal with at any stage of life. Starting out with an almost insurmountable level of student loan debt seems like it’s becoming the norm for people in their early 20’s so what are some things that can help a soon-to-be-entering-college student graduate with a lower level of debt than their peers?

• Pick the right school for your major! If you want to be a teacher (like my daughter), it doesn’t make fiscal sense to pay $60,000 per year for an education degree that will produce the exact same job prospects as someone graduating from a $15,000 per year school. But if you are looking for an engineering degree and MIT is on the list of schools to which you’ve been accepted, it could make an enormous amount of sense to take on the additional cost.
• When in doubt, go for the low cost option. One of my sons has no idea what he wants to do with his life over the long haul. Over the weekend, he and I were talking about his thoughts on college. He has a list of about 10 potential majors right now and no clear path.  He said that because he is so incredibly undecided and unsure, he thinks he may want to either take a year off, work a bit, visit a few places he’s always wanted to see and explore the country or spend his first year or two at a local community college to get his “Intro To ….” class requirements fulfilled. I like the way he thinks! (He doesn’t know it yet, but I see a budding financial planner in him.)
• Ask the question “Is college really necessary?” There are a lot of careers where a two year associate’s degree is required instead of a four year degree and many careers and entrepreneurial efforts don’t require formal education at all. Bill Gates, Steve Jobs, the owner of a caterer that I’ve used for a lot of events – none are college graduates and all have been wildly successful.
• Take a look at alternatives. If you aren’t sure about a career path, maybe you can work for a company with a solid tuition reimbursement program and get a degree slowly. Maybe you can be a part of how online learning may be transforming education as we know it. There are a lot of exciting developments in the educational field today and it may have an impact on how much debt future students may be asked to take on.

How about you? Do you have other ideas for how to graduate with a less than crushing level of student debt? If so, feel free to add your thoughts in the comments section below.