Student loan debt has officially surpassed credit card debt and now totals some $830 billion. While credit card debt seems to be decreasing, student loan debt is increasing faster than ever before. One has to wonder if student loans are the new credit cards.
Tuition is a product, plain and simple. And just like any other product you have to be responsible with your choices. Would you buy a luxury car when you can only afford a used Kia? Then why would you finance an expensive education, and supplement your living income with student loans? This is financial suicide, and potentially even more dangerous than other types of debt. As of today, you can’t discharge government guaranteed student loans in bankruptcy. That means you WILL pay it back if it takes the rest of your life.
Typically obtaining student loans have been easier to obtain that other types of debt, and because payment is usually suspended until months after graduation, many get lost in actually how much debt is accumulating during college. Your suspended state of reality is that money is plentiful, budgeting is minor, and payback is nil.
The average graduate student has student loan debt in excess of 60,000 with many closer to 100,000!! The payment on that debt will be close to, if not more than 1000.00 a month!! That debt combined with housing, auto, insurance, etc could definitely lead you down a path to financial disaster. Now, more than half of all undergrads are moving back in with mom and dad after graduating, because they cannot afford to pay all of the expenses associated with the lifestyle they want AND payback student debt.
You must take steps early to prevent getting lost in a sea of debt. Look into Community College, or a State University as a cheaper option to getting those core curriculum classes. Many credits will transfer (check with your university) and cost MUCH LESS. Paying to take these classes at an expensive university is like paying 1500.00 for an Iphone, knowing you can get the same phone for less than 200.00 elsewhere.
Secondly, choose a degree that gets you in the workforce door and be done with it. Be the best at what you do, and you will find success. Having a degree from a private expensive institution doesn’t guarantee you a better job, but if student loans have paid your tuition for 4 years, that will guarantee greater financial strife.
Lastly, get a job! I know that you shouldn’t sacrifice your college study time with working, but if you aren’t willing to have 3 roommates and eat Ramen 4 days a week, then you may want to consider getting a job. Yes, tuition costs have increased dramatically over the last few years, but more than that, so have the use of student loans to supplement student’s lifestyles! This is a disturbing trend, and one that will put you further behind your financial goals once you graduate.