Wednesday, June 24, 2009

How Much Student Loan Debt is Too Much?

How much student loan debt is too much? Anything over $0.00 is too much. It's that simple. There is absolutely no reason (and no return on investment) for a student to go high into debt at an expensive school than to stay locally and pay in-state tuition at a state school. The differentiation between the education at the "upper end" schools (which are exponentially more spendy) vs. the traditional state schools is insignificant.

On average, tuition for in-state schools is around $6000 / year (two semesters). That's literally $500 / month. Who can't afford that? Simple budgeting and cash flow affords that education. For $12000 / year, or $1000 / month, a student can stay at the dorms with a meal plan. What's exactly wrong with flipping a burger or delivering a pizza while attending school? How hard exactly is it to earn $1000 / month??

See, the "entitlement" mentality is infecting us, and debt has become the facilitator to these entitlements. It's absolutely criminal that parents are setting up their children for a large debt obligation right at the start of their adult life. Student loans are particularly nasty, since they don't disappear during bankruptcies, etc. How many people do you know in their 30's and 40's still paying off student loan debts? I actually knew this number at one point, but have forgotten, but it's exceptionally high.

My children are going to earn their way through school. I hope to have saved a little up for them, of course, and I hope they get scholarships. But, ultimately I hope they learn the value of hard work, budgeting, and staying off the American crack which we call debt.

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