Real Cost of College Debt?

**disneysteve** · 10-24-2016, 06:35 AM

Some of those stats make sense. Others are at least in part due to poor money management, not just the student loan debt.

For example, delaying marriage. What that probably really means is delaying a big, fancy wedding reception costing $25,000, followed by an exotic honeymoon in Fiji. If a couple wants to get married, they can do that for next to nothing with a justice of the peace or clergy person performing the ceremony.

Or buying a car. My daughter, who is still in school, bought her first car this year - for $5,000. And she could have found something even cheaper if she needed to. Student loan debt shouldn't stop anyone from buying a car but it sure might stop you from buying the car you really want.

Some things on that list, like moving back home, is probably actually a really good idea assuming the young adult uses that time wisely to aggressively attack the debt while expenses are low and get themselves in a much better situation for when they do move out on their own.

Of course, the biggest problem is that kids (and their parents) take on way too much student loan debt so that their precious snowflakes can go to the elite school on the other end of the country rather than the perfectly good and affordable school down the road. Sorry, but you can't have it both ways. You can't spend 50K/year, rack up 200K in debt, and then complain that you can't do anything in life because of your student loans. Those schools are great, but only if you can afford them with a reasonable amount of borrowing. Otherwise, there are always cheaper options.

**bigdaddybus** · 10-24-2016, 09:05 AM

Its unfortunate that student loans can be used to support a students lifestyle as well as pay for the education. But that is a choice the unwise make and I have a hard time feeling any pity.

Computer Science majors with programming internship experience are being hired right now in the high 60's in the low cost of living Midwest. With the right degree, college is still a great way to go IMO.

**disneysteve** · 10-24-2016, 09:46 AM

Originally posted by bigdaddybus View Post

With the right degree, college is still a great way to go IMO.

It's not even just the degree. It's the right college choice. There's nothing wrong with going into a lower-paying field if that's where your passion lies, but you need to get there with a lower cost education and not come out with student loan debt that you won't ever be able to repay as a social worker or other less lucrative career.

The rule of thumb, which almost nobody seems to follow anymore, is to not borrow more than your anticipated first year income after graduation.

**phantom** · 10-24-2016, 11:00 AM

I didn't have much student loan debt, but I did or at least thought about doing several things on the list. I don't see these as indicators that my debt was crippling, just that I thought it was something worth taking care of before tackling other financial goals. In fact, I think knowing that I could have my debt gone in about 5 years made it easier to delay things till it was gone. Had I finished school with so much debt that I couldn't see the end of it, I think I would have been more likely to deal with other financial goals at the same time.

Almost 30% of student loan borrowers move back in with their parents after graduation
This was me, but it wasn't like student loans forced me to live with my parents. I just wanted to save money on rent for the sake of having more money to work with. I probably would have felt that way even without the student loans.

More than 60% of borrowers have delayed buying a car because of their debt
This was me too. I wanted to wait until my student loans were completely gone and I could save up cash for my first car. But, I couldn't get by without buying a car for as long as I thought I'd be able to, so my student loans didn't delay that purchase much.

Over 70% of borrowers have delayed saving for retirement because of their debt
I mostly blame my own faulty logic for my failure to start saving for retirement, but my student loans definitely played a part. I looked at some of the charts they showed in the 401k meetings my first employer offered and decided that as long as I started saving for retirement by 30, I'd be fine. So, I made a plan to focus on getting rid of my student loan debt and put together a downpayment for a house before 30 and before starting my retirement savings.

**Outdoorsygal** · 10-24-2016, 03:35 PM

Kids often don't know what they want to do until later in life. I am not sure the hurry to run to College right after High School except to get an initial AA degree. OTherwise it seems wise to know what you want to do in life before continuing your education

**Thrif-t** · 10-24-2016, 03:58 PM

I have 2 in college who are borrowing a little for their education, between 10-12k after all 4 years. We told them we wanted them to move back home for a year and pay those loans off so they could start their lives debt free.

I didn't have any college debt. Dh did, $2500, which seems such a paltry amount but let me tell you neither of us had high paying jobs out of college and having to pay his $50/mo student loan payment caused a lot of bad feelings between us. I'm hoping my kids won't have that. But who knows who they will end up with. Hopefully someone who doesn't have a lot of student loans!!

But the kids today just roll with this, they don't think it's a big deal. I have nieces and nephews who just say that is the way it is, everyone has debt and student loan payments. I don't see it holding them back. In fact I cringe at all the ways they "waste" their money, in my eye's, when I think they should be sending it to service their debt.

**disneysteve** · 10-24-2016, 05:32 PM

Originally posted by Thrif-t View Post

But the kids today just roll with this, they don't think it's a big deal. I have nieces and nephews who just say that is the way it is, everyone has debt and student loan payments.

I think this is the biggest problem, and I blame the parents for this (and they're often just as clueless).

We've taught our daughter all about personal finance from a young age. She understands and appreciates the impact of loans and debt and paying interest. And on the flip side, she understands and appreciates the benefits of saving and investing and earning interest and compounding.

She took out her first student loan for $7,500 this semester. She is making $400/month payments even though she could do nothing until 6 months after graduation in 2 years. So at the rate she's going, assuming she borrows another $7,500 next year, she will graduate owing about $6,000 which will be an entirely manageable amount no matter what she's earning.

**LivingAlmostLarge** · 10-26-2016, 09:05 AM

You can go to the lower paying careers easily if you did community college and lived at home then transferred and went to a state school and lived at home. You could probably walk out with less debt than your first year working. So I think parents and kids need to talk and think about the future together.

I KNOW way to many parents who are ENCOURAGING their kids to go to the best school at $50k/year and take out loans and HELPING them take out loans without considering the future.

What the heck! it's not just the kids but parents too.

Real Cost of College Debt?