Subtitle: When “Good Debt” Comes Back To Haunt Us
Several months ago the Wall Street Journal reported:
Americans owe some $826.5 billion in revolving credit, according to June 2010 figures from the Federal Reserve. [Most of revolving credit is credit-card debt]. Student loans outstanding today — both federal and private — total some $829.785 billion, according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com.
Translation – Americans now owe more money on student loan debt than they do on credit cards.
That’s alright, isn’t it? Because student loan debt is good debt!
Here’s my challenge (if anyone is listening): when it comes to higher education, we need to get out our current mode of thinking.
Here’s what I understand is the current approach to higher education.
- A kid graduates from high school.
- Regardless of that child’s aptitude, interest, and life goals, he goes or is sent to college.
- During her college years, the child seeks to find one’s self.
- While junior is attending college, either the parents or the student herself is accumulating tens of thousands of dollars worth of debt.
- No one bats an eye because it’s the right thing to do.
Personally, I think we are putting too much emphasis on education, and as a result, we encourage/justify students taking on thousands of dollars worth of debt. In the end, that debt then completely limits their future and makes students feel boxed in, not liberated.
Student Loan Debt Example #1- Little Steve
When Little Steve has a couple of years of high school left, everyone starts asking him, “Steve, where are you going to go to college?” Steve automatically starts thinking about what college he wants to attend. In a couple of years, he is on his way to Freshman classes.
At college, people start to ask him, “Steve, what do you want to major in?” Steve automatically starts thinking about what college degree he wants to have. Probably two or three majors later, Steve decides on a college major.
After graduation, people start asking Big Steve, “Steve, what kind of a career do you want to pursue?”
I kinda think that before Steve went to college he should have had a good sense of the career he wanted to pursue.
I worked two years in full-time youth ministry, and there are a few things that will make most parents panic and call the youth minister.
- Something involving a person of the opposite gender.
- Something involving drinking or drugs.
- Something involving a child who insinuates that he might not want to go to college.
“Craig, my son doesn’t think he wants to go to college. Can you please talk to him?”
I never panicked when a high school student thought she might not want to go to college. Why? Because I didn’t want to go to college when I graduated from high school.
My experience with higher education and student loan debt
First, a little personal background that might offer some perspective. When I graduated high school, I was ready to take a year off school. I was burned out and felt like I lacked direction. I didn’t know what I wanted to be when I grew up. With, what I assume, was the full support of my parents (at least they never tried to stop me), I took a year off school and attended a three month missionary training school and moved overseas for a few months.
I returned ready for college.
Typical Canadian students pay for college, so armed with money that I saved during my year off (and some very generous scholarships) I went off to a Christian college. I finished a four year degree with some memories, a degree, a wife, some academic accomplishments, and $5,000 in debt.
Between my wife and I, our student loan debt was close to the $20,000 mark. Within five years, my wife and I both completed a Masters Degree (she did a 36 hour program and I did an 84 hour program). Within a year of graduating with our Masters degrees, we had no student loan debt.
The point is I didn’t do any of my higher education until I was ready. I went to school when going to school was the right choice, not because I felt forced. I think we should encourage young people to do the same.
You know what would have happened if someone forced me? I would have worked as hard as possible to underperform at every academic task. I proved it in some of my grade 13 classes (you’ll need to be Canadian to understand that). I’m thinking about a Chemistry class I was forced to take. In that class I got my first and only C in my life.
Higher education is a vehicle to help a person develop socially, academically, and even spiritually. But, until someone has direction, school might a waste of money.
When is higher education and student loan debt a waste of money?
- When you have no idea why you are attending school.
- When someone forces you to go.
- When you don’t care.
Unfortunately, a lot of kids are doing higher education and they fit the description above.
How to Get Value Out of Higher Education
- Be willing to entertain the question – is it worth it? “Worth” means different things to different people. We will often make more sacrifices when we think something is more necessary. While I support higher education, I think it is also important that we realize what we are investing in and what we are getting in return.
- Parents need to listen to their children about their hopes and dreams. As a former youth minister, I know how scary it can be for parents the first time their child hints that she might not want to go off to school. But, in this day and age, a person can find alternative avenues to accomplish his or her goals. Not wanting to go to school now doesn’t mean they’ll never go to school. But you can’t put enough pressure on someone to make them care.
- Students who carry a financial responsibility are more likely to carry an academic responsibility. I didn’t want to waste money on college. I wasn’t about to go until I was ready. When I went I applied myself to every class (except for US History because, out of principle, as a Canadian I begrudged the fact I was forced to learn US History. I showed them by getting a B in the class).
- Do not make student loans your default mode, but Plan B. Have a plan in place to try and graduate without student loan debt. Here’s my guide on how to graduate college without student loan debt. Far too many kids take on heaps of debt, and then they want to travel the world. Open up your opportunities by minimizing your student loan debt threshold.
Final Note: Yes, there is a good chance that in 12 years when my kids start going to college, I’ll eat my words. Please bookmark this page and check back in 12 years.
photo by Alan Cleaver
What are your thoughts about higher education and excessive student loans?