You’d think it was some kind of contemporary rite of passage. The phrase I was just using was referring to student loan debt.
My poor father urged me to go to college when I was a youngster. He urged me to have a better degree in order to obtain a better career and enjoy a more generous retirement package. We used to have various views on what the term “good” meant.
The students had essentially the same thought: college was way more affordable back then, but the reasoning was the same. You would be well-rewarded for your investment in greater wages and a better job in the long run.
When parents everywhere tell you that something is a good idea, it turns out that they could not believe in it, either.
An overwhelming majority of U.S. citizens has regretted their educational debt.
In the ninth year of its research on student loan debt, TICAS (The Institute for College Access and Success) showed that over 70% of graduating seniors in 2013 had an average student loan debt of $28,400, an increase of 2% from 2012.
These statistics were astounding. Despite that, student loan debt reached $1 trillion for the first time in 2012, according to the Wall Street Journal.
Things have only worsened since then. Credit card debt has long since been eclipsed by student loan debt, but it was just recently that this happened: When outstanding student loan debt overtook credit card debt and subsequently topped $1 trillion for the first time.” That sobering number has only climbed since then: $1.4 trillion in student loan debt is now owed by Americans, according to the Federal Reserve.
And how much do typical students owe on their student loans today? $32,731.
It’s astounding that… 75% of U.S. citizens who are surveyed said they wish they had taken action to lessen the stress of their student debt.
The study also found that the top piece of advice they would provide themselves if they could go back in time to have a discussion is to do things a little differently.
- Make sure that you have paid off your school debts as soon as feasible (43 percent )
- Define student loan choices so you know exactly what you need to do (41 percent )
- talk to educational funding professionals about it (33 percent )
- Consider applying to a less costly college (29 percent )
- Get a cheaper interest rate by refinancing student loans (26 percent )
A college degree does not even cover the cost of tuition.
This may be shocking to you, but you may also be assuming that student debt will be going into education. That’s quite good.
As I noted some time ago: out of college, about half of the college students borrow money to spend on items like:
- Vacations (3 percent )
- Offers for cheap, tasty meals (13 percent )
- Garments (15 percent )
- Losses incurred from car expenses (19 percent )
- One-time purchases like cell phones (41 percent )
To be fair, a lot of student loan money does not go towards education (beyond the fact that many grads believe their degree was not worth the debt).
A recent poll from Student Loan Hero claims that 3% of students have spent their school loan money on alcohol and drugs, as well as 2% on gambling and other non-educational items.
The student loan business is worth over a trillion dollars due to easy money, high promises, and poor financial knowledge. That is a great deal of money, and everyone has regrets over it.
The saddest aspect of all of this is that so many individuals try to fix the problem of too much student debt by… doing the exact same thing all over again! I’m referring to the $25,000 to $100,000 difference in tuition fees that is associated with an MBA program ranging from two years to four years in length. Taking time off work in addition to that is also considered a lost wage. In terms of the total cost, the opinion is that it’s worth it because you’ll earn more over time, even if it takes you longer to recoup your initial investment. The same nonsense, as always.
You may learn a lot from the mistakes others have made by regretting their college debt. Consider doing one or all of these five things if you are considering (or planning to return to) college.
Gain new knowledge and experience through working
I did not attend a conventional university. Instead, I attended the Merchant Sea Academy, a college that teaches young men and women how to safeguard our important marine transportation routes. Due to their extensive training, graduates of the Merchant Marine Academy were often among the highest-paid employees, having job openings that were absolutely perfect for them.
After college, I found myself with the chance to work in the shipping business, where I might earn a six-figure salary like what you see now. But with the help of my wealthy mentor, I decided I didn’t want to be an employee anymore. I had set my sights on being an entrepreneur.
So instead of accepting a guaranteed thing, I decided to take a chance — accepting a position as a salesperson at Xerox where I knew I was going to be paid very little in a profession that I knew very nothing about. Why? In order to be successful in business, I realized I required sales abilities. At Xerox, I learned important work skills while earning a good salary.
In the beginning, I was the poorest salesman at our company, but as I applied myself, I rose to the top of our sales team. Everything I studied in college pales in comparison to the sales abilities I’ve gained through the years.
Non-traditional education should be explored
Skills and abilities that are not often taught in four-year colleges might aid you in achieving your life goals, depending on what you want to achieve.
Many community schools, especially non-profit colleges, will include classes on personal finance offered by professionals rather than professors. Furthermore, there are less expensive ways to acquire new-world skills like computer programming, web design, and more. Instead of wasting four years pondering your future while simultaneously accumulating debt and enrolling in programs that will only be relevant to you in the future, determine what you want to accomplish and take the classes that will serve you in the long term for a fraction of the expense.
Furthermore, make sure you have a strong understanding of personal finance by taking classes, reading books, participating in seminars, and seeking out a coach.
Starting to invest
It is generally agreed that it is more efficient to spend $45,000 getting a degree only to obtain a job at Starbucks and forgo all of the debt, rather than get a job at Starbucks and incur all of the debt.
Find an asset class that you’re interested in, learn all that you can, and use the money you would have spent on college to start building your financial future sooner rather than later. You may have to use a loan to get started, but it will help you avoid the time, expense, and effort that it would have taken to earn a college degree.
However, you may ask, “But wait, you might ask.” Aren’t you the one who just advised us not to get into debt? I’m not telling you not to go into student loan debt. Because this is why you should understand the difference between good debt and bad debt, it’s critical to keep this distinction in mind. When it comes to debt, good debt (investment) generates money. When you have educational debt, you are depriving yourself of money.
Get started with your own business
For the vast majority of students, getting a decent job at the end of college is the primary reason for attending college. Others are diverse from one another, and if you’re reading this, you probably think differently from most people. While it is true that many great company owners and entrepreneurs never went to college or dropped out, it is also true that they acquired the necessary skills and education elsewhere.
When they realized they could spend their entire lives, youth, energy, and skill helping others gain financial success, but could also put their own money into their own wallets and achieve their own goals, they knew what option they had. Even if you have a brilliant business concept, please take use of it today.
Fulfill your community’s needs
Finally, try to spread some kindness by doing something kind during your leisure time, which you will have because you will not be writing term papers on ancient history into the wee hours of the morning.
Many individuals want to give back to their community, but finding the time is a struggle. They often remark, “I’ll do it after college.” Following that, it will be, “I’ll do the task after this internship.” “They’ll be at school. Then, I’ll take care of it.” It just keeps going and going.
I believe that helping others not only makes you a better person, but it will also help you achieve financial success. To use an old saying, it is said that if you plant excellent seeds, good crops will result.
Caring for your community gives you the opportunity to look outside your environment, form relationships with individuals you would never meet, discover community needs and possibilities, devise strategies to fulfill those needs, and allow you to accomplish good and valuable things.