Students take on college debt with the best of intentions. They’ve been told that a college degree is a ticket to success. That they should pursue their dreams. That student debt is good debt.
But how do smart students wind up with debt they can’t repay? Here are three reasons, plus ways to avoid these financial traps.
They’re told it’s ‘good debt’
In high school, students hear that they should earn a college degree to have a well-paying, successful career.
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Well their parents have mortgages and car payments they can't keep up with and they get by. Why sweat it ? There is always bankruptcy it the American way.
ReplyDeleteYup. Ask the President
DeleteStudent loans cannot be eliminated through bankruptcy...
ReplyDeleteI'd say 80% of the people out there don't use their degree that they paid $60K+ for.
ReplyDeleteIf Susie Orman has her way college loans will be dismissed under bankruptcy laws.
ReplyDeleteCollege degrees are valuable. Studies show that people with degrees earn far more than people without degrees (on average). But, you have to choose the right degree.
ReplyDeleteGood debt?
ReplyDeleteThe only good debt is short term debt with a guaranteed profit made over the principle and the interest.
7:01 PM - And you have to put in considerable effort to make it pay.
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ReplyDeleteMost entering college with a loan have very little clue as to the implications of the loan if they graduate, and even less clue about what happens if they don't get the sheepskin.
They are financial illiterates in most cases.
Let's get Uncle Sam out of the college loan biz. Let the colleges underwrite the cost of the education, and get repaid when they are successful in graduating students who are employable. Or let kids and their parents cough up the cash privately.
Too few students actually have enough skin in the game.
Northwest Woodsman: Better to go to a trade school and learn to be a welder, electrician or airframe and power plant mechanic. Learn something that will provide a good living and then do the college nonsense on a part time basis to get a worthless,piece of paper.
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