Student Loans – Are They Worth Going in Debt for Years?

 

 

They’re good investments and easy to get. Why not go for it?

Each fall, thousands of freshmen arrive on college campuses, bright-eyed, full of promise and ready to earn degrees. Without thinking twice, most of them rack up thousands of dollars in debt.

YES! An education is a good investment. In fact, it’s a great investment, but is it worth going into debt for the rest of your life? Before getting in too deep, students should know what they’ll owe and have a payback plan.

Earning a bachelor’s degree, a master’s, an M.D. or a PhD shouldn’t cost as much as buying a home. Yet, it does for far too many students. Once those loans pile up on top of other life-launching expenses, such as cars, weddings, kids, etc., trouble often sets in. Too much debt can:

  • Destroy marriages and families.
  • Lead to loan defaults that bring on lifetime bad credit ratings.
  • End in bankruptcy if the unexpected occurs, like loss of jobs, illnesses, accidents, etc.

How do you pay for a good education without getting hopelessly in debt?                 

How does anyone pay the high price of education . . . and still live a normal life? Ask David Carter, doctor of physical therapy, Apogee Therapy, Grand Rapids (MI) and Greer (SC). On his way through his undergraduate, graduate and doctorate degrees, he accumulated $164,000 in federal student loans.

Joined in matrimony a week after he and his wife both finished doctoral programs, the Carters owed $218,000. While many college grads stretch out monthly payments over time to keep them low, that can be expensive. It could cost nearly twice as much as they had borrowed to pay it all back slowly. Add interest to monthly premiums stretched over 10, 20 or 30 years, and college debt can climb to $300,000 or more, often up to a half a million.

THE CARTERS decided to pay off their loans quickly. They made their final payments in just four (4) years . . . instead of the traditional 10 years or more. Several other smart decisions saved them thousands of dollars in interest, as well as a lifetime of college debt.

“Consolidating our loans would have cost us more in the long run,” explains David. From the start, the Carters agreed that it wasn’t worth the extra money just for the convenience of making a single payment each month.    “We were also willing to sacrifice a lot in the first years of our marriage,” he said.

“We knew that our lives would be better in the future if we didn’t have a lot of debt. Four years of saying No and living modestly,” he added, “was a small sacrifice to make.” In just a few years, the newlyweds had put all their college loans behind them. They could easily afford the house they wanted . . . just in time to start a family.

Find out how the Carters got rid of debt so quickly. Watch for our next blog article: Tackle and Tame Debt.

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