A few days ago I received a comment from a reader with a question about student debt. Because it’s a good question, and one a lot of people probably have, I decided I’d do a post about it. Here’s the comment, from reader, Jim:
Our son graduated in May, 2012 and wants to start law school in the Fall of 2013. We’re trying to pay off our house and fully fund our retirement and are not in a position to help him with law school tuition. He’ll be working for the next several months, living at home and saving every dime he makes for law school, but that will hardly be a drop in the bucket. Any suggestions on how he can keep his student debt to the lowest possible amount? We paid all his expenses in undergrad and he hasn’t got a clue what student debt means. Thanks.
Jim, I’m breaking your comment into two questions/parts. The first part being: “How do we help our son understand student debt”? And then a second question, “How can he take out the lowest amount of debt possible?“-this post will be coming Wednesday.
First of all, don’t feel bad you’re not able to help your son with his law school tuition. It’s wonderful you were able to help him through undergrad and I’m sure that puts him in a much better financial place then most of his law school peers, who are already in 10′s or even 100′s of thousands of dollars of student debt.
My parents weren’t able to help me with any of my schooling bills, and I know they aren’t alone. The biggest advice I can give as someone who’s paid for schooling myself and went into a lot of debt to do it, is: Don’t Take Out Student Loans. If you have to take out student loans, take out as few as humanly possible and borrow the lowest amounts necessary to live a very minimalistic lifestyle.
If your son has never had debt before (lucky him!), then he might not understand how much student debt can suck. Have him talk to a few friends or peers who have student loan debt so they can tell him how horrible it is to be saddled with student debt. I have several friends who owe over $100,000 in student loan debt. Those peers haven’t been able to buy homes, start saving for retirement, start families, travel or even watch cable TV in 8 years (we’re now almost all 30). Imagine still borrowing from your parents, or worse living with your parents when you’re 30 (no offense mom and dad, I love you, but at 30, I need my own space).
Unlike a mortgage or a car debt where you pay a bill each month towards owning a tangible “thing”, student debt can be pretty depressing because you have nothing to “show” for all the money you owe. Well, except for a very expensive piece of “paper” with your name on it. If your son graduates from law school and can’t find a job right away, he’ll still owe hundreds of dollars per month (maybe more) towards a non-tangible “thing”. In short, you don’t want to be the woman in the photo above. $278k in student loan debt to be a teacher. I hope when she gets a job she’s the highest paid teacher in history, because she’s going to have to be, to pay of $279k in student loan debt. Pretty scary, right?
Stay tuned for a post on Wednesday where I discuss ways I kept borrowing to a minimum, and things I wish I’d known/done.
Other folks want to chime in here? How do you “warn” aspiring students about the dangers of student debt?