What if you had $300,000 of student loan debt?



I was recently listening to a Dave Ramsey Show podcast where a young couple called in with a debt problem. If you’ve ever listened to Dave Ramsey, and I encourage you to do so, you know he affectionately refers to himself as “get-out-of-debt-Dave”. Well, he certainly had his hands full with one couple from the South…

A young woman called in to Ramsey’s show and explained their mountain of debt. They had, wait for it, $300,000 in student loan debt! That’s obviously an exorbitant amount of debt for any college graduate. Dave immediately asked who the doctor or lawyer was because you would assume the only way to accumulate that much debt is with 8+ years of schooling. The caller quickly replied with “neither of us”. It was all accumulated getting their undergraduate degrees!

Now neither the caller nor Dave Ramsey went into their schooling and just how two undergrads could rack up that much debt. They were more focused and the game plan of getting rid of it as soon as possible. I checked and the average cost of a private college education is $33,480 (for 2016/2017). And that is only tuition and fees and does not include room and board. This means to get a degree from a private university it would cost you $133,920 if you complete your undergraduate in four years. Let’s double that tuition number for this couple since there are obviously two of them, which brings their grand total for tuition to $267,840. That final bill is still a bit shy of $300K. But let’s assume the remaining $33,000 was used on room and board.

On top of their student loan debt they also had a $300,000 mortgage and approximately $40,000 in car loans. Their joint income was rather solid though coming in at $140,000. Either way, they have a really, really long way to go. Their scenario is very daunting. I would assume their putting out about $4,500/month toward their debts (student loans, mortgage, and car). That’s remarkable.

All of us Millennials are dealing with the current student loan crisis with our own piles of debt. But this is just ridiculous to have $150,000 of student loan debt coming out of college. No college degree is worth that. This couple will be paying back their student loans for 20+ years more than likely. I believe they have no one to blame but themselves. Well, maybe their parents too for allowing them to make this college decision. As noted above, the average cost of private college is $33,480. The average cost of a state university is $9,650, which is less than one-third of the cost of private. A business degree is a business degree. An engineering degree is an engineering degree. Your degree is what you make of it. You personally are your biggest professional asset, not necessarily your degree and where you went to school.

I hope this story and your own personally story opens up your eyes for the future. I am a soon-to-be parent and I will open a 529 college savings plan for my child. This is something my parents did not do for me. I did however go to an in-state public university and my child will as well (or perhaps a trade school if they so choose). Millennials, I urge you to help curb this student debt issue. Save for your child’s education now via an ESA or 529 account and make them choose an in-state, public university.

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