One of the great ironies of student debt is that it is so closely tied to getting an education… yet very few people with student loans are educated about how this form of debt really works. Weird!
Young people are going to college to learn and grow yet in many cases they are oblivious to the debt they are taking on in the process.
Here is a quote from an article titled Student loans: Lessons learned, choosing a major, and overcoming regrets on the web site of KTAR, The Voice of Arizona.
‘’Kasey was proud, hopeful, and ready to begin her dream career. But unfortunately for Kasey, things weren’t exactly what they seemed.
What Kasey didn’t know was that she had borrowed nearly $80,000 for her degree. She didn’t realize that interest accrued while she was in school either, which came as quite as a surprise. Upon graduation, the interest on Kasey’s student loans capitalized, leaving her just under $100,000 in debt. And, even after making over $17,000 in payments over the last three years, Kasey still owes around $95,000.”
Student loans are too dangerous a form of debt to ignore like this. The dollars are so big and it is so easy to borrow the money that you can’t go into this process uneducated. And I’m willing to bet that the vast majority of people are borrowing on student loans with the same blindness that this quote reveals.
Here is another quote along the same lines from the article.
“Also like Kasey, Richard wasn’t fully aware how much he was borrowing at the time.
“I realized I spent too much while trying to gather all my separate loans together for my consolidation,” says Richard. “To be perfectly honest, I really didn’t have ANY idea that I had amassed six figures in school loans. When I got my MINIMUM monthly payment quote from Nelnet, I couldn’t believe what I had done.”
Richard blames his high debt load on a handful of factors that he didn’t recognize until it was far too late.”
Parents, if you have decided that debt is OK for your child, at least encourage (or force) them into becoming an expert in how student loans really work and how they will be paid back. Think how sad it would be to turn the pride and accomplishment of college into pain and suffering after college if they are allowed to go blindly into a huge debt mess.
And if you are in school now and borrowing money, make a commitment not to be ignorant about how student debt works. Don’t be the person a writer quotes for their article in the future about the ever growing student loan mess.
If you are going to go to school to get an education, don’t neglect the education about the debt. Better yet don’t borrow.
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