College Cost – and STUDENT LOANS

Every year, the question of college slams into our youth, as many individual saddle up to take on MASSIVE debts in the unstoppable path to getting smart, and hopefully getting rich someday.  At 18 years old, most are ecstatic to leave their family homes, to venture out, learn, think, party, and to guzzle their independence daily, forever after.

Eventually the experience ends, and the desolation and financial apocalypse of student loans will start to bear down like a building collapsed upon their heads…

If you already have giant student loans,
it’s understandable because many citizens over the last 20 years walked into the path of getting college educations (a great thing) using money they did not yet posses (a difficult situation).  An entire generation has been flooded with college debt, enough so that it’s considered a national financial crisis.  There are not enough high paying jobs available for the massive torrents of new graduates stampeding into existence every single year!

When it comes to college, there is a lot of great advice to be had, such as:

#1 Getting a degree that is in greater demand, for instance:
– Get a business degree, because the jobs page of any newspaper/website is literally brimming with business jobs.
– Get an engineering or computer science degree, because fewer people are getting this degree, but the demand for jobs is increasing.
These are great ideas, but for many people, such degrees do not strike a chord, and even taking a few classes in these fields would be unpalatable.

#2 Taking the cheapest route possible, and fudging to gain quality as you go:
-So a future student can go to community college for the first two years, then a state school for the last two years.  The truth is, the ‘General Education’ classes are ridiculously simple, and 90% of the time, these classes are text-book based, just like high-school.  The honest truth is that paying $10,000+ a year for General Education classes should be ILLEGAL!!!  So, knocking out half a degree at the Community College rate of $2,000 – $3,000 a year, or less, is a PHENOMENAL DEAL!  If a student already knows at which state school they will finish the degree, then maximum coordination can occur to guarantee transfer of credits.

The fact is, dedicating $50,000 or more to a degree, when you are 18 years old is probably asking way too much commitment.  Also dedicating that much money to a degree that does not readily guarantee employment can be a painful move that will sting for years, or decades!

Sure, commitments to a great education program can seem like an invaluable deal – and certainly they are in fields like medicine, and law-school where the final prestige and connections could make or break a career – but such benefit is not always there for other degrees.

I actually received a scholarship for a degree that pretty much just facilitated me teaching myself most of everything.  That’s right, the classes for 75% of my major involved me teaching myself. If I hadn’t received the scholarship, and instead paid substantial money to teach myself, the future of paying off that degree would have been unbearable! (That is not a universal example – but it’s a real life example to ponder)

Right now, there are so many people who graduate college and start repaying $400 or $500 per month in Student Loan debt. If an 18 year old truly new how much money that was, none of them would sign up for such huge loans – NONE of them!  When the bills start to crush them at 23 years old, they will wonder why these adults didn’t guide them better:

Profiteers will take everything you have and more,
which is what debt is about – promising away your future!

Seeing someone get an $80,000 art degree really hurts, especially because I got an art degree for very little money – and yet I can paint professionally beside anyone who got the $80,000 degree.

Making great choices with money means avoiding the ‘oooo shiny’ effect.  That means shiny new cars, houses way too large, the newest most expensive gadgets – but a really expensive education in the wrong field could top all of these losses.

Student loans are currently a part of American life
– and the range of outcomes spans from being a reasonable situation, or being cash-deadly in a way that will affect your entire life!

The first goal to saving money, preserving your future, and moving towards financial leverage is to transform your life away from debt.  Refraining from taking on debt is the ultimate precursor.  If you have large student loans already, and the interest rate is low, then accepting that debt as a part of life is inevitable!  But if you are looking at this issue freshly before taking on student loans, or know someone who is, then this advice can be a priceless variable to consider.

Since a person CAN find incredibly cheap alternatives to expensive degree routes, let’s look at the financial difference.  A really large degree might have you paying a large monthly bill for a long, long time…

$40,000 loan, paid over 20 years at 6% (current private loan rates)
will cost $287 per month, final loan pay off = $68,800        If instead you saved $287 per month for 20 years in Compound Interest at 6%
– you would have made $134,290
– then taking that lump sum to pay you 6% every year for the next 40 years = $8057 per year = an additional $322,296, which added to your $134,290 really equals $456,586
  SO REALLY THE $40,000 education costs you $456,586

So, your degree would have to earn you $456,586 BEFORE YOU TECHNICALLY MADE A SINGLE DIME OFF THAT DEGREE!!  After you make $456,586, well that’s money in the bank, but WOW, what a debt mountain that is to climb!

What things seem to cost is never what they actually cost!

Education IS AN INVESTMENT in yourself, but if the cash-flow of that decision is handled loosely, the wrong sized debt could become THE plague in your future.  Never HAVE FAITH in the pathways laid out by people who are collecting your cash!!! These people are there to take as much of that cash as possible!!  Never forget that!

Never ever forget it!

SAGA can save your friends! Feel free to like and share!

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