Do you know the real price of student debt? While you are told that it is only the interest rate on your child’s student loans that you should be concerned about, the reality is that the loan interest rate is just the tip of an iceberg. Discover 3 facts that are not explained at the college financial aid counter.
Fact #1 – Students Deeply In Debt Postpone Major Life Events
While you are being encouraged to sign the loan paperwork by your advisor, what he may not tell you is that current research shows an alarming number of college grads are waiting longer to engage in major life events.
Students are so concerned about the overwhelming debt that it is causing them to forgo marriage, having children and buying a home. All of these rights of passage were supposed to be the benefit of a college education. We’ve all heard it, “get a good education” and you’ll get a great job and build a great life. The challenge is how a great life can be built when you are mentally, emotionally and financially covered in student loan debt.
Fact #2 – Students Deeply In Debt Make Poor Decisions
It is said that you should never go grocery shopping when you are hungry. The idea is that you are more likely going to buy more than you need because your hunger is driving you rather than your shopping list. This is also true in the college funding world.
Unfortunately, many students who take on student loans become okay with the idea of using debt to finance their lifestyles. This means many of the students who have student loans use those loans to not only pay for school but also to pay for Spring Break trips, dinners, cars. Their student loan funds that were originally sold to them as an investment in their future quickly become part of the wasteful consumer spending epidemic. There is nothing worse than paying for a dinner today that you ate 2 years ago.
Fact # 3 – Some Students Deeply In Debt Are Afraid to Face Life’s Challenges
When you ask a young up and coming college undergraduate what they plan to do after graduation you will be met by traditional responses however what you may not know is what is driving those responses. You would think that after all of the education, young people would be eager to leave the university and venture out into the workplace or an entrepreneurial venture of their own.
Instead what we find is that because many students are jaded about their job prospects, overwhelmed at how much they owe in loans and are unsure of what career path to take, may are deciding to stay in school to complete graduate studies. We would all agree that continuing your education is a great thing however this new way of graduate students is being born out of the undergraduate population who is unwilling to face the significant financial hole they have dug for themselves.