It used to be that one of the biggest debts you, as a student, could accrued was credit card debt. Credit card companies were clever in how they marketed to college kids, many of which had never had any experience with credit, and so many graduated with a debt often seen as “optional.” That said, you can teach better credit practices and educate them such that they don’t graduate with high levels of debt. You can’t do the same for the next big debt many students face – student loans. If you went to a four year college, chances are you paid a lot of money. According to FinAid, back in 2007-2008, the average student graduated with $23,186 in loans. That’s a staggering sum for anyone. Add law school or medical school and the number balloons to almost epic figures.
Even if you were able to get a student loan with great features and benefits, there’s not much you can do about the size of your loan. If you want to go to a four year private institution, you are forced to pay whatever the schools asks. You can try to get scholarships and grants, locally and nationally, but ultimately the amount you can’t pay through alternate means will have to go into a loan, oftentimes a student loan.
So while many financial educators focus on credit card debt as the great “evil” debt students must be mindful of, I’d argue that student loan debt is even more important. It’s often a much higher dollar amount and it’s taken under the auspices that it’s a “good” debt.
Debt is debt and debt needs to be repaid, so whether it’s good or bad, student loan debt is a big issue and a solution needs to be found.