Choosing Debt

Something’s wrong.

I just finished reading a batch of student essays about whether money is important or not and what recent social scientific research suggests about money and happiness.

Some of my students’ families struggle financially. Those students touched upon their parents’ debt and the negative consequences that have resulted from it, strained relationships marked by stress and unrelenting tension. Being well-to-do is more important to them than to my students who take their family’s financial stability for granted.

Many of these students describe the loans they decided to take out. “You have to spend money,” one explained, “to make money.” They are desperately in need of adults who model financial self discipline.

At age eighteen, they are eerily comfortable with five figure debt. And if statistics are any guide, their precarious family foundations make graduating less likely. Even if they graduate, there’s no guarantee they’ll find work that pays enough for them to dig out of their debt.

It’s great they want to continue their education, and I like having them in class, but someone has to wake them from their slumber and tell them there are much less expensive paths to getting a good education. In particular, community colleges and public universities.

Their fallacies overlap and multiply. The first is that loans are a logical solution to financial problems. The second is that attending an expensive university leads to higher paying jobs.

Universities absolve themselves of this problem, saying it’s up to the lenders themselves to assess peoples’ ability to repay loans.

I don’t know what to do. If I tell the “loaners” that there are much less expensive paths, they’ll probably conclude that I don’t think they can cut it at our pricey, private university. And if I follow my university’s lead and simply close my eyes when I know the train is about to jump the track, the students will continue down a very treacherous path.