Steadfast Finances
A Personal Finance & Investing 101 blog that delves into current events, consumer education, and techniques to improve your bottom line.
The American Dream Didn’t Mention Anything About Student Loan Debt
As sad as it is to say, many 20s Something college graduates have no clue what’s in store for them when it comes to repaying their student loan debt.
As this formerly clueless, now cognizant, college grad with $275,000 in student loan debt so aptly puts it:
The American Dream is almost my American Nightmare. My future, right now, is debt.
To be fair, I wasn’t all that different than this young gent. I’ll even go so far as to say I had little to no clue about how dangerous is was when it came to taking on too much leverage, especially during my slave to my stuff years.
But I think that this is, at least in some part, due to a economic faux pas that we Americans are subjected to on an everyday basis. Most of us believe that the party will never stop, that tomorrow will always be a brighter day, and that famine never occurs after the feast. It’s who we are, and it’s served us well on many occasions.
But there is something inherently dangerous in preaching nonstop positivity, or any “all or nothing” idea for that matter, that we American’s rigidly cling to when we talk about our future.
Not surprisingly, selling the hope (real or perceived) causes us to think everything is grand, we borrow money hand over fist, and chug along blind, deaf, and dumb… until we have a moment of clarity.
As the indebted college grad goes on to describe, he’s finally aware that a substantial percentage of his future income must be reserved solely to pay for past services rendered because he believed that the cost was worth it and that the American Dream was a given. That’s all well and good if he can earn enough money in his career path to service his past debt, but if he can’t, his American Dream is essentially on hold until his debts are repaid in full.
In no way am I suggesting that you should avoid higher education, but it would be a wise move to learn from this gent’s mistake related to student loan debt (or any other debt for that matter) if you’re one of those college kids “on the five year plan”, majoring in a lame subject matter with little to no employ-ability, or have zero idea of how much student loan debt you’ve already racked up.
2 Comments
Jul 24, 20102:14 pm
It’s really a shame how little education we’re given on the concept of the student loan. It really is a mortgage on the so-called American Dream. I’m working on paying down this “good” $24K debt as soon as I can. Debt is debt is debt and I HATE IT!
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11:42 pm
I think a lot of it has to do with parenting. It was made crystal clear to me that whatever college bills I racked up, my parents would front and I was on the hook for 50% payback over 5 years once I graduated. Doing some simple math, I knew that with room and board, I was looking at several hundred per month for years and I didn’t want that number to be over $1000 per month. Thus, I went to a state school, picked a major with a high starting salary (instead of art history at a private school) and starting paying back my obligation immediately.
A lot of parents don’t have this discussion with kids and kids don’t learn about basic finances in either school or at home, because in many cases, their parents are behaving like children themselves.