College financial planning is back in the news with proposals from politicians for student loan debt forgiveness and free college.
It is true that the $1.5 trillion student debt is a looming crisis, and it is also true that unlike other debts student loans cannot be forgiven in bankruptcy. Most of the blame rests on the government, which subsidized universities cities through overly generous student loans, and the universities, which jacked up tuitions to soak up the subsidies while producing unmarketable degrees. Don't count on them to fix the problem.
Nevertheless, college education is still a good idea because it produces about $1,000,000 of excess lifetime earnings. Here are some ways to make college affordable:
- Why would you want to send your children to an expensive "elite" school where they will be indoctrinated with the failed 19th-century Socialist philosophy and graduate in slavery to student debt? Choose your college carefully.
- Community colleges are cheaper and better than the first two years at a four-year school. Stay home and the only college experience you'll miss is the student debt trap experience.
- Avoid colleges that market their recreational facilities. You'll be paying for them for the rest of your life.
- Most students can get scholarships and grants which do not have to be repaid. Only suckers pay the sticker price.
- Make sure your college major can lead to a good job. Some majors, such as history, are more fun as a hobby you can enjoy with the money you make from a real job.
- Work all you can while going to college to minimize your student debt. It seldom hurts your GPA.
- Student lenders have super creditor rights which override normal borrower protections. Be sure you understand what you are signing up for.
- Because of the harsh student debt laws, there is now some movement to help the unemployed and underemployed debtors. Keep up with those programs if you are struggling to pay your debt.
- Some student borrowers are delaying marriage and home purchases to get out of debt. Remember Abraham Lincoln, who built his life before he paid his debt and thereby achieved his destiny. Build your life first and do the same.
- The American dream is not dead, and you can still achieve it with hard work and wisdom. Don't lose hope.
It still pays to learn, whether in college or out: "Do you see a man skilled in his work? He will stand before kings" (Prov. 22:29, NASB).
Ron Allen is a Christian businessman, CPA and author who serves in local, national and international ministries, spreading a message of reconciliation to God, to men and between believers. He is founder of the International Star Bible Society, telling how the heavens declare the glory of God; the Emancipation Network, which helps people escape from financial bondage; and co-founder with his wife, Pat, of Corporate Prayer Resources, dedicated to helping intercessors.
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