Some people have thrown all logic out the window when it comes to their education.  They are stupidly borrowing huge sums of money in the form of student loans to pay all of their college expenses.  I’m sorry to be so blunt, but it is true!

Occasionally, a blogger writes a post that they truly wished everyone would read.  This is one of those posts for me.  I really hate hearing that people are burying themselves in tons of student loan debt unnecessarily. 

I believe this is a mistake that most will live to regret and regret in a big way.  So, I’d ask you to please forward this to any parent or student you know that might benefit.  Thanks!

Two real-life examples of student loan debt gone bad

My fervor over avoiding student loan debt peaked recently as I was listening to The Dave Ramsey Show on the radio.  I heard two of his callers give heart-breaking details of their situations.

First, let me say, while I strongly believe that a college education is a good investment, it is not priceless!  I believe paying for college with student loan debt is a recipe for financial disaster!  Here are two great examples of where things went terribly wrong!

Student Loan Debt – Situation One

The first was a 23-year old female that explained she was engaged to a 24-year old young man that had $90,000 in student loan debt!  He attended a private university to obtain a degree in Spanish and financed the whole deal with student loans.

This poor couple had debt equivalent to a home mortgage and they weren’t even married yet!  On top of that, his degree isn’t likely to earn him a big salary.  They are going to be saddled with paying off his student loans for years! 

This young couple will be starting life in a deep, deep hole that will severely limit their options and could become a sore spot in their marriage.  Sad, but true!

Student Loan Debt – Situation Two

The second caller I heard was a middle-aged, married man that works in maintenance for a school district.  He never completed college, but he did attend for awhile.  His wife is a teacher with a Master’s Degree.  Their combined household income is about $6,000 a month.  It all sounds pretty good so far, doesn’t it?

Well, this couple has accumulated $180,000 in student loan debt!  They feel handcuffed in their lives because they have no financial breathing room.  Ramsey pointed out that even if they live on rice and beans so they can pay $30,000 a year on this debt, it would still take them over 6 years to dig out of this mess!  What a shame!

My heart truly goes out to these people.  It saddens me to hear how financially bound they are due to student loan debt.

Why I feel so passionately about avoiding student loan debt

It seems that some people look at piling up student loan debt like it is a necessity akin to medical bills.  This is simply not true!  I think they go into it without thinking the whole thing through.  Here are at least two things they need to consider:

1.  Student loan debt puts you in a financial hole right from the start

In most cases, you have to start repaying student loan debt as soon as you leave school regardless of whether or not you ever get a degree, are satisfied with your degree or find a job.  This puts a substantial load on you just as you are trying to get some financial traction.

Failure to repay on time will result in damage to your credit score which can cause you additional trouble such as difficulty getting a job, getting an apartment and buying a house!

If you neglect repaying your loan long enough, it will go into default which means the total loan becomes due immediately.  This can result in legal action, wage garnishment, loss of professional licenses and loss of tax refunds.  Think seriously about what you are obligating yourself to before taking out a student loan.

Furthermore, you cannot get out of most student loans by declaring bankruptcy.  You are going to be stuck with this debt for a long time if you sign on the dotted line!  Student loans are not a quick and easy answer to the problem of paying for college!

2.  Your potential earnings might not offer a good ROI

Some would say that student loan debt is “good debt”.  They would say that you are making an investment in your future.  Well, good investors look at their potential return on investment or ROI before they commit.

A good investor only puts his/her money into something that offers a good ROI.  In both of the situations above, the potential earnings as a teacher or Spanish major do not come even close to justifying the amount of student loan debt.  In addition, these individuals could have earned the same income with a much smaller initial investment using some of the strategies I suggest later in this article.

Furthermore, the repayment of student loans is likely to delay investments for retirement and wealth-building.  This has a big cost!  According to this article on MSN Money, if a 22-year old puts just $3,000 in a Roth IRA they can expect it to grow to over $95,000 by retirement age assuming an 8% return.  If this same investment is delayed just ten years, the typical length of a student loan, the nest egg will only be $44,000 which is less than half!

Student loans are not a good way to finance your investment in your future!  They drain you of your financial power and leaving you feeling helpless.

Seven alternatives to student loan debt that you should try

Where there is a will, there is a way to go to college!  Ruling out or at least minimizing student loan debt is not that hard and should be seriously considered to avoid the mistakes Dave Ramsey’s two callers made.

Here is some of what I and others suggest:

1. Go to a junior college for the first two years – Community colleges offer much cheaper tuition and let you get the basics out of the way in the first two years without it costing so much.  Very few employers are going to care where you went to school during your first two years.  They just want to know where your degree is from.  Also, attending a local junior college might let you avoid the additional cost of room and board.
2. Go to a public university instead of a high-cost private institution – Unless you get a scholarship that pays all or most of your expenses, then I highly suggest choosing a public university versus a private one.  The savings can be immense and the differential in earnings later in life is minimal. 
3. Exhaust every option for scholarship, grants and other financial aid – Be tireless in your pursuit of free money that you do not have to pay back.  There is a ton of good information available on the Internet about how to do this.  The effort can save you thousands of dollars up front and a lot of heartache later.
4. Work while you attend school to help pay expenses – It is possible to work part-time or full-time while you attend college.  Numerous people do it.  The money you earn will go directly towards offsetting your expenses.
5. Seek out an employer than offers tuition assistance – Many employers have tuition assistance programs that will help you pay for a degree in your area of employment.  There are also programs that pay you to go to school if you commit to working a certain number of years in a rural or under-served area upon graduation.  This is a great way to work your way through school!
6. Take advantage of the G.I. Bill to earn your degree – Consider joining the military so you can take advantage of the new G.I. Bill.  The post 9/11 bill will pay tuition, a monthly living allowance and a book stipend of $1,000 per year.
7. Save money in advance to pay for college – I know this may seem obvious, but since so many fail to do this I felt it was worth mentioning.  If you still have time, save as much money as you can in advance to pay for school.  Do some research and be realistic about what you will need to pay all your expenses.  This is probably the best alternative there is to student loan debt!

Avoiding student loan debt is priceless!

You will save yourself a lot of financial heartache and regret if you simply exercise some in creativity in figuring out how to pay for college.  Student loans are not the easy way out!

Again, I hope you’ll share this with as many people as possible in hopes that it helps them avoid this killer financial mistake!

Photo by  jennifercw

Wisdom was up there in his years when I met with him.  Yes, he’d definitely been around the block a time or two, but he didn’t seem old.

In fact, it didn’t appear that he’d aged a bit since the last time that I visited him many moons ago.

His eyes were bright and clear.  They were captivating when I looked into them. 

They say that our eyes are a window into our soul.  Wisdom’s eyes were calm, inquisitive and welcoming.

When he spoke, it was with authority, but not the pushy kind.  You just knew that he was right and you wanted to listen.

I listened to Wisdom a good long time.  How long I’m not really sure.  I lost track of time.

His words seemed to feed my soul.  Have you ever read or heard something so meaningful that it actually felt nourishing?  That’s exactly the way it was as I listened to Wisdom.

Wisdom told me how he led his life.  He shared how he lived, where he’d been and what he’d seen.  His words opened my mind to things that I had rarely, if ever, considered.

Wisdom began as a student of everything

Wisdom started as a student.  He was an eager, curious learner drinking deeply from the well of education.  He never crammed or took other shortcuts to learning.  Instead, he was disciplined and passionate about his studies.  He had a deep desire to soak up as much information as possible.

He not only grew in knowledge, but he also developed practical skills.  Wisdom often conducted experiments to see how what he learned could be applied in the real world to solve problems or unlock mysteries.

Wisdom stumbled onto entrepreneurship

From time-to-time, one of Wisdom’s experiments proved useful to others.  They would take what Wisdom had assembled and find that it simplified their work or otherwise met a need they had.  This thrilled Wisdom!

Occasionally, people would be so delighted with Wisdom’s ingenuity that they would reward him.  At first, he was shy about taking their money.  He had simply been experimenting and trying to learn.  However, he was happy to know that his thirst for knowledge benefited others.

Initially, Wisdom decided the best thing to do with the money was to use it to conduct bigger, more elaborate experiments.  These experiments led to discoveries that profited many.

Soon, people from all over sought out Wisdom to solve their problems.  They offered him large sums of money to examine their situation and develop a solution to their needs.

Wisdom became a busy man, but he loved helping others so much that he didn’t mind a bit.  He worked hard and served the needs of people far and wide over many years.  He was passionate about his work and never found it dull or boring.

Wisdom saved a fortune from his earnings

Wisdom earned a lot of money helping others.  Though it wasn’t his original intention, he did find satisfaction knowing that his work was so appreciated.

One day early in his life, as Wisdom was pondering the small pile of cash a grateful business friend had left him, it occurred to him that money was just another tool he could use to do good things for his family and for others.

This energized his thinking about money.  He began aggressively saving what people gave him.  Wisdom quickly saw the power of compound interest.  He placed his money in investments that had long track records of good returns.  His money grew.

In addition, Wisdom was a smart consumer.  He only bought what he really needed and he always paid cash.  In his mind, debt was just too risky.

Soon he found that he had enough money to help build his community.  Wisdom gave generously.  He contributed to building schools, hospitals and libraries.  This further developed Wisdom’s reputation and earned him even more business and respect.

Wisdom was a faithful family man

Wisdom not only succeeded in business and with money, but he also was a good husband and father.  He realized that his life was one whole and not compartmentalized.  Whatever good or bad that happened in one area of his life affected the other areas.

He was sensitive to the needs of his wife and always treated her with respect.  His marriage was a true partnership.  He valued his wife’s intelligence and intuition.  As a result, she honored him as her husband.

Wisdom also devoted himself to fatherhood.  He understood that a father plays a vital role in raising children.  He was a wonderful role model.  He knew that his children learned more from observing his behavior than from lectures.  Therefore, Wisdom tried to live an honorable and upright life.  His children looked up to their father and loved him dearly.

Wisdom took care of his health

As Wisdom aged, he realized just how precious his health was to his quality of life.  He ate right and exercised regularly.  He never ignored signs from his body that it needed attention.  Wisdom went for regular check-ups and followed his doctor’s advice.

As a result, Wisdom enjoyed great health.  He was able to remain mentally sharp and physically active throughout his life.  He knew that without his health that he wouldn’t be able to enjoy all he had worked to achieve.

Wisdom sought to always broaden his perspective

Wisdom told me that he felt one of the keys to his success was that he never let life grow stale.  He always maintained his curious and inquisitive mindset.  Instead of feeling threatened by change or new environments, Wisdom felt invigorated.  He loved the challenge and opportunity to learn.

Therefore, Wisdom made it a point to travel to new cultures.  He loved observing the differences in other countries.  He strived to learn some of the language and customs of every place he visited.  His efforts won him many friends around the world.

Wisdom tried new things whenever he could.  The adventure fueled his enthusiasm for life and kept things interesting for him.  Life with Wisdom was never boring.  He constantly inspired those around him to live life to the fullest in every way.

A life with Wisdom was a life well-lived

I count my relationship with Wisdom as one of the most important of my life.  He has always been there for me and has never let me down.  It has always been great knowing that I had a friend I could count on regardless of the circumstances.

Lately, for whatever reason, some of lost track of Wisdom.  They’ve let their relationship with him fade.  Have you met him?  If not, I hope you’ll stick around.  I’d love to introduce you to my friend.  Wisdom would also love to meet you.  Just a warning, he always seems to have a gift to offer new friends, so don’t be surprised.  I always tell people, but they still seem a little shocked when they realize what Wisdom has given them.

I hope I never lose or let my relationship with Wisdom fade.  I learn from him everyday.  I suppose that will never change.

How’s your relationship with Wisdom doing?

Photo by zedzap

Students go to school to get an education for a better, more prosperous life.  However, many of the habits needed to truly be successful are learned outside the classroom.  Developing good habits that will help individuals of all ages succeed can never start too early.  These routines will help us create success for the rest of our lives.  They are the tools we need to live life to the fullest!

Good habits everyone needs for success!

This list of good habits will serve you well whether you are a parent, student, entrepreneur or just a regular person.  Learning these habits now will help everyone get ahead in life.

1.  Get on a good schedule.

We need structure and routine in our lives.  Our bodies expect it.  They perform best when we operate on a regular schedule.  We especially need to eat and sleep about the same time each day.  If you are the parent of a young child, it is your job to teach this habit early.  This routine stays with a person their whole life and helps them to develop good work habits.  Find a schedule that works for you and stick to it!

2.  Eat a healthy diet.

Our brains need the right food to perform at their peak.  Don’t go to school on an empty stomach.  Students need to train themselves early to eat a balanced and healthy diet.  We tend to carry the habits we learn when we are young forward with us for most of our lives.  Learning to eat right now can avoid many health issues down the road.

3.  Learn to exercise.

We need physical activity to stay healthy.  The benefits of regular exercise are well documented.  We need to find exercise routines that are fun and match our individual tastes.  Developing a good exercise routine is a habit that will increase both the quantity and quality of your life.

4.  Practice gratitude.

It is so easy to get in the bad habit of envying what others have.  The grass often seems greener on the other side of the fence.  It is vitally important to learn gratitude.  Practice thinking about the things you have to be thankful about.  I do this with my daughter each evening when I put her to bed.  I ask her to recall the good things that happened that day.  We then take a few minutes and give thanks for those things.  This helps us both to train ourselves to be grateful.

5.  Develop good study habits.

Studying effectively is a skill.  People that live life to the fullest are lifelong learners.  They never stop trying new things.  One needs to study and gather new knowledge in an effective and efficient manner.  Learning how to study and acquire the knowledge to succeed doesn’t just occur naturally.  It needs to be taught.  Take a study skills course or ask others for tips on improving your study habits.

6.  Never give up!

I remember being told in school that, “Winners never quit and quitters never win.”  I think this is a Vince Lombardi quote and it is certainly true.  It takes perseverance in life to enjoy any kind of success.  I also remember hearing, “When the going gets tough, the tough get going.”  These sayings come back to me time and again when I feel like giving up.  Perseverance is a habit.  It is one that can be developed just like any other.

7.  Manage money wisely.

Why don’t they teach a good personal finance class in school?  Students need to learn to earn, save, budget, track, and wisely spend money to be successful in life.  Good money habits can never start too early.  There are a lot of good resources out there to help.  I recommend taking a look at what Dave Ramsey has to offer for various ages.  Of course, you can also find a lot of fantastic money tips reading blogs!

8.  Respect the environment.

It seems to be hip to be “green”, but being a good steward of our environment is really not that new.  Wise parents have been teaching these principles to their children for ages.  We only have this one world and we depend on it for our survival.  Every person needs to do their part to protect what we have.  Develop habits now that will help you to be a good environmental citizen for a lifetime!

9.  Strive for excellence!

Why do a job if you aren’t going to do it right?  We need to develop the habit of giving every task our best effort.  Excellence should be the standard we strive for in all we do.  We can’t start letting ourselves or our children do the least possible to get by.  If we do, then they are going to receive less than the best results from their work.  Teaching excellence now will ensure habits for success will carry forward.

10.  Live the Golden Rule.

“Do unto others…” is a guideline we should all follow.  Think of the conflict and tragedy that could have been avoided if people simply applied the Golden Rule in all their relationships.  If we make this a habit, then we will find a lot more success in life.  Respecting people of all races and beliefs is a hallmark of living life to the fullest.

11.  Practice good hygiene.

You really can dress for success!  Habits like brushing your teeth twice a day and washing your hands regularly not only contribute to health, but also lead to routines that give one a sharper appearance.  First impressions are powerful and are mostly derived from the way a person looks.  Like it or not this is true.  Start today to ensure you do what it takes to leave a lasting good impression.

12.  Always tell the truth!

The truth often comes out whether we want it to or not.  Lying generally just complicates the situation and makes us look bad.  Look at the scandals many of our politicians fall into because they fail to admit the truth.  It is much better to just develop the habit of telling the truth even when it is difficult.  This will save you a lot of heartache and misery in life.

13.  Ask for what you want.

Develop the habit of asking for what you want.  How else are you going to get it?  It is really that simple.  Often, when I ask, I am amazed at how quickly I get exactly what I wanted.  Just give this one a try.  If you are a parent, teach your children to ask others for what they want.  This is truly a behavior you want to come naturally.  It will build confidence and self-esteem that will serve your kids forever!

14.  Be a regular reader.

Being a good reader is a skill that often separates the good students from those that struggle.  Becoming a good reader takes practice.  The more you read and are read to, the better you get.  Reading has numerous benefits.  It builds one’s vocabulary, expands the imagination, and rekindles creativity.  Make reading a routine!

15.  Be punctual.

Arriving on time is important to one’s success.  People always notice when you are late.  It is an indicator of whether you mean what you say and can be trusted.  Do not introduce doubt about this into people’s minds by showing up later than expected.  Create the habit of being punctual now and you won’t have to worry.

16.  Respect authority.

Failure to respect those in authority positions can lead to all kinds of problems in life.  It doesn’t matter whether it is your boss, a police officer, or a university dean.  People in authority have a job to do and often worked hard to get into the position they are in.  They deserve to be treated with proper manners and reverence.  Learning to say, “Yes ma’am” and “Yes sir” will get you noticed in a positive way.

17.  Tend to your spiritual needs.

We cannot ignore our spiritual needs and truly live a full and rewarding life.  We must recognize that there is a higher power and pursue our faith regularly.  We may not exercise our beliefs in exactly the same way, but I encourage you to find what works for you and explore it to it’s depths.  A solid spiritual life will serve you well.

Good habits developed now will last a lifetime!

These are good habits you want to set in concrete now.  The quicker you make these habits that you live by, the better life you will experience.  If you are a parent, then print this list and work on it with your children.  Back to school is an excellent time to focus on new habits that will last a lifetime!

What good habit did I miss?

Check out more articles in the Back to School series:

• Back to School – College Housing Contract Basics at The Wisdom Journal
• Back to School Savings Challenge at My Dollar Plan
• How to Be a Frugal College Student at Frugal Dad
• Back to School Season Already?  Keep the Family a Priority at Simple Mom

Photo by Avolore