By Lissette (Camacho) Morales
Congrats to the class of 2016! From the looks of all the posts and family photos on Facebook, no matter how long it took or how much student debt may cost, both students and parents are all genuinely happy and proud that graduation day is finally here.
Who can blame them? Not me. I’m the first one to give the grads their #props, #kudos, whatever you want to call it. They have every reason to celebrate graduation especially given the fact that many of those who start college never finish.
What’s more, many of these recent grads are so blessed they may never run into problems paying their loans. That means they have all the more reason to celebrate, right?
I could stop right there, but I won’t. That’s because once the excitement of graduation wears off, these young people get to start their adult lives. Or do they?
Life On Hold Due To Student Debt
In this blog post, I talk about the profound impact that student debt is having on young Americans and what to do about it. If you want to learn what it really means to be free to choose wisely and not foreclose on your dreams, I encourage you to listen closely to what young people have to say about student debt.
“I make a respectable salary but I can’t get approved for a car. I could never own a home. I can’t afford to travel or have children. I am 31 and live in someone’s basement. Student loans are the home/family I pay for but will never have.” —ASA Survey Respondent, 2015
“I have a job that I hate and makes me miserable but it is the only one I could find that would pay me enough for me to make a dent in my loans. I wish I could do something I enjoy and make less money but that will never happen.”—ASA Survey Respondent, 2015
“We both have excellent credit, and absolutely no debt other than student loans. We had set aside $7,000 to use as a down payment towards a home. But, we were denied a home loan because ‘we simply had too much student loan debt.”—ASA Survey Respondent, 2015
The sad truth is, young lives put on hold threaten to overshadow whatever gains a college education may afford them. A recent survey conducted by American Student Assistance (ASA) found that those with student debt are holding off on buying a home, getting married, having children, and saving for retirement because of their debt.
The survey shows just how much student loans are impacting the day-to-day decisions young adults make. As one survey respondent commented, “student debt weighs on every decision I make, from food shopping, to where I choose to live, to how I spend my free time, to what clothes I wear, and ultimately, what career I choose.”
Career Foreclosure Due To Student Debt
Student debt limits not only their ability to make major purchases, but also their ability to choose to follow their passion. For those with student debt, there’s often a disconnect between obtaining a higher education and fulfilling their higher purpose.There's often a disconnect between obtaining a higher education and fulfilling a higher purpose. Click To Tweet
According to the survey, student debt causes more than half of young adults to walk away from a good career fit. Some forfeit their chosen professions in favor of higher paying jobs that help them pay down their debt. Others must settle for jobs that don’t require a bachelor’s degree that keep them treading water indefinitely in a sea of student loans. Remember these are the ones fortunate enough to get jobs and keep their creditors at bay.
In The Grand Scheme Of Things, How Important Is Student Debt?
So what does it matter if young people are making different career and life choices so long as they are fiscally responsible?
The need to pay off their loans drives some of the best and brightest young adults away from jobs in public interest fields such as education or public service, which ultimately affects us all.
Student loans are also forcing career choices that hold back innovation and entrepreneurship. Of those intent on starting a small business, 61% point to student loan debt as the primary reason for their inability to do so.
So what does it matter if the next generation of entrepreneurs are sitting on the sidelines of life? It matters a whole lot given the fact that small businesses account for 64% of new private-sector jobs and 49% of private-sector employment.
So long as student debt continues to crush the entrepreneurial spirit of this generation, we all stand to lose out as young adults are forced to put their lives on hold.
What’s the real cost of career foreclosure for all of us? It’s fair to say that society pays a hefty price for what Julie Ryder Lammers describes as “career paths not taken, first homes not purchased, entrepreneurship stalled, public sector employment diminished, investments not made, and lives delayed.”
The Biggest Financial Aid Mistake You Don’t Want To Make Comes Down to School Choice
You’ll be surprised to learn that the biggest financial aid mistake you don’t want to make has less to do with the FAFSA or the CSS Profile than you might think.
The truth is, the biggest financial aid mistake has more to do with school choice than anything else. The biggest financial aid mistake has more to do with school choice than anything else. Click To Tweet Your choice of school has the potential to make or break your chances of realizing your higher education hopes and dreams.
Choose wisely and you get to enjoy all the life-affirming benefits of a college degree. Choose unwisely and you risk a life-numbing existence that more often than not ends in career foreclosure.
What To Do About School Choice
- Commit. Don’t fall into the trap of becoming passive financial aid “recipients.” Instead, commit to becoming proactive empowered higher education consumers determined to make a smart financial choice.
- Think Long-Term. You’ll make wiser decisions about which schools to apply to and which financial aid package to accept if you take a long-term view. You’ll borrow less and borrow more wisely–if in fact you must borrow. By thinking long-term, you may even find a way to graduate debt-free.
- Be Realistic. Don’t make college all about getting into your dream school even if it means you have to mortgage your future or raid your parents retirement savings to pay for it. Be realistic about how much you borrow so you don’t burden yourself or your parents with unnecessary debt.
- Get Smart. Learn the right way to research, apply to and pay for college. Apply to schools strategically. Learn how to position yourself to choose the best value for you and your family. Don’t just sign on the dotted line for financial aid without questioning if it’s in your best interest.
- Do the Math! The goal is to find the right school at the right price. If the numbers aren’t financially doable, it isn’t the right school. Keep looking until you find a school that is both a good academic and financial fit.
You won’t find a good college fit if your school choice is fueled solely by emotions. If crunching the numbers doesn’t keep you on the path to honest savings, then the problem probably isn’t that you can’t figure out how to wrap your head around how to pay for college. The problem more than likely abides in your heart.You won’t find a good college fit if your school choice is fueled solely by emotions. Click To Tweet
If that’s you, then you could probably use a little more help learning how to strike a balance between using your head and following your heart when it comes to choosing the right college fit.
When it comes to school choice, what do you need to reach your goals? What are your wants versus your musts?
Confident that you’ve made a smart college choice? Share your story. Share your thoughts and comments in the text box below. I’d love to hear from you.
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Reading Corner. For additional help with school choice check out John Zurick’s recent blog post. Want to learn more about the profound impact student debt is having on young Americans? Click here to read the full 72 page ASA report.