A Frank Discussion on Debt

With the start of another academic year right around the corner, chances are you have already made the financial arrangements necessary to pay for another year of education. If you are like most students, debt, be it through student loans or a credit card was the dominant method of payment. I was in the same position back in 1998, and I proceed in the exact same way. My behavior resulted from my acceptance of two statements I had heard since birth. First, success is this world necessitates a college degree. Second, acquiring debt for the purposes of attaining this degree should be seen as an investment in my future. The reason these statements resonate with many of us, lies in the fact that we have come to accept them as dogma. Here I do not seek to attack the student loan system or to criticize those of you who have taken on loans. Remember, I was one of those students too. My impetus is to remind you that there is a cost to the student loan paradigm that we freely accept, and that there is an alternative to student loans if you are willing to make concessions and work diligently to avoid the use of debt.

As I examined the funding of my three degrees (Bachelor’s, Master’s, and now PhD), I noticed something interesting. When I pursued my undergraduate degree (1998-2002), $21,000 (the bulk) of my funding came through student loans. Yet, from 2007 until the present, spanning two degrees, I have yet to use debt as a form of payment. So what changed between 2002-2007?

No, I was not independently wealth, nor had I accrued a generous savings account that I could tap into for funding. In fact, my wife and I took a 70% pay cut when I went to graduate school. I had not increased my intellectual acumen, nor increased my ACT or SAT scores, so graduate school was not paid for by my institution. I believe my paradigm had drastically changed. What twenty-six year old me knew that eighteen year old me did not was the potential hindrances and dangers of student loans. Yes, they provided a means to an end (i.e., the degree), but in the end, I was required to repay what I had borrowed. . . with interest! Saddling yourself with fifteen years of a set monthly payment is fine when you are on your own, but if you choose to marry and start a family, this is a burden that most would choose not to bear. This small change in thinking led me to do everything in my power to fund my later degrees without the use of debt.

I already know what some of you are thinking; in the beginning I thought it would be impossible too. I had to make some concessions: 1) attended a less prestigious school due to the price of tuition, 2) lived in a less favorable apartment to save on housing, 3) cut frivolous spending like eating out to a minimum, 4) picked up a couple of part-time jobs, and 5) applied for scholarships with reckless abandon. While, these may not seem favorable to you, they were the price of a debt-free degree.

As I conclude let me reiterate, that I am not out to degrade the student loan system or those who have taken on loans as a funding vehicle for their education. What I do want to highlight is that contrary to what you have been told, loans need not constitute the majority or totality of your funding. You have alternative methods and if you choose to use them, a debt-free degree is within your reach.