Right now, Americans like you have over $1.2 trillion in student loan debt. Even worse, 1 in 3 loans are in some stage of default.
But I didn’t need to see those stats to know that the student loan crisis is real. When I polled Money Under 30 readers earlier this year, repaying student loans topped your list of financial priorities. And I get emails every week from readers trying to manage payments on student loan burdens that top $50,000 or even $100,000.
If you have student loan debt, I’m curious to know — and please answer in a comment if you’re inclined — is your student loan debt “worth it”?
Are student loans still an investment?
To me, there’s no question that education is important. The statistics are clear: over time, a college degree is still a good investment. On average, Americans with bachelor’s degrees (regardless of field) will earn about $1 million more than Americans who never attend college.
The smarter you are about it, the more you can maximize your ROI, of course. Find a low-cost school, pick up specific skills instead of majoring in sociology like, ahem, this blogger.
And you could, of course, use those numbers to justify a $200K student loan for a bachelor’s degree, as indeed a few unscrupulous college admissions reps might. “This degree is worth at least a million! Why wouldn’t you invest $200K?”
The intangible costs of student debt
But what good is a higher income “someday” if half of it goes to pay off student loans for the first 20 years?
And what if something bad happens? Student loans are not dischargeable in bankruptcy. These debts are with you for life.
But even more importantly: What do you lose by having all that debt?
Last week I wrote about how having money in the bank can literally buy you freedom. If it costs you $400 a week to live, every $400 in the bank is a week that, hypothetically, you don’t have to work. But big loan debts do the opposite of saving–they inhibit your freedom to do anything but work and make your payments, month after month.
My biggest regret about being in so much debt throughout my 20s is the opportunities lost. If I hadn’t been in debt, where might I have traveled? If I hadn’t been in debt, what risks might I have taken? Maybe I’d have been able to afford to stay in New York City, or moved somewhere new entirely.
I’ve learned to realize regret is silly, and that much of my life today that’s so good is a direct result of the financial adversity I faced for many years. That said, I think it’s important for anyone who has experienced the burden of a lot of debt — specifically student loan debt — to speak up. Both to warn college students who haven’t yet signed their promissory notes and to call attention to ballooning education costs and loose lending standards.
Broke, Busted & Disgusted is documentary in the works that hopes to address the student loan crisis and offers solutions that are pro-education, but anti-debt. You can watch the trailer below and, for the next few days at least, the movie is raising money on IndieGogo if you feel compelled to contribute. (Money Under 30 kicked in a bit.)
For now, I’m curious to hear from you. Was your student loan debt worth it? Why or why not? How much did you borrow, and for what? Let us know in a comment.