Convincing your college student to ditch student loans is harder than you think. If you have a teenager like mine, then you know that they most likely have everything already figured out. You may be wondering why you should convince your college student to ditch student loans before they even get started.
The Interest Rate
Student loan interest rates are higher than ever before, which means this is not good when taking out student loans. Interest rates could cost your college students thousands of extra dollars. In the long run, it’s much easier to get a scholarship or pay cash than it is to pay the costs associated with a student loan.
College Students Can’t See the Implications of a Student Loan
When it comes to taking out a student loan, your college student cannot see what the future holds. Sure, they don’t need to make a payment now, but later down the road, they will. That student loan payment could affect a home loan later or just your basic need for credit when purchasing items.
More Money in Their Pockets Later
This is hard to fathom for a college student, but when they don’t take out student loans, they’ll have more money in their pocket later down the road. Try to convince your college student that having more money down the road is way better than taking out a large loan to pay for something.
Student Loans Aren’t Accepted in Bankruptcy
There may come a time when your college student cannot afford all of their debt. Bad news is that student loans aren’t accepted into bankruptcy. This is hard because so much other debt is, but student loans are currently not forgiven under a program like bankruptcy. Your college student may think they’ll never need a program like this, but the truth is, they don’t know what their financial future holds. This is why they need to be smart about it now.
Student Loans Hold You Back Financially
All college students should know that student loans are not a gateway to helping you make more money. Instead, they hurt your financial future. Student loans may seem impossible to avoid, but there are ways to avoid this sort of debt.
When it comes to taking out student loans, convince your college students to avoid them at all costs. Later down the road, your son or daughter might quickly figure out that taking out student loans was not a great idea.
It’s time I sit down with my son and show him on paper what student loan debt really looks like.