A huge question when it comes to going to college is should you take out The Pros And Cons of Student Loans 2022 and that is what we’re going to be talking about the origin of student loans why they’ve kind of gotten out of control why they’ve gotten.
So high and what you should do about it first of all let’s talk about how much college is going to cost now it’s going to be slightly different depending on what study you look at or what data you look at but basically the total cost of college if you add in rent and your cost of living is going to be somewhere between 80 to 100,000 for a four-year bachelor degree.
You’re also going to go on average almost 40,000 in student loan debt right so that’s about 20/25,000 per year for four years of total cost now when i say a four-year degree a lot of the time people are going to end up taking more than four years for a four-year degree sometimes they end up changing their major in the third or the fourth year or they just take a lot longer than it should take in order to get that four-year degree.
And sometimes that’s kind of the college’s fault now on the high side you do see some colleges charging absolutely ridiculous tuition and fees so the most expensive college in the u.s at this point anyways is going to be harvey mudd college at and eighty 77 dollars a year right behind them is going to be the university of chicago and columbia,
But typically for the different types of colleges what they’re going to charge is going to be around you know for a private four-year college it’s going to be 32,000 a year that’s about 128,000 for the full degree and that’s just for tuition that doesn’t add in all the other additional fees for a public four-year college but you’re attending an out of state it’s going to be about 23,000 a year so for four years it would be just under a hundred thousand dollars.
For a public four-year college where you’re attending it in state it’s going to be about nine thousand four hundred dollars a year so for four years it would be a little under forty thousand dollars and for a public two-year college or a community college it’s around three thousand four hundred dollars a year.
So if you attended it for two years it would be six to seven thousand right so this data is kind of just giving you a general idea of how much college is going to cost and how much you’re going to go into debt for college if you do decide to take out student loans this is of course just for the average person some people have parents that pay for all of their college some people don’t get any help at all.
So this is going to change depending on your specific situation now let’s go over student loans and talk about the things that pretty much nobody talks about but are extremely important so first of all let’s talk about the positives of taking out student loans.
The reason that this whole student loan system was created in the first place is there were many people who couldn’t afford an education right so they couldn’t afford to put themselves through college,
And so the government made programs to where basically anybody could apply to get into a college and get that paid for however they had to take out what’s known as student loan debt right so this whole system was created with very good intentions it was designed to make it to where anybody can get an education this was also back in the day where pretty much the only way for you to get an education was to go to college
whereas today it’s not like that at all there’s many different ways for you to get educated now by the way the student loan interest rates on these loans because every loan has an interest rate of course at least last year they were about 4.53 for an undergraduate loan.
And they were around 7 for a graduate or grad plus loan so the loans that you take out if you go to undergraduate are going to have lower interest rates than the ones you take out going to grad school.
Now there’s actually a lot more to that i made an entire video where i kind of compared those and all the nuances of them and basically the loans that you take out for undergraduate are much better in pretty much every way than the ones you take out for grad school.
You have more protections there are less interest rate there’s more things you can do with them there’s more ways to pay them off etc and again you can just search my site for that post if you want to check it out i believe i called it like the truth about student loans,
or something along those lines and then there was another post where i touched on it where i talked about should you go to grad school now let’s move to the con side of things the way that the student loan system was set up even though it had very good intentions created some unintended consequences when the student loan system was first created by the government only a very small percentage of people had to use it in order to go to college and those that did use it usually didn’t use it to pay for all of college it was only a small part.
Now more than half of americans who go to college have to take out student loans and on average they’re taking out around thirty seven thousand five hundred dollars in 2019. and overall students owe about 1.8 trillion dollars and rising.
This is the highest type of debt out of any type of debt out there except for home mortgage loans it’s higher than credit card loans it’s higher than car loans and some facts about student loans when you compare it to other types of debt is it has some of the highest default rates.
On top of that it can’t be discarded or gotten rid of in bankruptcy like many other types of debt there’s also less consumer protection laws than other types of loans so for instance they can take you to court they can seize your wages they can garnish your social security checks disability payments all without a court order and like i mentioned before graduate loans are much much worse than the undergraduate variety.
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And i’m not saying all this to scare you i just want you to be aware of the reality of what taking out student loans is like and you knowing the truth is going to allow you to approach this situation with caution right,
So getting a college degree can be a life-changing experience i’ve talked about this a lot on the site but people who get college degrees on average are going to make much more than people who don’t get college degrees there’s also a lot of other benefits of going to college that are outside of making money but with that being said if you are going to take out student loans in order to get a college degree you need to be very very careful.
And the truth is most people who go to college you know they’re 17 / 18 years old they kind of think of student loans like monopoly money they’re not gonna have to pay it off for another like four and a half five years probably they don’t even have to think about it,
And so they don’t really take it seriously and it all goes back to basically the way that they set the system up student loans have basically become a blank check and this is why student debt growth has grown by 500 since 1999 and it’s only going to get worse and worse if things aren’t changed,
Colleges and the entire student loan system is still back in their old you know 1900s way of doing things when in reality there are so many different ways of getting educated that shouldn’t cost nearly as much but colleges know that getting a college degree is almost like the american dream.
People dream of it all throughout their childhood parents want their children to get a college degree they know that people are very emotional and attached to it and so they know especially when you combine that with the student loan system that they can basically charge as much as they want.
Right so i kind of just wanted to go over the pros and cons and just give you a very realistic idea of whether or not you should take out student loans and really the answer is going to be take out the least amount of student loans possible for you to be able to attend college.
Now there’s many ways of doing this making sure that you’re budgeting you know living below your means working if you can you know attending colleges that are not ridiculously expensive a great idea is to attend community college for instance for two years before you transfer to an in-state school that’s going to save you a ton of money getting classes out of the way,
So you don’t actually have to take them in college and therefore saving the total amount of time that you have to spend in college it’s actually very easy if you plan ahead for you to knock off like one year of your college and that would save you 25 right there.