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Comments about ‘Life and debt: Pay off student loans and get your life back’

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Published: Monday, June 16 2014 4:15 a.m. MDT

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Momathome
Roseville, CA

I had to laugh at the research that showed that students with no debt had more wealth than student with debt. Yes, we see that all the time. Our recent college graduate had to put herself through college, so now he has debt. He has chosen not to take any of the "easy" payback plans, but is putting everything he can towards paying it down. He also pays for his own rent, food, clothes, car, gas, insurance, etc... He has many, many friends whose parents continue to pay all living expenses after college, on top of having paid for college, so they have no student debt, and their whole paycheck can be tucked away in the bank. Yes, those students will have a lot more accumulated wealth, but it's not because they were able to pay off their loans faster. It's because mom and dad pay for everything.

Michael De Groote

A study by Upromise by Sallie Mae found that roughly 85 percent of parents plan to offer their children monetary aid after college graduation. About 50 percent say they plan to foot bills for their kids from 6 months to 5 years after graduation.

Momathome in Roseville, CA is correct that people are being helped by parents will have more wealth. It is also correct that the sooner people can get out of student loan debt, the sooner they can build their wealth. But there is a lot of causation/correlation questions one can ask about the survey about young households and debt and wealth.

There have been a few articles I've read recently that talk about how it is better to invest some money than pay off student loans right away. The idea is that, mathematically, a person who invests earlier will have much more money in the end than if they first concentrated on paying off their loans.

The problem with that idea, however, is people do not generally behave mathematically (as Rachel Cruze says in the article).

Johnny Triumph
American Fork, UT

@MomAtHome - I got two gifts from my parents that I treasure and hold as the most important things I ever got from them. 1) a work ethic and sound appreciation of money. They taught me how to work and how to value what I earned, to the point that a trip to Vegas once found me entirely upset that I lost $20 of my hard-earned money gambling; I haven't gambled any money since then. And 2) they paid for my University experience. I've been on sound financial footing since that day and I owe it all to them. Please don't write off those whose parents helped pay for things, it's truly one of the very generous things that parents can do for their children; I'm already planning and saving to do the same for my 4 children!

Michael De Groote

I found it interesting that Rachel Cruze's dad (Dave Ramsey) could afford to have sent her anyway for college, but only helped her up to the level of an in-state school tuition. I mention this in my article on graduating from college with no debt: http://po.st/XMCtPR

raybies
Layton, UT

There's also the possibility that the government will step in and allow students to refinance their debt as many students are finding it impossible to find steady employment, have degrees, but are weighed down by student debt.

jazzer
St. George, UT

I paid all my semesters up front with cash, while working a full time job paying for rent, food, school,insurance, vehicle payment and fun. I don't think it's that hard to do. Good for me! School is done, and I don't own a dime to anyone at university/community college.

Nan BW
ELder, CO

We have three grandchildren in college. Two are fortunate enough to have scholarships. The third worked while in her first year, and is working this summer. One with a scholarship is on a mission, but he worked during his first year too. The second one with a scholarship has a summer job. Their mothers never had any college loans because they worked too, and drove old rattletraps right into their marriages, when their husbands took over maintenance of those old Impalas. It isn't always possible to get through college without loans, but many more students could do so with frugal living and careful resource management. I've heard of students who ran up huge credit card debts from ordering pizza! If parents teach their children good common sense and money management, students debts can be much smaller or not even needed.

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