When I ask this question in the high school classes I teach, this is generally where the smiles turn to frowns and I hear exclamations of “But wait, that’s not a good deal!” or “But now I would be paying more than the original price!” or “That’s not fair at all!”

And they are exactly right. If they pay me back 54 cents each day for 30 days, they will end up paying $16.30 for that burrito. That is definitely NOT fair and definitely NOT a good deal.

You see, if a student goes to a typical university, and after scholarships and grants ends up needing about $17,500 per year in student loans, they will graduate with a 4-year degree and $70,000 of student loan debt. If they choose the 30-year repayment plan at the typical 6.7% interest rate, they will end up paying back around $163,000 by the end of those 30 years. ONE HUNDRED AND SIXTY-THREE THOUSAND!!! I want that to sink in. That’s almost 2.5 times the original amount they borrowed, $450 per month and $5,400 per year in loan payments.

Getting back to our delicious Chipotle, no one in class wants to take my deal. In 30 days, they won’t even remember the burrito. They may have had four more burritos since then, or they may not even have an appetite for Mexican food anymore. They’ve been hungry many a time since then and the LAST thing they want to do on day 28, 29, 30 is keep paying ME 54 cents for that burrito from 30 days ago. They are straight up ticked off, fed up, and wishing they would have NEVER taken the burrito in the first place!

Now let’s compare these numbers. $70,000 in loans, $5,400 in payment each year, for $163,000 in total payments. A $7 burrito, 54 cents a day, for $16.30 in total payment. See the similarity here?? If these students are that ticked off after 30 days, imagine how incredibly frustrated they would be if they were making $450/month payments like this for 30 YEARS!

How many people at age 52 are still in a career field directly related to their degree? How many people at age 52 still remember the information or are benefitting from the instruction they received in college? How many people at age 52 had to put off earlier home ownership or starting long-term investing because they were still sending the first part of their paycheck to the government to repay their student loans?

Students, parents, listen to me please! If you wouldn’t take the chipotle deal I offered you, then DON’T take the “gift” of tens of thousands of dollars of student loans the government or private lenders are offering you! There ARE better ways to pay for your college and PLENTY of ways to reduce your costs to the point of being able to pay for the majority of, if not your entire, college education with CASH!

There are too many adults out there delaying home ownership, delaying getting married or having kids, or can’t buy their kids or GRANDKIDS nice things because they are STILL making payments for a piece of paper they received over half their lifetime ago. There ARE better ways to get your degree without piles of student loans, the improperly dubbed “good debt.” Missing out on homeownership, starting a family, and years of retirement investing doesn’t exactly sound like “good debt” to me. If you want to make a change and set yourself or your child up for an advantageous financial future, contact me today. I’d love to help your student be the one that can look back and thank their 18-year-old self for all the great decisions they made. Together, we can do this!