I can't think of too many loans that are more dangerous than student college loans. 18 year old high school students are walking into a mine field every year, and society is doing nothing to help them. What makes student college loans dangerous? Let's find out.
Reason # 1: 18 Is Too Young To Make Such A HUGE Financial Decision
At the age of 18, 3 years before being able to drink a beer, college students are required to make one of the biggest financial decisions of their lives. Do I borrow money for college and, if so, how much do I borrow?
Most 18 year old students have never paid a bill before. But, we require them to be able to understand finance before having any experience with paying back debt. 18 year old college students are making financial decisions that will affect their entire adulthood at such an early age. That is crazy!!
Reason #2: 18 Year Olds Receive No Financial Education
It is a shame that our education system does not value financial education. We unleash high school graduates into the wild world of personal finance with almost no formal financial education. Unfortunately for our high school graduates, within months of graduating, maybe even before graduation, such students need to make this huge financial decision. I believe that our educators are committing malpractice by not providing a formal personal finance education in high school.
Reason #3: You Might Not Like Your Career Choice
Another reason why college student loans are so dangerous is that at the young age of 18 people don't really know what type of career they want to pursue. In fact, our colleges are turning out college grads who still don't know what they want to do for a career.
If you make the wrong decision for a major in college, in many ways you have wasted your money. Now your student loan debt is toxic because you might not be able to afford to pursue your desired career because of the mistakes your made at age 18.
I would like to blame this on a lack of career counseling both in high school and college, but this over simplifies the problem. The truth is these young adults don't have enough life experience to truly know what they want out of life and what they will enjoy doing.
What this says to me is that there is a fundamental flaw with our college education system. College is too expensive for students who don't know what they want to do for a career. This is too expensive of a mistake for us to allow it to perpetuate.
We could say then those students shouldn't go to college yet, but I would say that a majority of high school graduates don't know what they want to do. This means that there is a problem with the structure and scheduling of university education.
Reason #4: Young Adults Don't Understand Debt
In many ways, this topic was covered above in reason #2 above, but I wanted to hone in on this issue a little more.
What are college student loans? In many ways they represent the cost of being able to do the type of work that you want to do. But, must high school graduates do not truly think about them this way.
To high school graduates, student loans are just something that everyone incurs to pay for college. College students don't really understand how painful paying them back is going to be. The numbers are huge, and due to a lack of financial experience, student have no basis from which to understand the magnitude of the number.
Many college students don't truly understand the significance of interest rates, subsidized loans and unsubsidized loans. They simply don't have any experience with debt and its consequences. Heck, many adults don't really understand debt. But, we ask high school kids to make these decision every year.
Problems I Face With My Student Loan Debt
As you know, I have a lot of student loan debt. My financial life began with a mountain of debt. I have never lived as an adult without this yoke around my neck. Unfortunately, I am not alone. Every year more and more college students take out student college loans as naively as I did.
Related posts:
subscribe to the 
follow The Debt Hawk on 
{ 3 trackbacks }
{ 0 comments… add one now }