by Although my goal here at The Marvelwoods School isn’t to give you financial education, when it comes to college education and trying to cover the loan amounts, it’s something that everyone needs advice about it. If you refer back to something else I wrote recently, you will see me mention that not all children should pursue a college education. When someone goes in and studies liberal arts, without that helping in any way the career he/she will launch afterwards, then it’s a waste of money (and time of course.)
Likewise, students need to be smart about their finances. Not everyone can go to the high prestige university that will give you unlimited potential in your lifetime. Most of the times, people can’t get in there because of not good enough grades (lack of funds, is usually the last reason, and there is always a way to finance those students.) But say you are accepted in a more expensive school: is it expensive because it offers students more opportunity, or is it expensive because it’s located in an extremely expensive state such as California? If you have a mentality: the more expensive it is, the better, I promise you will be paying stupid money. Make sure you do your due diligence and don’t be afraid to ask around.
For example, in the field of medicine, if someone is applying intentionally only for the expensive schools, then you can understand there is a problem. That is because the salary you’ll get as a medical doctor does not depend on where you studied at, but rather what specialty you went into and where did your complete your resident studies. There are certain fields of course, that getting an expensive prestigious degree, will affect greatly the salary you’ll be drawing: MBA’s are an example of that. If you go to Wharton business school, you are signing up for perhaps the best business school in the world. The difference here is that this specific school has a combination of good courses/quality studies, and expensive tuition. There are so many lower quality schools (in general, not just business) that simply have a more expensive tuition, because they pretty much accept that children with lower grades. Going into one of those schools, doesn’t mean anything: I don’t care if you spend millions for that education.
How can you pay for college now is the question: My first advice would be, start working to save up money for college. Most likely (and depending on what you study) you won’t have time in college to work a job. So get that starting while you are even in elementary school. Everyone that is reading now probably saw the boat sail, but even if you are in junior high, you still got enough time. Above and beyond being able to get out of college debt free, this process will teach you work ethics that will carry you forever. Millennials today are lazy…as lazy as they can get for a matter of fact. They are fully dependent on grants and loans, never planning to get a job to pay those off. Or – in the case that parents have the tuition amounts in cash – they get Dad to help out. But even in that case, it should be considered a loan that the student then will need to pay back. The point here is, if you can get out of college debt free, it will be a great idea: not because I don’t like debt…I love debt! But because if you are clear and don’t owe anyone any money, you can then take out a loan to launch your business/career. Because if you got stacks of loans you need to pay off first, most likely you will get stuck at a job you don’t like and will never free yourself from, for the rest of your life. Owning a business is much better (in many cases) than working for a business. So that is kind of the route I’d like to see more and more students take. It’s even more beneficiary for society as it creates jobs (but that’s a different story.)
If you need to take out a loan, make sure you are being smart about it and getting as many scholarships as possible to pay that down. If you can work in college, that would be ideal. I know many smart college students, that take the loan money and invest in small safe investments, so that they can pay back part of the loan, while saving up some extra cash (for the launch of a business that I mentioned before.) I wouldn’t ask you to risk your future on such an aggressive move – especially if your investment idea is lame and won’t work (treasury bills seem to be the safest at the moment by the way.) After college, make sure you get a job or launch a successful business and start paying off that loan. This is not like a business loan that you don’t mind having and paying slowly. This is education loan, which pretty much ties you up for any other financial plans you got. Also, the interest rates kick in after you graduate and have an income. So you want to start decreasing the principle, so your interest payments can also decrease with it.
There you go…some financial advice to get your day started and to motivate you to work hard today!
Below I have a very interesting TEDx talk.
I’ll see you soon!
