Thursday, October 28, 2021

Millionaire Choices: Controlling Debt, Part 2

Let’s focus on student debt. In the first quarter of 2019 student loan debt was 1.41 trillion dollars according to Experian and The College Board. This exceeds all kinds of debt with the exception of home mortgages. Between 2011 and 2018 the average undergraduate tuition and fees increased by 17%. About 46% of first-time, full-time degree or certificate seeking undergraduate students were awarded loan aid in 2016-2017, according to the Bureau of Labor Statistics. Charts of the average cumulative loan amounts by degree and institution type and of degree and certificate completers who received loans are included with this article for review.

OK, now we know some facts about student loans. Of course, these are historical facts. So, what may be done prior to going deep into the arena of debt? Ideally, a full-ride scholarship would lighten the burden. However, since so few receive such a pass, let’s consider what some of our readers (both parents and students) offer as possible courses of action to reduce loan dependency.

  • Apply for financial aid and if rejected find out why. Next, if it was incomplete revise the application to be in compliance and reapply.
  • Take a part-time job.
  • Start with a community college degree program that includes a full articulation agreement with a four-year college that would grant full junior status upon admission for a bachelor’s degree.
  • Carefully choose a major. Switching a year or more later will extend graduation time and definitely require more tuition.
  • Take a work/study gig.
  • Be fully aware of job opportunities and likely salaries with the major you choose. The wrong choice may generate a pile of debt and a nominal salary.
  • Explore government subsidies.
  • If a military veteran, pursue the Veteran Administration education benefits programs.
  • Work hard for scholarships and apply to multiple providers.

Of course, there is a correlation between education level and earnings. Additionally, there is a significant relationship between degree type and earnings potential. So yes, education counts. The most appropriate education for each student is the key to success. Keep in mind that researchers Dale and Krueger revealed in, The Quarterly Journal of Economics, that student ambition is a better predictor of earning success than which college they ultimately choose. Carefully choose a college and a major and then sharply focus on timely completion. Succinctly, greater efficiency equals less cost.

Be sure to follow the Millionaire Choices advice columns for your personalized lifestyle enhancements.

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New York Times bestselling author William D. Danko and Richard J. Van Ness, wrote the research-based book, “Richer Than A Millionaire ~ A Pathway to True Prosperity,” which shows the way to wealth and happiness through embracing traditional values. Washington Post’s Michelle Singletary selected this book as The Color of Money Book of the Month. The $8 billion Vanguard Charitable fund website features our book.

Content appearing in this article is inspired by the authors’ book. The book is available at and bookstores.

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