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In the life of a college student, nothing is certain except debt and classes. With recent budget cuts that have slimmed down class catalogues and even eliminated programs, it seems the only thing we can count on for sure is that we will graduate owing somebody a lot of money.
Or somebodies. The heaviest hitters are the lenders, with more than 60 percent of U.S. undergrads holding a average debt of $23,700 according to American Student Assistance, a non-profit organization that helps students manage their loan debt.
But it’s not just loans we have to worry about. Sallie Mae reports that the average college student has also accumulated more than $3,000 in credit card debt. Some also have car payments, insurance premiums and expensive drug habits to cover.
The sad truth is that most of us will experience graduation not as a joyous celebration of accomplishments and the beginning of a bright future but as the end of an extended grace period after which the interest-sucking debt collectors come pounding on the door. Debt has been deeply ingrained in our collective psyche as a necessity of life, but this was not always the case.
Most of our great-grandparents thought debt was foolish. Some didn’t even trust banks — hence, the occasional story of a new homeowner finding a million dollars in pennies stuffed inside a mattress or a hole in the wall.
Even companies that now make millions from plastic originally abhorred debt: A 1910 Sears catalog declared, “Buying on credit is folly,” and the founder of J.C. Penney was nicknamed James “Cash only” Penney for refusing to accept credit as payment.
We’ve come a long way since then. Not all of us are in the red, but we have all been infected with thinking debt is OK — a way of life, even.
I hope MasterCard doesn’t make me pay for saying this, but debt is a bad thing. It makes you into a slave — bound by rich lenders, no longer able to use your earnings as you wish. Nobody relishes the idea of paying off people at interest, so why don’t we make more of an effort to avoid it?
I’ve been lucky: I have in-state tuition, a few scholarships, a good part-time job and my parents help with the rest. Not everyone has these advantages, but there are still a few easy principles you can use if you wish to start climbing out of the hole.
It all starts with discipline. We are fortunate in this country to have the right to take charge of our finances — so use it. If you don’t control your money, your money will control you.
Start making reasoned spending decisions, from how you eat to what you wear. If your credit card is a problem, cut it in half — you don’t need it. If you don’t have money for something, don’t buy it. Here’s a novel idea: Save your money for what you need; buy what you want only if you can afford it.
Get a part-time job. You can likely make as much as you would from a Stafford loan without a cent of interest. It may not be the greatest employ, but it’s bearable for a few years and better than debt.
Finally, start budgeting. It’s easy to learn, and it’s empowering to see what you can and can’t afford without living paycheck to paycheck.
Sometimes, perhaps, debt is unavoidable. But it’s far more preventable than we think. The consequences are real. Irresponsible borrowing and lending contributed significantly to the Great Depression in the ’20s and the recession we’re still suffering today.
Don’t resign yourself to debt as though it were inevitable. There are free resources online for avoiding and managing the problem, and with a little bit of work and self-discipline, we can all be on our way to a liberated, happy future.
Tyler Francke believes a penny saved is a very small amount of money saved.
Bangor Daily News