What We Teach High Schoolers About Student Loans

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MM Note: I recently connected with Kyle and I was so shocked about his story, that I had to have him on the blog. This is really important. High Schools are where student loan debt begins and what students are being told is absolutely shocking. We all share the responsibility to educated students on students loans, but Teachers can have the biggest impact.  

I’ve been a high school teacher for nine years. And it’s downright scary.

No, not because any moment can be caught on SnapChat, Instagram, or Facebook.

Because, high schools are becoming a promoting ground for debt.

Yes, you heard me correctly.

Students are being taught that taking out large student loans is okay and that going into debt is completely worth it.

Unfortunately, I was taught the same thing. Because my family had only saved only a few thousand dollars, I had no choice. I went to school with student loans.

I was told, and taught my whole life that student loans are a viable and good option to further your position in life.

college tuition price changes

College tuition costs continues to skyrocket = more student loans

“Student loans are good debt!” I was told. They were just normal.

I took out loans and owed over $30,000 by the time I graduated. Then I carried that debt for 6 years. Until I was 28 then I finally bucked the system and went on an 18-month journey to bust my way out of “normal.”

Now I’m a high school social studies teacher. So what do we tell our students? Has counseling on career readiness and student loans gotten any better?

No, it’s gotten worse. A lot worse.

For all of you who aren’t high school teachers (and maybe for some of you who are), here’s the inside scoop.

It’s ingrained in kids today that “if you don’t go to college, you won’t get a good job and you’ll die poor and lonely.” Seriously. That’s what they are told.

Sure maybe not in those exact words, but you get the point. The message is everywhere. Go to college. Take out loans. Do whatever you can to pay for college. It will be worth it.

Do I think high schoolers should go to college? Sure. I am all for higher education, I really am. But it’s not the only path. And taking out student loans isn’t the only option.

What I am not for is the atmosphere that we are pushing kids into:What We Teach High Schools Student Loans

You didn’t get scholarships? That’s ok, student loans are available.

You didn’t work throughout high school? Student loans to the rescue!

Your parents didn’t save for college? Get a student loan and you’ll be a winner today!

The reality is, student loans are almost looked at as “a good thing.” This is absolutely insane to me. Debt is not a “good thing”. It took me awhile to learn this, but I’m a firm believer in the theory of “it’s hard to save money if you owe someone else money.”

No one, and I mean no one, is telling them how serious taking out a big loan is. The way it’s sold is as almost like “free money,” that sure you’ll have to pay back in the future, but don’t worry by then you will be making LOTS OF MONEY.

But is that true? Let’s look at the numbers:

7 in 10 college seniors graduate college with nearly $30,000 in student loans. That number is only increasing as college costs are at an all-time high. Also, the compounding interest is crippling new grads and their future savings potential. Say you graduate with $28,400 in student loans. Your cost is not just $28,400. Your loan carries an interest rate of 4.66% and you loan term is 10 years.

Your total cost over the lifetime of the loan: $35,583.

And that’s on the low side.

If you do have student loans, check out Credible where you can get a much lower student loan refinancing rate, which could easily save you thousands and thousands of dollars over the life of the loan.

It’s ok though, you’ve got a good job now that you’ve graduated! You can buy a house, a new car, have a few kids and live happily ever after!

Not exactly. Student loan debt is crippling millennials into lives and decisions they never thought they’d have to deal with. We are pushing back marriage, home ownership is a pipe dream, and kids? I barely want a dog at this point! Seriously, I’m 28 and how can I think about affording kids? Not anytime soon for sure.

Studies have also shown that if you have student loan debt your retirement accounts will grow at half the rate of those without debt.


So how do we fix this atmosphere that “student loans are good debt.”

Change with the people who have the biggest chance to impact our kids: Teachers, counselors, and parents.

Instead of taking a career exploration class, let’s make it mandatory that all kids take a personal finance course where they have to have a plan for their financial futures.

Not fantasy world, give them a house and a car. Real world examples.

I believe that simple financial education in high schools is the key to solving the student loan crisis.

There is no more impressionable time for students than when they are in middle and high school. Teachers and Counselors see them and impact them more than most people, including parents. We are around them the most, we have the opportunity to change the trend.

It will take some difficult and blunt conversations, but it’s necessary if we want to reverse the trend.Education systems as a whole need to stop promoting student loans as “a good thing”. If you want something, work for it. If you want to go to a private out of state school, you better be getting good grades and applying for so many scholarships your junior/senior years of high school that you get carpal tunnel from writing so much.

You better plan on working 20+ hours per week WHILE in college to start paying off those loans early, not to mention continuing to apply for scholarships. You better go to school with a plan. It’s ok to explore your career path, but spending 2.5 years doing “general studies” might as well be gambling in Vegas.

We need to educate these students with information that can set them up for success in their futures.

We don’t need to send them to a diploma factory only to come out in worse financial shape than if they would’ve worked at McDonald’s for four years.  

Kyle is a personal finance blogger who paid off $33,000 of student loans in 18 months! His goal is to share strategies, tips, and tricks for getting out of debt and saving money! Check out Kyle’s blog at dollardiligence.com

Follow him on Twitter @dollardiligence

Learn More: Read our in-depth post on How Student Loans Work.

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  • Comment Author image blank Carol Jones says:

    Oklahoma requires it as a graduation requisite, too. At least since we moved here in 2016.

  • Comment Author image blank R Patterson says:

    I teach in Texas. We are required to teach personal financial literacy per the state. We have curriculum in econ covering it, College Math covers it, Math of Money covers it, multiple business electives cover it, and I taught a course called “Personal Financial Literacy”. This curriculum has been required for all students for years. Stop spreading a false narrative to sell books. We can debate the effectiveness of teaching it vs what they learn from their parents, but I as a teacher am trying.

  • Comment Author image blank Mary Crapo says:

    I have been teaching high school math for 30 years. I feel it is a travesty that we do not teach any consumer or personal finance to these students in the 12 years we have them. We spend hours and hours on finding x, and calculating by hand problem after problem. Many teachers do not even let the students use calculators, which is an important tool for them to actually learn how to use. The problem lies here: To get to college, you have to succeed on the SAT and ACT test. Those tests do not have any personal finance questions, and do not assess any real life math that is applicable. Students have been trained to only learn what they are going to be tested on. Colleges only want them to take classes meeting A-G requirements, and Personal Finance does not meet that requirement. Until this is changed, the students will take 4 years of HS math, but won’t know the difference between interest earned and interest paid.. So, their $$ is all spent on training for the SAT/ACT tests, so they can get to college with student loan debt that they don’t even understand. how to deal with. It is so frustrating. Change has to come from the ones who hold the cards – College Board, ACT.org, and college requirement lists.

  • Comment Author image blank Lindsay @ Notorious D.E.B.T. says:

    I love this idea, and I’ve been thinking about it for a while.
    The only reservation I have is HOW to get the importance of personal financial planning across.
    You can teach someone about compound interest, how to make a rudimentary budget, and how credit cards work, but if they don’t have a way to assign meaning to these things, the message you’re trying to teach them won’t get across.
    For example, when I was in high school we had a “consumer math” class where we learned about compound interest. I couldn’t have given two hoots about it at the time because it didn’t mean anything to me. I even saw the charts showing how much your money grows, but the message was totally lost because it didn’t mean anything to me then. Now I know how hard it is to make money and I’m like “Yeah! Give me ALL the compound interests!” But back then, the value of money was lost on me.
    I think a lot of high schoolers are in the same situation. What’s the best way to get the message across in this case?

    • Grant Sabatier Grant @MillennialMoney says:

      This is a great point Lindsay. I agree it has to be made personal, which is the tough part when you don’t have any money.

  • Comment Author image blank Matt @ Distilled Dollar says:

    I like the idea but don’t see how it can be executed.

    If teachers/counselors/parents were taught by say some program that says “student loan debt is good,” then the simple solution is revamp the program. BUT, teachers/counselors/parents are just reiterating what society as a whole says. So, who will be there to teach them how to teach?

    I love the idea and I think this is a GREAT opportunity of our time to change the way the system works.

    As more data becomes relevant, I hope that message resonates with parents, teachers, and society as a whole.

    My pipe dream is decades from now kids will scratch their heads and ask silly questions like, “Did “student loans” mean some type of student exchange program back in the day?”

    • Grant Sabatier Grant @MillennialMoney says:

      Or we could just make public hight education actually free. I saw an idea recently, where instead of taking out a student loan – the student could pay for their education by simply pledging a % of their future earnings up to a certain threshold. So Universities essentially are investing in their students. Pretty cool idea. Thanks Matt.

  • Comment Author image blank Chris @ Keep Thrifty says:

    This is terrifying. There are cases where student loans make sense, but no personal debt should ever be looked at as good debt.

    Especially debt that doesn’t clear when you declare bankruptcy!

  • So important to make sure people – adults and students – really understand the loans they’re signing up for. Too often it’s easier to play ostrich and put your head in the sand, because those loans come due “later”. Well, later comes one day and you’re going to spend part of every month working to pay for those classes, that may or may not be adding value to your life at that point. Great post!

  • Comment Author image blank Steven Goodwin says:

    We definitely have a lot of work to do! I think it starts with teaching our kids how to handle finances at home as parents too! If we can at least start there by handling our finances well in front of our children, you would think more of it would rub off on our kids. Plus, when we as parents start handling money better, there usually will be more leftover to start helping our kids attend college and graduate debt free. By teaching them good work ethic and that money comes from work, they will learn to understand the value of money and not go crazy, attending an out of state school because “the logo is cool” or “the campus is pretty”.

    • Grant Sabatier Grant @MillennialMoney says:

      This is a great point Steven. You definitely have the right idea. I’m generally concerned that a lot of parents just don’t know there are other options to pay for college and take out loans themselves too! The entire narrative needs to change around paying for college and that loans should be a last resort, and in many cases might not be a good investment. This ROI calculation of student loans is very tough to make and that’s the problem. Psychologically it’s hard to people to understand the implications of the loans they take out for school and pushing it into the future is easy, but in reality these loans are paralyzing the future earning potentially of hundreds of thousands, if not millions of students. I agree parents need to be more realistic as well and that the ” best most expensive school” likely isn’t the best option. Thanks again for your comments.

  • Comment Author image blank Linda at Brooklyn Bread says:

    This is such an important statement on the higher education debacle in this country. Student loans are the albatross around the neck of countless young people. The cost of college is so far out of what is realistic for most people, it’s laughable, And the debt collectors are a step above a loan sharks when it comes to student loans. As long as we preach easy money in the form of debt for life to kids who haven’t a clue what this really means, there will never be a market solution. You are absolutely right – they need to start learning about money in high school if, as a society, we are so quick to entangle them in decades long debt obligations when they aren’t even old enough to drink legally.

    • Grant Sabatier Grant @MillennialMoney says:

      Thanks Linda. I don’t know of any schools that have high school personal finance classes, but it’s something I’m personally working to address further in 2017! It’s a national crisis.

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