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How to Get Through College Without Drowning in Student Debt

I love how graphics always make a process seem so much simpler than it really is. But seriously! Wholesaling is the best way for many people to get into this business. Those who are great at marketing choose to make it the only thing they do.

Part Four: Another Way

You knew I’d eventually bring this thread back to real estate investing. Didn’t you? Well, of course I would. Let’s not talk about the fact that it takes me three posts to describe a two-part solution.

Long after I graduated from university, I started investing in real estate again. I get to meet a lot of wonderful people from very diverse backgrounds. I once met a young woman who wanted to be a lawyer. Her family could afford the tuition, books, and dorm expenses for her, but it put a real strain on her parents’ finances. Continue reading →

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How to Get Through College Without Drowning in Student Debt

Part III: Pay for Your Education Without Sacrificing Your Future

Many people graduate university with enough debt to buy this nice starter house in Cameron, TX. Now add the stress of finding a job and starting a career so that you can begin to repay that debt. There has to be a better way!

One of my younger friends once told me a staggering truth while recovering from the party to celebrate his graduation from the University of Texas. “Yesterday, I knew who I was,” he began. “I was a college student with a 3.7 GPA. I lived in a dorm and had a meal plan. This morning I’m homeless and unemployed.”

Being homeless, unemployed, and facing a mountain of debt with no real hope of ever paying it off is not an uncommon situation in this country.

Unless you are born to wealth, there are only a few options to obtain a degree without also acquiring ridiculous amounts of debt. The most obvious way is to work and pay as you go. That’s what I did. I graduated with honors from both my undergraduate and graduate programs without debt by working full-time while being a part-time student.

Here’s How I Did It

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How to Get Through College Without Drowning in Student Debt

Part B: Decide If You Really Need to Go to College

Declan

Exceptionally smart (but I might be prejudiced), Declan is one of the most creative people I know. Traditional academia did not suit his learning style. Now he is building his own success story in his own manner, without being stifled by a system designed to produce employees.

The first decision you need to make in determining your financial future is whether you really need to go to college or university. I know suggesting some young people don’t need to go to college borders on heresy. After all, I have a master’s degree in Education! But the truth is:

Some people are not temperamentally or intellectually suited for an academic life.
All of our kids and bonus children are whip-smart, but many of them do not learn well in a traditional academic setting. For young people like this, being forced into a traditional education or career path can not only frustrate them to no ends, it can also damage their initiative, creativity, and likelihood of success.
This is not an excuse for academic laziness. But the decision on whether to pursue a university degree should depend on your goals, learning style, and talents. Like everything else in life, this I hope you never base this decision on peer (or parental) pressure or worse: the “everyone else is doing it” excuse.

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How to Get Through College Without Drowning in Student Debt

Gustave Doré’s illustration from the “Rime of the Ancient Mariner” depicts how student loan (or any other) debt can weigh you down when trying to get a home mortgage.
Source: Wiki Commons

Part 1: The Problem

I’ve been thinking about the student loan debt problem a lot recently. It may be the biggest albatross around the necks of the younger generations today. I would love to solve the whole problem. While I haven’t done that, I realized I know of some strategies to help prevent or minimize it in some circumstances.

This post is the first of five on the topic. I hope it is useful to somebody in some way. I know it is not directly related to real estate or investing, but it breaks my heart to see the levels of debt some kids acquire only to find out they can’t work in their chosen field with the degree they obtained.

A CNBC article claims, “buying a home can be almost impossible with massive student loan debt.” Any amount of student loan debt can make qualifying for a mortgage more difficult because lenders have strict guidelines for a debt-to-income ratio. That is, your total monthly debt payments (for cars, credit cards, mortgages, student loans….) can’t exceed a certain percentage of your gross income. That percentage can vary a little by lender, but it is always less than 43%.

So, if 43% or more of your gross income goes to debt service, no new mortgage.

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