Graduation time is near, and families will, after two difficult years, join to celebrate an important milestone in the lives of their graduates. Mixed with all the elaborate pomp and circumstance should be the harsh reality that student loans could make them indentured victims buried in endless, mounting debt. The popular book by Dr. Seuss Oh, the Places You’ll Go! will change to Woe! The Money You’ll Owe!

Recently, I was the commencement speaker for a state college and a local high school. I encouraged the students to make wise decisions about their futures, and I also reminded them not to get student loans. I could tell by the groans from the audience that my advice came too late for some of them. Many will leave or graduate from college with staggering debt and limited job opportunities.

Are Student Loans a Good Idea for Your Children and Grandchildren?

US News and World Report states that 55 percent of recent college graduates carry student loan debt. According to Student Loan Hero, 48 million American borrowers owe more than $1.75 trillion in debt to student loans. The average student loan debt, taking in account 2021, has increased to $40,329 according to Credit Summit.

The crippling consequences of owing so much money means young people won’t be able to buy a car or a house, and the American Dream will become a nightmare. Also, marrying someone with student debt means the debt is shared by the couple. If both partners have large student loans, their combined payments could be more than a regular house payment.

Alternatives to a Student Loan

There are alternatives to getting a student loan. First, not everyone needs to go to a four-year college. There are reputable trade schools and community colleges that provide a low-cost education that results in rewarding jobs. Staying in the state of residence is a wise decision, especially for core classes.

High school graduates also can postpone college, obtain a full-time job, and save money for future college expenses. At the risk of sounding like an old curmudgeon, that’s how my generation prepared for college. We also worked during summer, holiday, and spring breaks.

When people are invested in earning money for their education, they take it more seriously. The current student loan program, in my opinion, provides easy money and many young people don’t have a clue about the unforgiving payback rules.

To help with college expenses, students should learn about and apply for academic and sports scholarships, grants and work-study programs. Many high schools offer advanced placement courses that allow graduates to enter college as a sophomore and potentially graduate in three years. Because of the pandemic, many colleges now offer online courses or have gone fully online, which saves on housing expenses.

As students go back to college, they can live in a dormitory instead of moving into an apartment, which brings added expenses and responsibilities. Living at home with their parents is an option for many students, and that’s a better situation than being forced to moved back with parents because of student loan debt.

Finally, students should give careful thought about choosing their course of study. Graduating with a degree in history without a teaching certificate while carrying an $80,000 debt isn’t the best decision.

How Can Grandparents and Parents Help?

These young people will be trying to refinance their loans to avoid default, and will look with envy at the success of their friends who became plumbers or mechanics. As parents and grandparents, we can encourage our students to pursue their dreams and use their skills, but if they want to major in a field with low salaries and limited jobs, they shouldn’t get a student loan.

A recent Kiplinger report about the worst college majors listed anthropology, art, photography, culinary arts, music and graphic design as majors that result in limited jobs and low salary. Kiplinger noted that the best college majors included pharmacy, nursing, chemical engineering, construction services and management information systems.

The starting annual salary for a computer science major is more than $68,800, and there are more than 2.2 million online job postings. Compare that to an exercise science major with a starting annual salary of $35,200 but only 1,000 annual online job postings.

The average student loan debt now is $30,000, and it would take almost 12 years paying $300 a month at a 6% interest to pay off that debt. The interest payments by then would be almost $12,000, making the total cost $42,000, and that’s not counting inflation. Conversely, if a person started saving $300 a month for 12 years at 0% interest, the resulting balance, would be more than $43,000. Easy decision?

As parents and grandparents, we can offer advice, support, and encouragement. And the best gift to our graduates could be an interest calculator.

Let’s Have a Conversation:

Do you worry about the burden of student loans on your children or grandchildren? What do you think about the current student loan situation in the country? How can we encourage our children and grandchildren to avoid debt? Please share your thoughts in the comments.