Questions to Ask Yourself Before Taking on Student Loans

We have been sold that student loans are good debt , but are they really? Or do they leave most people graduating with debt up to their eyeballs and working years to pay it off. 

Do these companies take advantage of young people and their lack of understanding of debt? 

In this episode - I give you 4 questions you need to ask yourself before you accept those loans.  These are good questions to figure out if taking the loans are the best option. 

⭐️ Thanks for listening! We appreciate your support - please subscribe to the show & leave a 5 star review!

🫶🏼 Follow us on instagram: https://www.instagram.com/selah_portfolios_and_planning/

📧 Want to get in touch? Email me at lauren.gage@lpl.com

Connect with Me:

Website: www.selahportfoliosandplanning.com

LinkedIn: https://www.linkedin.com/in/lauren-gage-6451a9166/

YouTube: https://www.youtube.com/channel/UCmjumeCRIIAvexdKum005_w

Transcript

00:01 All right, welcome back to the confident dollar podcast. Happy you were back here and hopefully as you're listening to this episode, you're just gaining some insight and wisdom on how to be more confident in your finances.

00:14 Cause that is the goal with this podcast is just to increase your confidence when it comes to dealing with your finances, budgeting, paying off debt, investing, etc.

00:22 So today's episode is talking about student loans. And just some questions I want you to ask yourself when it comes to making a decision about going to school and taking on student loans.

00:37 This can be for you or this can be for your child if your child is in that age of just about getting to going off to college.

00:45 I hope that you're having conversations with them. Around this topic because so many parents don't and they just let their kids figure things out themselves and their kid applies to a bunch of student loans and they just don't really understand what they're doing and they graduate with $200,000 in debt

01:02 and it just is a huge hole to dig yourself out of when it comes to starting your life off. Now, for some people and for some careers and for some situations, this is the only option to graduate college and maybe you're the first of your family to graduate college and you need to take on the loans and

01:22 I'm not saying you shouldn't. I am saying, hear some things to ask yourself and some things to consider around before you take on those loans to just make sure you are making the wisest decision for yourself or if again, if you're a parent.

01:37 You know, helping your child make that wise decision. So if you are looking into taking off student loans, a question I want you to ask yourself is this is a big one.
01:48 It's a main one. And this is one I feel like a lot of people don't think about, but it seems common sense to me.

01:52 So I don't really understand. But. As your career, your planned career, after you graduate college, how much money will you make in that career?

02:01 And will it be enough to help you pay off your student loans? Okay. Is it enough to justify taking on student loans?

02:07 Right? Now this like I said, seems like a common sense question to ask yourself, but I feel like it's one that a lot of people just don't think about.

02:17 Okay. Because I see, I've just known people personally actually that will take on debt for a degree in order to maybe become a teacher and they're just not going to make that much money and they take on, they go to a private school, private college or something and just take on a ton of debt in order

02:40 to become a teacher. And you're just not going to make a ton of money to help pay as soon as it just takes you so long with your, with your, you know, unless you get another job or, you know, work summers and all that kind of stuff, which you can totally do.

02:53 And I'm not saying you can't go that route if this is what you want to do. My point being is just, you need to consider.

02:57 Consider the job that you're getting after with that degree. And if it justifies taking on whatever amount of student loans you're going to be taking on to go to that specific school you're looking at, okay?

03:09 Consider that. Ask yourself that question. If you are going to be a doctor I get it. Like, there's a certain amount of schooling that is required and it's hard to, you know, get through all of that, paying it as you go.

03:25 And so, you know, there's just an amount of student loans that are necessary. But again, just make sure that, that your pay at the end of it all is going to, you know, be enough to help you when it comes to paying off the student loans, along with everything else you're going to have to be paying for

03:38 it, like living on, you know, rent and your bills and utilities and all of that. Okay. So that's question number one.

03:44 Question number two. Who is, or kind of I'm also one B would be, can you do what you want to do after college without a degree or with a lesser degree or maybe with just going to trade school, do you need a degree to do what you're hoping to do?

04:00 Okay. Is that, if it's something that you need now, even if you don't need a degree, maybe you don't need a degree to do with the, you know, maybe you want to get a digital marketing or something.

04:08 You don't necessarily need a great degree. You can actually get some experience to do that on your own. And work in that career field.

04:15 And I'm not saying necessarily digital marketing, but if you can work in a career field first. And you don't need the degree to do the job.

04:21 It doesn't necessarily mean you shouldn't get the degree. Cause it is good to have that backup option when getting a, you know, with a college degree.

04:27 So it might not be something you rule out, but for some people it might be at least they put it off for a period of time or they just wait and see.

04:35 And then the next question kind of like, I guess below that or to be, or I guess would be do you even know what you want to do?

04:43 Do you even know what you're going to college for? I, I think there's this I don't think I actually know that there is this.

04:53 Maybe call it ego or just pride when it comes to parents, especially in certain areas that push their kids to certain colleges because it's like oh my kid got into so and so I mean I live in California I feel like that's around us maybe that's not everywhere but that's definitely around here.

05:10 You know, and these schools so that so then what it comes down to is the schools the guidance counselors at schools are pushing for your colleges because one it makes their school look good right so if a school gets a certain amount of kids in a four-year school four-year college that is good for that

05:25 school okay is that best for that child is that best for that kid maybe not but it's really good for that school so the schools can often push it the parents are pushing it because it's great for their ego of like my kid got into you know see like where's your where's your kid going oh jc oh you know

05:43 and so there's this ego around these four-year schools when the reality is these kids have no idea what they even want to do in their future and then they get to the four-year school and they change the major three times and it takes some six years to graduate and they just wasted so much money now maybe

05:58 mom and dad are funding that whole thing for certain people yes they are and maybe in a lot of those situations mom and dad are funding that and that's how you want to do it and that's how you want to spend your money that's fine not how i would do with my kids but teach their own but if you are funding

06:11 your school do you know what you want to do if you are having to pay for your school do even know what career you want afterwards and if you don't maybe take some time to figure it out first do an internship do some other things you can do to figure out if that's a career you even pursue or at least 

06:28 while you're doing your undergrad before you get into your major do an internship and make sure that's where you what you want to pursue so you don't waste your money and your time okay so you're making sure your career is going to make enough money to pay off your student loans or at least you're asking

06:41 yourself and you're assessing that okay how much you're going to be able to make. You are seeing if your career even needs a degree okay and maybe you want to degree as a backup option but you're just assessing that too and then you're assessing you know do you even know what you want your career to 

06:55 be okay so those are the first three we've looked at right okay the next one. I want you to ask is are there things you can be doing to save yourself money so yes you know you need to go you want to go to the specific school you know you need a degree for the career you want you know you're gonna make

07:11 a decent amount of money but can you be saving money while you are in college how are some ways you can be saving money so way number one would be go to a junior college first in some states junior colleges are actually free and so you can save a lot of money by going to junior college first if you are

07:29 you're going to be proactive you have to make sure you stay on track I do think it's hard in junior colleges so you can kind of get lost in the system if you're not proactive and you're not really good at making sure you're getting the right classes you need in order to get out of the JC but a JC could

07:41 be a really good way to save money on school because you're going to pay way less and then you can finish at that higher end for degree you know for your school for your actual bachelor's degree but you started at JC that's no problem.

07:55 Looks for grants look for scholarships there are so many random scholarships and it does take some digging and time to figure out you know what you can apply for but apply for some scholarships look at what scholarships you have available don't skip that step and then another one I would say it's actually

08:12 one that I utilized when I was in school is to take more units you can graduate faster and you will save a ton of money.

08:20 So when I went to I graduated from Vanguard University here in Costa Mesa you when you my my parents paid for part of my school I paid for part of my school.

08:30 We we it was they wanted me to have skin in the game as my parents would say. I went in to be invested in my All right.

08:36 I'm in my education to be a part of paying for it. So I worked to help pay for my school.

08:42 Now I noticed and I actually thought it was kind of interesting that most people did not really consider this that I went to school with.

08:52 It was a semester We'll see you next week. We'll see you next week. We'll see you next week. We'll see you next week. So I know semesters and quarter schools are different but I was at a semester school and your flat, you know, your tuition rate for the semester paid for you to take anywhere between 

09:01 12 and 18 units. I knew a lot of people that only took 12 and they didn't play a sport. So like if you play a sport For more information, visit our website at www.beadaholique.com to purchase beading supplies and to get design ideas! In college, this is not a play to you because you do not have time 

09:14 to maybe take extra units and maybe do in your beast and that's amazing. But if you, that's for people who don't play a sport in college.

09:20 You can take between 12 and 18 units and a lot of people I knew, I vanguard only took 12. Maybe they took 15, but they definitely didn't take 18.

09:28 And my perspective was, okay, my parents have me put skin in the game and I have my skin in the game and I'm helping pay for this and we're paying for 18 units, I'm gonna take 18 units.

09:36 And I had some other reasons I wanted to graduate early too, some personal reasons, but even without that, I was I think I would have taken 18 units because I'm paying for that.

09:44 I'm paying for 18 units. I did not play a sporting college. And I had the time. I know it was, it is an extra class, but I had the time to get that done.

09:54 So if you take on more units, you can graduate earlier. I ended up graduating in two and a half years.

09:57 So, I saved a lot of money and time by taking on more units and graduating earlier. So, that is something you can do.

10:06 You can also work through school and you can pay for a certain amount and take a loan for a certain amount.

10:11 So, there is a lot of time We'll see you in the next one. And you're in college, I am sorry, but there is plenty of time to have a part-time job and to and go to school.

10:21 For the kids, I really feel like for the college kids that just go to school, they just don't have enough to do.

10:26 I would personally say they need to have at least a job. Thanks for watching! A part-time job. And the other benefit is there are actually a lot of companies that you can get a part-time job at.

10:36 That you can work for that have tuition assistance programs like Starbucks as an example. There are companies you can work for that will help you with your tuition so even better.

10:45 Thanks for watching! way to help save money and just be able to get less loans. So how can you save money on your tuition rather than take all loans and just take the loans and not work?

10:57 You know, not be thinking about that. What are some ways you can cut that down? So that was, you know, another thing you should ask yourself and look at.

11:03 And then finally you need to know and understand the conditions of the loans you are taking. Are they private? Are they public?

11:13 Are so, you know, are they, you know, federal loans? Are they private loans? Are you going to be able to refinance?

11:18 Once them later at a later date, what percent is your interest that you were paying on them? What is the payoff schedule?

11:25 You need to understand these terms before you take the loan. Don't, don't ever take a loan that you do not understand because you just think it's necessary.

11:33 Okay. That is up to you or as a parent if you're a parent for you to help your child. If you are, if you are, you know, yourself going to school, it's up to you to understand what you're taking on and what it's going to look like to pay that off.

11:47 Understand that and ask yourself that question before you go into. You actually accepting those loans. Okay. A student loans are not we've been we have been sold that this is good debt and I understand again.

12:02 Let me, you know, to to explain myself. I do understand. There are times that you need to take on debt in order to further your career and further yourself and I get it and at times that is the right decision.

12:13 So I'm not saying that's not the right decision, but I think that the fact that you were sold, it's good debt.

12:19 And so most people don't even think about it or really consider other. Their ways to pay for it or really assess or even know what the terms are.

12:28 How about just that? That is the part that I don't agree with. So it's not just good debt. Okay, it's good debt.

12:34 I'm just going to start with this debt and blindly jump into it because let me. Thanks for watching! I tell you, I have just talked to countless people that come into my office with so much student loans and they're just frustrated.

12:47 It's just, it's hard to figure out how you're even going to get out of it and they just did not understand what they were getting themselves into.

12:54 To because they were sold that it was just good debt and something they needed to do. So you just please consider these questions before you take on the student loans.

13:07 Yeah, I think that's actually all I have for you. So thanks again for tuning in and And we'll see you in the next video. We will see you guys next time.

13:11 Time.