You already know Girl Ninja and I spend a few days a week hanging out with high school kids through a non-profit organization Young Life. You also know that we’ve gotten to know these kids pretty well. Whenever our friends ask us when we are going to have kids I always tell them “We already have kids.” About forty high school kids that is.
One of our Student Leader’s is a Senior. She is graduating in a few short weeks and is heading to Grand Canyon University in Arizona in the fall. She got accepted to five different schools, some local here in Seattle, and a few out-of-state schools, but after her visit to GCU she didn’t need to consider her future any further.
We are excited for her.
Well, that’s not entirely true. Part of me is excited for her, but a bigger part of me is worried for her. Being the PF nerd/blogger that I am, I feel like I should sit her down and explain to her exactly how student loans will impact her finances upon graduation.
A quick check of the school’s 2013 tuition, housing, and other fees indicate it will cost around $30,000 each year. Or in other words, 4 years at the school is gonna run each student about $120,000. I’m pretty confident she isn’t getting a huge scholarship, and I don’t imagine her single mom can help a ton. Let’s just assume she’ll graduate with $80,000 of debt, after working part-time and qualifying for a few scholarships and/or tuition assistance programs.
Lord knows when I had decided I wanted to go to a small private school in San Diego, no one was going to stop me from getting there. You coulda told me I would have $200,000 in loans and I wouldn’t have cared. Debt is so foreign to most high school kids. They don’t really have incomes and they don’t really have expenses. Why the crap would they know or care how interest impacts student loan repayments?
Normally I wouldn’t feel obligated to have a Personal Finance intervention with someone else, but in this case I feel like I have to. Not because she is going to be $80,000 in debt. But because she is going $80,000 in debt so she can be an elementary school teacher.
This girl doesn’t know that $80,000 means she’ll be making $850/month payments for 10 years just to get rid of them. What’s more, while I’m sure she knows starting teachers make between $30k and $40k depending on the school, she definitely doesn’t know how health insurance, income tax, rent, groceries, etc can destroy a paycheck.
If she was going to school major in business, chemistry, or engineering then I would just mind my own business since those fields have potential to earn a significantly higher salary. But when she is going to have an $850/month student loan payment on a very predictable $2,200/month budget, I have to at least break down the numbers for her. I mean she’ll have $1,400/month to cover literally everything else; food, rent, car, phones.
This makes me very sad. Although I feel like I should say something, I probably wont. I feel like if I sat her down and broke all this down for her, I’d only be doing it so I could say “Told ya so“ four years from now when she walks across the stage with a diploma and a fat student loan obligation.
Maybe I should just tell her to check out this really cool blog I know called Punch Debt In the Face
Do you intervene when you see someone putting themselves in a financially stressful situation? Even when they have the best of intentions? Would you have really been able to be talked out of your college of choice after you had already sent in your deposit money?