I gotta say, borrowing money as school loans and then investing that money into the stock market paid off in a big way for me. But this month, I decided to pay those student loans off, because after next month, I highly doubt that I will go after another degree because, I have a Masters of Business Administration and next month will earn a Masters in Technology Commercialization. Yet all of this has me thinking back to a panel a sat on.
Last year I was asked to sit on a panel on Capitol Hill and discuss issues focusing on school debt for student veterans. While I respect the individuals who participated on the panel with me, I was struck by their focus on institutions being the cause of student veteran debt rather than the personal choices made by student veterans as being the cause for their debt. Obviously when your cause is an institution your solution revolves around the institution. For me, the cause is the individual and therefore the solution revolves around the individual.
As the moral icon of the 1990s, Notorious B.I.G, so eloquently put it, "Mo' money, mo' problems." At first glance, that doesn’t make sense, but think about it for more than a second and you’ll realize that he’s right. Isn’t the truth. Imagine if we gave a young man or woman, who grew up without any money and who learned from watching a parental figure have to live pay check to pay check, $149,200. Imagine if we told them that this money is supposed to prevent you from needing to work for the next 36 months. Unfortunately, it doesn’t take a rocket scientist or a statistician to figure out what the most probable result is of giving this individual this money. Most likely, the individual is going to find himself in debt and there is a decent chance that this individual is going to be worse off at month 37 than he was at month 1 when he received this large sum of money.
Before we go any further, you’re probably asking yourselves what does $149,200 have to do with anything? Well that is roughly the amount of money that the Post 9/11 GI Bill is worth to a veteran. Depending on which institution you go to it could be less because tuition costs do not hit the Post 9/11 GI Bill tuition cap, and depending on the BAH rate the total value of an individual’s GI Bill could go up or down. However, regardless of the individual variations, a veteran leaving the military who can use his or her Post 9/11 GI Bill at 100% is coming into a lot of money.
You would think that if we told any individual you have $149,200 with which to earn a bachelors degree they would be ecstatic. You would also think that if we then went back and told the funders who had given this individual $149,200 with which to get a bachelors degree that this individual had only $16,000[1] worth of student loan debt after 4 years of going to school and not working that they’d probably think, “that’s not bad at all.” If we went back and told those funders that this individual had $40,000 or more worth of student loan debt, they’d probably think to themselves “what poor choices did this student make?”
Unfortunately, America has a problem with enforcing personal responsibility these days. Bad choices are made every day. It is a personal choice on how to earn a degree. Do you go to a university for the full four years, or do you go to community college first and then to the university? Do you work part-time and go to school full-time? Do you go to school part-time and work full-time? Unless a university radically increases its cost of tuition between the time an individual enrolled and the time and individual graduated, that person willingly signed up to pay or take on a debt load of which he or she had reasonably full knowledge.
Instead of focusing on institutions as the cause of the problem and therefore the source of the solution, we need to focus on individual choices and teaching people on how to make better choices. As veterans, if we are knowledgeable about finance as a whole and personal finance in particular we should help those leaving the military who do not understand these topics learn about them. Those of us who left the military and earned a degree, or multiple degrees, for little to no money should show the next batch of student veterans how to do the same thing.
We need to focus on the individual making better choices, because at the end of the day, if an individual is making better choices, if an individual is making cost conscious choices in terms of which degree from which university offers him or her the greatest benefit for the cost of attending, we will have mitigated both the rising cost by universities and the rising student veteran debt level.
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Want to do some reading on how to get the most out of your time in college? Take a look at the articles below:
5 More Keys to Getting the Most Out of Your Post Military College Time
Two Years of Shit: Lessons Learned By A Post College Veteran
5 Keys To Getting The Most Out Of Your Post Military College Time
5 B's For An A+ Post Military College Experience
[1] According to varying sources the average amount of student veteran college debt ranges widely from $16,000 up to $56,000. The average US undergraduate loan debt upon graduation is $33,654
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