How Much College Debt Is Too Much?

I think there should be a lot
of conversation around what is an appropriate
amount of debt, right? I think students should
have skin in the game. I think that they take
their studies more seriously if they’re taking on
some debt, so I really do believe that students
have to take on some debt. But you really want– you
know, a good rule of thumb has always been you
don’t want to take on more debt than the average
salary of a new BA, which is in mid 30s, I think,
or somewhere around there. So, you know, 30,000, high
20s probably is appropriate. Think about– don’t just think
about the overall number, think about what
a monthly payment might look like after college. But in my mind you
don’t want to go too high, because
I think it limits your options after college. I’m working a lot now talking to
students who are recent college graduates, and I’m really
amazed at the students who have a lot of options after college. You know, they could
move to different cities, they could take
different types of jobs. They could become
entrepreneurs because they had one thing not
hanging over them, and that was a big debt bill. Got it. Right. The flexibility– It’s the flexibility
to do whatever you needed to do to
launch into your career, because you didn’t have debt. Or a lot of debt. The gut feel of accruing a total
amount of debt that’s bigger than you expected
versus your income strikes me as a bad idea. So if an institution is going to
require me to put on my credit cards in a non subsidized
loan, that amount of money, I’m going to want to
know down the line, do I have a feasible
way of repaying that? And you see student after
student that just accrues 2, 3, 4, 5, 10 times that amount. And you know that at
10 times annual income, it’s going to be very
difficult to repay those loans.

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