Student Loan Meltdown
Dave has one of his biggest blowups ever after hearing about the student loan debt a caller got into, and what she chose to do after school.
QUESTION: Sarah in Texas and her husband make $66,000 a year and have $219,000 in debt. Included in that is $130,000 in student loan debt. She got a psychology degree but now she's a stay-at-home mom because she can't get a job. They are in the process of inheriting his mother's $160,000 house that has $40,000 in liens. What should they do here?
ANSWER: If mom’s house sells for $160,000 and you owe $40,000, that’s $120,000, which cleans up a bunch of your mess. You need to clean it all up before talking about buying another house. As far as whether you keep the $14,000 truck or not, it’s just one of the debts here. It’s not the deal breaker; it’s the student loans that are the problem. It’s not a big enough deal to sell the truck because it doesn’t move the needle enough.
If you want to work your debt snowball until the house sells and then pay off everything but the student loan, and then put a chunk toward the student loan, then all of those payments you guys used to have can be used to attack the student loans. You should be able to clear them in a while.
If you say the mother’s house needs $8,000 of work, I wouldn’t spend much more on that house. I’d just sell it as is and get it sold now. Cut the price and it will sell. This is not an asset you get to maximize. You are not in the rehab business in Knoxville when you live in San Antonio and you’re broke with $130,000 in student loan debt.
You need to get this house sold, and then yes, I would use the $20,000 to clean up the credit cards and the hospital bills and pay off the truck. That leaves you $40,000 on this house in Knoxville owed and $130,000 on the student loan debt. When you get the house in Knoxville sold, you are going to be just about out of debt with these two things coming to you.
But then you guys are going to have to quit freaking spending money that you don’t have. It’s time to not borrow any more money. You’ve been making a mess here and it’s got to stop.
I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit. I’ve taken so many calls like this. Where are the parents here? If your kids are that stupid, jack them up! Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.
I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity! I’m not mad at this particular lady that just called. This concept is driving me bananas!
If you have a 20-year-old or an 18-year-old walking around, grab them by the ear and tell them they should not get a useless degree from a private university that you cannot making a living with and then choose to go home and be a stay-at-home mom with $100,000 in student loan debt.
This is how life happens. You say you’re going to be a professional at something and then you change your mind—YOU LOST THAT OPTION! You lose these options when you go this far in debt. You are forced into a situation where you are choosing between your children and student loan debt to get a useless degree!
You know what a psychology degree without a master’s degree is worth? NOTHING! Nothing! Absolutely nothing! You can’t get a degree in a factory with that degree! You know what a theology degree from Columbia is worth? NOTHING! It has no marketplace value! Think, people!
This is what’s going on! You’ve lost your ever-loving minds, America. You are stupid about education—how paradoxical is that? You wander in, spend any amount to get a degree and act like the student loan tooth fairy is going to come in and pick up your stuff. There is no student loan tooth fairy! You have to think.
Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!
It’s out of control, people. Somebody’s going to have to stand up and say enough already! It’s not the institution’s fault, it’s the parents’ fault! Parents, tell your children to not be stupid and don’t assist them in this stuff. Don’t assist them to go hundreds of thousands of dollars in debt to get a degree that has no marketplace value. This is ridiculous! THINK, people!
Stupidity with education choices is about as paradoxical as anything I can think of. It’s got to stop. It’s destroying the American family. It’s destroying the economy. It’s ridiculous!