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9 Biggest Lies About College and Student Loans

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Student loans can turn what should be a blessing—an education—into a burden.

Dave Ramsey’s financial coaches have seen far too many families struggle to repay educational debts while their marriages, mortgages and careers hang in the balance. One such family owed an unbelievable $800,000 in student loans!

It’s a familiar problem that’s plaguing the nation, as total student loan debt now exceeds credit card and auto loan debt. So what can Americans do about it?

For starters, our coaches say you can stop believing these nine lies about higher education. Then you can start believing the truth that no debt is good debt—no matter how many letters it puts behind your name.

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1. Lie: In order to be successful, I need a four-year degree.

Truth: A bachelor’s (or master’s) degree can open doors, but hard work keeps those doors open. Some of the world’s wealthiest businesspeople didn’t even finish college—think technology tycoons Bill Gates, Larry Ellison and Michael Dell. They’re proof that the traditional route isn’t the only path to success. Other options include trade schools, community colleges, apprenticeships and good old-fashioned entrepreneurial drive.

2. Lie: I have to go out of state for the major I want.

Truth: Enrolling in an out-of-state public university can increase your costs significantly. Like $10,000 to $20,000 per year significantly. That’s not even considering the flights to get there or the long car rides home. Plus, many students change majors at least once during their academic careers—if not more. So think twice before heading across the border.

3. Lie: My future employer will care where I went to school.

Truth: Most employers don’t look at your GPA, and they don’t care about your alma mater. In fact, a recent Gallup survey reported that only 9% of employers place importance on a student’s graduating university, while 84% cited a candidate’s skills and field knowledge as “very important” in making hiring decisions.

4. Lie: I can’t afford to go to college without a student loan.

Truth: Yes you can! Let us count the ways: Scholarships are worth your time—apply for as many as possible. Choose an in-state university or local community college. Find a part-time job while you go to school (even a work study program will help). And look for non-traditional options like joining the military or taking a few semesters off to save up before you go.

Related: 5 Ways to Pay For College Without Loans

5. Lie: Student loans are good debt.

Truth: Debt means you owe someone money. Period. That paycheck after you graduate? Yep, you’ll have to give a big chunk of it to the government or a private lender after your grace period ends. Instead of saving money, getting married, buying a house, and starting a family, you get to make interest payments—lots of them. What about that sounds good, exactly?

6. Lie: I’ll just get all my loans forgiven.

Truth: Loan forgiveness programs exist to attract smart grads to low-paying government jobs (usually the kind no one else wants). And they come with a laundry list of stipulations. The Public Service Loan Forgiveness Program, for example, applies to specific not-for-profit employees who’ve already made 120 payments on their Direct Loans. So they’re still paying back most of their debt while simultaneously limiting their income.

7. Lie: I’ll make enough to pay back my loans after I graduate.

Truth: Will you? According to CareerBuilder, half of the Class of 2014 reported working in fields that don’t even require a college degree! They probably didn’t expect that after four long years of studying. Look, there are no guarantees you’ll find your dream job right away—it could take years. Remove a ton of post-grad pressure by refusing loans from the get-go.

8. Lie: If I lose my job, I’ll just go back to school.

Truth: Sometimes going back to school makes sense. But not when you’re unemployed with a family to support. If you already have a degree and years of experience in your field, find something temporary while you search for a lasting career. Don’t accrue debt for another set of letters when you already have plenty of money-earning potential.

Related: 6 Questions to Ask Before Going Back to College

9. Lie: If I get into a serious financial scrape, I’ll file for bankruptcy.

Truth: Student loans are nearly impossible to discharge in bankruptcy. Unless you can prove undue hardship—which is difficult to do—lenders can garnish your wages or take away your driver’s license upon default. How’s that for a reality check?

Everyone’s situation is different. If you need help figuring out how to pay for college or if you’ve already fallen into the student loan trap and need a way out, be sure to contact one of Dave’s Financial Coaches for help

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