[bdangubic]

Basically all college-bound 18-year olds understand what debt is

not to sound snarky but seldom do I read here something more wrong... if they did they would NEVER take on the kind of debt they are taking on in droves to get that paper. "debt" is one thing, you probably understand "debt" when you are a kid... understanding loans however - is an entirely different thing from general concept of "debt"

[neilc]

I suppose we’ll have to agree to disagree. I know lots of liberal arts majors who still have a lot of student loan debt in their late 20s and 30s. They knew what they were doing when they enrolled in college and chose their major, it wasn’t like cost of tuition or what an “interest rate” is was somehow obscured from them or too difficult for them to comprehend. In some cases they regret the choices they made earlier but that’s a different matter, those choices were not made in ignorance of the basic situation they were entering into.

[bdangubic]

We definitely agree to disagree… I am trying to understand your point of view but failing - if they understood the loan and still took on it does that mean that they are just being irrational? or stupid (I don’t mean to sound mean here but lacking a more PC word here…)?

[neilc]

They absolutely understood the terms of the loan. I think they do it anyway because: (1) everyone else is doing it and they don’t have a good alternative (2) career optimism. If you end up becoming a lawyer/consultant/accountant or otherwise have a good corporate job, in the medium-term your student loan debt doesn’t really have a significant impact on your life.

It’s really only a problem if you (1) choose a private college and don’t stay in-state, (2) get a degree which doesn’t have a lot of practical value, and (3) then want to pursue a low-paying field or get a not-useful graduate degree. For example, a friend of mine did her undergrad in art history, master’s in museum studies, and works for a non-profit. She’s not rich but she’s able to survive reasonably comfortably. She’s not dumb or financially illiterate, and she knew what she was getting in for.