According to the Consumer Financial Protection Bureau (CFPB), student loan debt in the United States now exceeds $1.2 trillion. To offer some perspective, that’s roughly the gross domestic product of Mexico. CFPB further estimates that 1-in-4 student loan borrowers are either delinquent or in default on a student loan, and other reports suggest that among the latest cohort of students, five-year default rates have crept up to 30 percent. While presidential candidates are offering policy solutions to contain the crisis, Alex Chediak’s new book, “Beating the College Debt Trap: Getting a Degree Without Going Broke,” invites students take responsibility for their own financial futures.
Whether you’re applying for college or have your degree well underway, it’s a worthwhile read. If paying for college is a bit like Dante’s “Inferno,” consider Chediak your faithful, Virgilian guide. He navigates school and major selection, federal financial aid abbreviations, repayment plans, work study vs. outside jobs, and professional pitfalls. Didn’t know that making more than $6,310 in pre-tax dollars will raise your Expected Family Contribution (EFC) by $0.50 for every additional dollar you make, but that work-study won’t raise it a cent? That private student loans can’t even be discharged in death, much less through bankruptcy? Or that consolidating your loans will lower your monthly payments, but prevent you from paying down the debt with the higher interest rate first? Every would-be college student will want to know these facts before deciding how to finance an undergraduate education.
[pq]Beating the College Debt Trap is about making financial decisions that will allow you to flourish in every area of life.[/pq]
Many readers will resonate with the recurring story of “Emily,” a recent graduate staring down ten years of loan payments that don’t fit into her $40,000 starting salary (a generous figure for many). Chediak breaks down her monthly budget, which is already at capacity, and then tacks on the minimum student loan payments. Emily’s discretionary income quickly evaporates—and perhaps some of her grocery money too. For students deciding between a name brand education and a generous financial aid package, living in the dorms and living with family, or a summer abroad and a summer job, this story may prove instructive. And the advice doesn’t stop after your first visit to the financial aid office. The book offers helpful tips for controlling personal expenses at school, landing your first job, and managing that long-awaited paycheck.
Chediak is a realist. He isn’t peddling an empty promise to get you through a four-year degree at a private college without a cent of debt to your name. Nor is he trying to dismiss a diploma as an unnecessary “piece of paper” that should be CLEPed away. He recognizes that many colleges and universities provide lifelong networks and invaluable intellectual and spiritual formation. He recognizes that credentials are important in our economy and that a lucrative service job is not always superior to the assistant position that offers identity capital and an on ramp to one’s desired field. Aside from a few ironclad injunctions (read: avoid private loans at all costs), Chediak offers the facts and asks his readers to weigh their options and choose wisely.
The book is crystal clear on this point: unmanageable debt will hinder you from pursuing your professional and personal goals. Even more importantly, freedom from debt means greater freedom to serve God with your time, talents, and resources. When you’re debt-free, you can take a financial risk to start a new business, spend a few years in the mission field, or give generously to the needs around you. “Beating the College Debt Trap” isn’t about padding your post-graduate entertainment budget, but rather about making financial decisions that will allow you to flourish in every area of life. Perhaps an approach to the student debt crisis that every 2016 hopeful could support.