Comments on: Why You Should Max Out Your Student Loans

By: Ryan

Ryan — Sat, 21 Apr 2012 00:36:18 +0000

My 2 cents:

There is a lots of money out there for students (not loans), currently making all of my tuition payments on scholarships, and an additional $15K in other forms of assistance. That pays for everything I need to stay alive during school.

You really don’t need the student loans, you can find money in other places. I’m an Econ Major and actually, I could probably make a strong case for not going to college all together and just working.

The academic literature that I’ve read says the returns to a college degree is only about 7%. (Don’t believe everything about the returns to a college education that you read, find reputable sources on google scholar)If you can beat a 7% return, then you should take the money and invest it rather than go to college. And if you can’t beat a 7% return go to college, simple. Furthermore, if your interest on student loans is more than 7%, then you should probably skip college as well.

And that is probably a more blunt rule that most high school students should be told than that they need to go to college.

By: Kev

Kev — Thu, 17 Nov 2011 16:19:17 +0000

Love the article, but I also agree with kidslibrarian – it’s too much headache for today’s rates.

Tyler, did you earn 2%? I remember not too long ago you could get a student loan at 4 or 6%, deferred & subsidized, and CD rates were 5% or higher.

That would multiply kidslibrarian example from about $900 to 2.5 times that, or $2250, which is starting to look better.

But let’s take it a step higher.

I had a friend tell me he was going to get a student loan, then use it to buy a house (while in school this is a necessary expense, no rule or law breaking here). He was a grad student.

I don’t know if he did it, but if he did, and had some equity appreciation, his investment could have grown to double.

If you have the means and the understanding, this system can work.

By: Billybad

Billybad — Mon, 09 May 2011 15:13:10 +0000

I know some shady stuff but can’t give away trade secrets. Lets just say school pays off my classes, books and still pays me over 10 grand a year (summer, spring, fall). No lie but be dumb to admit what it is for multiple reasons. My advice, look into EVERY crack in the wall for education assistance and find a way to get those funds

By: Tyler

Tyler — Tue, 19 Apr 2011 16:48:52 +0000

Jack,
I’m sorry to hear that you don’t believe in this philosophy.
I’m not sure which part you disagree with though?
Investing in CDs is zero risk. Living below your means is definitely advised by all of your “reputable” financial advisors. Getting a job surely isn’t a bad thing… is it? I know it takes discipline, which is something that many college students don’t have, but the formula is solid.
Again, I’m sorry that you don’t like the article.
Perhaps you can clarify why you wouldn’t take out student loans to leverage the interest free and payment free period, while investing the money in an essentially risk free asset? (Granted CDs are not paying much these days)

By: Jack

Jack — Mon, 18 Apr 2011 22:51:54 +0000

This is extremely poor advice. Please, readers, if you’re thinking of following Tyler’s advice, DON’T!

He brags about “climbing out of” >$40,000 in student loan debt in 3 years. Good for him. Probably won’t happen for you.

Yes, if you follow all of his advice to the letter, and have the exact same life experience, talents, skills, credentials, professional network, and luck that he has, and you happen to take the wisest interpretation of everything he sometimes inartfully suggests, then you’ll do fine.

But it probably won’t happen. Here’s some real good advice: Take the least amount of student loans you can get by with. Period. All reputable financial advisors say so. Judging from his earlier comments (e.g., “I’ll be happy to approve your retraction later”), I kind of doubt Tyler will “approve” this comment, but there ya go.