Ramit Sethi: Why You Should Take Out Student Loans

Ramit Sethi: Why You Should Take Out Student Loans


you know what everybody’s telling you these days don’t go to college student loan debt is horrible it’s the worst thing on earth I disagree I think that student loan debt can be a great investment if you aren’t thoughtful and methodical about it I’d like to make my case to take a look at the difference between people who graduate from college and people who don’t do you know the lifetime earnings of a college graduate is 1 million dollars higher than an on college graduate just think about that here you have a bunch of people telling you oh don’t spend $20,000 on college or don’t graduate with $15,000 in student loan debt now I get it nobody wants to sit there and look at fifteen twenty thirty thousand dollars of student loan debt I get it but if you actually look at the full lifetime earnings of a college graduate a million dollars compared to fifteen thousand dollars it’s not even a question and I see this all the time from my readers they say you know what I took that advice I dropped out of college and it was fine I was earning good money until I got into my forties and suddenly I hit as smooth so I want to encourage everyone here to not just take advice from a bunch of people on Twitter we’re telling you drop out of college student loans are bad those very same people are sending their kids to elite colleges the amount you pay for college is one of the biggest investments you will ever make of course you should run the numbers you should look at the major you’re cheating what’s the average income there you should look at the college you’re going to how long does it typically take students to graduate and you should also remember there are a lot of non-monetary reasons to go to college building a new Network becoming an informed citizen there’s a ton of reasons so I’m not saying everyone should graduate with a hundred and fifty thousand dollars in student loan debt don’t do that be thoughtful think about the college you’re going to but don’t buy the typical advice that everyone seems to be throwing around these days saying college loans are the worst they’re not and people who graduate from college have a million dollars plus in lifetime earnings compared to non college [Music]

31 thoughts on “Ramit Sethi: Why You Should Take Out Student Loans

  1. HR 2366 would end the student loan crisis by returning bankruptcy rights to all student loans. Ask your Congressman to cosponsor HR 2366 today. Join your state chapter of StudentLoanJustice.org on Facebook.

  2. Theres so many variable of factors this guy is not explaining. Student loans is one of the worst things to do and that comes from credibility accountability of so many financial experts and specialist.

  3. The thing is Student loan are bad for students who just don't have monetary knowledge, but be smart, choose your major smart, tech is on boom and will continue to grow, and smart a side hustle, you don't have to start a YouTube channel but you can sell stuff on the side….but off of Craigslist and sell it on other e-commerce site….be smart about what you are getting your self into

  4. This is bad advice. It fails to take into account interest, fees and capitalized interest and fees. This is what makes balances such as his $15, 000 example EXPLODE to $50,000 and more. It is a debt trap you can never escape from. In addition, if you become employed after college, you are more likely to be under employed relative to your education field. Also remember that student loan payments are made with after tax income and the interest is NOT TAX DEDUCTABLE. You can deduct interest on mortgage debt but not student loan debt. Someone explain this. Someone explain the stripping of all standard borrower protections from student loans. What kind of a country does this to its citizens ?

  5. I think he makes a good point in running the numbers and better understanding if it is worth the investment. While I agree student loans are not a good thing to take out if you can afford not too, it is true that there is a high correlation towards people who graduate college and higher incomes. If you are taking out student loans, you need to run the numbers and understand how quickly after your graduate that you can pay back those loans.

  6. I would love to see when those studies were done because if they were done before the price of college skyrocket than it can affect the results. Also, more people are going to school so that effects competition. So sometimes it is better to build a business than go to school since you are not competing for a job which is a limit resource.

  7. The issue, I believe, is accruing interest. If debt is less than 40k it can be aggressively paid off in 3-6 years if one has a fulltime job and pays over double the minimums. That's what 2 of my friends are doing.

  8. You can build a network and become an informed citizen without college. And not everyone who goes to college graduates. So yeah if you are gonna use loans be sure to keep them to a minimum and plan to finish. But most cases are people right out of high school who assume college has to be their next step and use loans to pay for everything instead of working. Thumbs down

  9. This guy is comparing a college degree versus working at McDonalds. Now compare a College degree to Technical Degree or skill trade

  10. Cite your source bruh. Coz they've been saying this BS since the 1980s… back when a college degree actually had value – today EVERYONE has a degree so its has become devalued. Go tell the baristas with college degrees that it was smart of them to get $80k worth of college debt only to end up working at star bucks for minimum wage.

  11. Choose a major in a field that is in demand, pays well, and takes the least amount of time to get your degree. Choose a community college and transfer if possible. Work while you are in school to pay your tuition off. Forget about the big name schools unless you are getting a full ride or significant partial ride. Student loan debt will haunt you for the rest of your life. Make smart decisions.

  12. Wow, harsh comments here…. I'm a financial advisor, and I thought the advice in this video was spot on! I took some student loans for undergrad and grad school and paid the rest with scholarships and out-of-pocket money. Took me about five years to pay off the loans. I wouldn't have the career I have today without that education. And like he said, there are non-monetary benefits. I made friends for life, gained a network, and become a better citizen of the world. College is not just about getting an education–it changes the way you think. I'm much more open-minded and cultured than I was before. And regard to my financial situation, I'm just fine–much better than average, in fact. I just bought a home earlier this year and have a large investment and retirement portfolio. If you need student loans to go to college, do it! It's okay to take on debt for an investment in an appreciating asset like your education. Student loans have reasonable interest rates and don't even start accruing interest until you graduate. Just make sure you do some budgeting, pick the right school, choose a worthwhile major, and do the math to figure out what type of job/income you can get when you graduate, then have a plan to pay off the loans. The opportunity costs of otherwise not going to college are just too great.

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