Proverbs 22:7 carries a grim warning about debt: “The rich rule over the poor, and the borrower is slave to the lender.” Nowhere is that more true than with student loan debt, now just over $1.75 trillion. But you don’t have to be part of that statistic. We’ll talk today with Howard Dayton about how you can avoid it. 

Howard Dayton is the former host of this program and the founder of Compass—Finances God’s Way. Howard has written about student loan debt in the past and has come across some numbers that should make anyone think twice about falling into that trap.  You can read more of Howard’s wisdom at Compass1.org.

• STARTLING COLLEGE DEBT STATS
• According to one survey, millennial-aged college graduates are spending a whopping 18% of their salary on student loan payments, and 60% of them expect to be making payments on their student loans into their 40s.
• But it gets worse! The survey also found that average student debt for millennials is more than $41,000, and a third reported being clueless as to their loan’s interest rate.
• What’s even more surprising is that many millennials aren’t willing to adjust their lifestyle to pay it off their student loans more quickly. For example, less than half of those surveyed were willing to cut what they spend on eating out and entertainment.
• The last big discovery of the survey: fully one-third of the grads said they would have skipped college altogether if they’d known how expensive it would be in the end.
• Howard has come up with five ways that students and their parents can keep from drowning in student loans. 
• 5 TIPS FOR AVOIDING THE STUDENT DEBT TRAP
• 1. Start preparing early! Urge your high school-age kids to take dual credit classes that will count as college credit. I know of one couple’s 17-year-old son who graduated from high school having earned 90 college credit hours. When he enrolls in college, he’ll have completed the first three years of college free!
• 2. Another option is to enroll in a local community college the first two years to complete your general classes or to work full-time and take online college classes, which are typically much less expensive.
• 3. Secure as many grants and scholarships as possible by investing the time to research every possible opportunity.
• Did you know that according to the National Scholarship Providers Association, an estimated $100 million in scholarships goes unused each year because no one applies for it?
• 4. Encourage your children to work full-time during the summers, and part-time at college after their first semester. That first semester they should get acclimated to the college routine, but after that, they can look for a part-time job, and then apply what they earn toward college costs.
• Even working just 10 hours a week could easily pay for the next semester’s books.
• 5. Parents need to start saving early to help their kids pay for college. The 529 education savings plan is a great way to do that, and you can encourage grandparents and other family members to contribute to it with cash gifts for Christmas and birthdays.
• And here’s one bonus suggestion: Don’t cosign for your children’s student loans or take out any loans yourselves. 
• Everything should be in the child’s name only. He or she has more time to pay off a loan than you have to save for retirement.

On this program, Rob also answers listener questions: 

• Does it make sense to take money out of an IRA to pay off a home equity loan? 
• What is the best way to plan for the distribution of assets to heirs, even if a surviving spouse remarries? 
• How do you determine the right time to start drawing Social Security benefits? 

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