Dave Ramsey told a 45-year-old Chicago woman with four college degrees, an annual salary of $115,000 and $628,000 in debt that she was being scammed.
Single mother Sandra gets the call ramsay show Seeking guidance on how to address her debt problems, which included a $335,000 mortgage, $33,000 in credit card debt and $260,000 in student loans.
“It sounds like you believed the lie that if I got an education, people would give me money, but they won’t,” he said, noting that her salary was not enough to justify her academic level(1).
Sandra had to come up with two undergraduate degrees (in biological sciences and English) and two master’s degrees in library science and intellectual property law to pay off her student debt.
and engage in legal research. Until six months ago, Sandra was earning $25,000 a year from her side job as a library consultant, but Ken Coleman says public libraries are a dead-end career anyway.
Ramsey was surprised she wasn’t a lawyer, since she has a degree in intellectual property law.
“Can’t you go sit at the bar?” he asked.
Sandra responded that she wasn’t sure and she would have to research it.
“You got a research degree,” quipped co-host Ken Coleman. “You should probably look into that.”
That’s what Ramsey and Coleman agreed she needed to do.
Ramsay and Coleman said Sandra needed to make “big money” if she wanted to have a chance of getting out of trouble.
“If we can find a way to apply that education so that you make more money, then you have a lot of education and therefore a lot of upside potential in your earnings,” Ramsey said. “That’s what you need. More money, not more degrees. You collect more degrees than a thermometer.”
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Ramsey warns that a degree is meaningless if the job market doesn’t require the skills you learn.
“The knowledge you gain when you get a degree — knowledge is huge power now, assuming that’s the knowledge the market wants.”
Ramsey and Coleman suggested that Sandra aim to pass the bar exam and become an attorney, potentially earning $300,000 a year.
In the meantime, Coleman said, she might start a side business using her knowledge of the intellectual property field while she studies the implications.
Ramsey suggested that she could also work part-time as a law professor, earning an extra $100,000 a year.
While not everyone is saddled with $260,000 in student loans, the total student debt in the United States is a staggering $1.184 trillion (2).
The average American balance is $39,075, and more than 11% of student loans are in delinquency(3).
Apparently, even well-paid graduates like Sandra can find their finances strained after racking up massive student debt.
A high debt-to-income ratio limits disposable income and reduces the amount available for long-term goals, such as building retirement savings or a travel budget (4).
It can also increase the risk of late payments and credit damage, while making it more difficult to obtain additional loans in the future. (5)
That’s why it’s important to do everything you can to address your own student debt.
Start by calculating exactly how much total debt you owe, your loan interest rate, and the specific types of student loans(6) you have, as these will affect your repayment plan and forgiveness amount.
Consider using avalanche method. This means taking care of your loans (student loans and other loans) at the highest interest rates first to avoid loan inflation.
In the meantime, pay only the minimum on your low-interest federal student loans until you are able to contribute more.
Alternatively, use snowballing method. This means paying off your smallest debt first to show yourself real progress and stay motivated.
Of course, the best way to avoid unaffordable student debt is to selectively choose higher education programs with a higher, potentially faster return on investment. us news Point out that nursing, engineering, finance, and even technical trade programs outside of traditional universities are good options (7).
If you already have a degree and want to re-earn it, here are a few things to consider:
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Does your career field require the next degree, such as licensing certification?
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Are you guaranteed a higher salary after graduation?
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Does your employer offer tuition remission as a benefit?
Answering these questions may help you make decisions and impact your debt levels after you complete your degree.
We rely only on vetted sources and reliable third-party reports. For more information, see our Editorial Ethics and Guidelines.
The Ramsey Show (1); Education Data Initiative (2); Federal Student Aid (3, 6); Wells Fargo (4); Marine Corps (5); U.S. News (7)
This article provides information only and should not be considered advice. It is provided without any warranty of any kind.
