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There's been a lot of news about student loan debt, and how it's gotten out of control, now rivaling mortgage debt as the biggest and potentially problematic type of debt out there.

Some even suggest that the debt is worse than any other debt, because unlike most debt, you can't erase it via bankruptcy.  So, once you have student loan debt, for all intents and purposes, you're stuck with it.

The government has even stepped in to reduce the impact on student loan debt, especially for those who aren't making a lot of money, to make it so that the debt doesn't prevent them from ever getting their heads above water.

It's all doom and gloom, really.  So, I thought I'd take a potentially contrarian view, and offer an optimistic view.

My optimistic thought is this: What if the current level of debt is as bad as it gets?

Before you say, “Ah, Beagle, you're crazy.  We're doomed,” consider this thought: One of the reasons we racked up student loan debt is because, until recently, everybody told us it was OK.

See, student loan debt has always been thought of as OK debt.  Why?  Because it was an investment.

How was it an investment?  Because you got a college education, which for the most part, ensured that you would get a better paying job, therefore allowing you to pay the debt back.

By and large, that all worked.  Until the most recent recession, when it was revealed, that for the first time, well, ever, that college graduates weren't finding jobs at that much faster a rate than those without college degrees, and many of those that were weren't making enough of a difference to justify the student loan debt.

That sucks.

But, my optimistic view comes in, wondering if we'll be able to learn lessons from it.

Here's a few ways I think we could learn from our current student loan situation:

  1.  We'll understand the costs better going in – How many high school kids really understand how much college costs?  Do they have an idea of what they might make and what living costs might be?  If we take the current situation as a way to better educate high school kids (and their parents) up front, better choices could be made
  2. Parents understand the importance of saving for their kids education – Many parents probably figured some debt was OK because a college grad always made more, so they didn't set aside as much as they could have.  If parents start setting aside more up front to offset the costs down the line, it could be less of a burden once the child graduates
  3. Non-traditional views of college – I'll admit, if you had suggested to me when I graduated high school in 1992 that I should spend a year or two at a commuter school or a community college, I never would have considered such a thing.  Nowadays, this is becoming a more favorable option (and community colleges are stepping up to the plate with better course offerings).  If students look at a non-traditional view of getting their degree, knowing that it could save them tens of thousands in loans, it could put less of a burden on grads.
  4. Making a better commitment up front – Both during college and grad school, I was friends with a pretty substantial number of classmates who ended up not completing their degree.  This seems like a big waste.  Many people who don't follow through end up with loans and don't even have the benefit of a degree.  If students take their education more seriously and have better guidance programs up front, better decisions could be made that could reduce this type of situation.
  5. Buckling down – At the same time, I know a number of people with whom I started college that got their degree the year after I did.  Why?  Because they took an extra year to complete college.  Now that the financial costs have been better publicized, if there is a commitment to completing degrees in the ‘traditional' time frames, loan balances could be reduced.

Notice that each of my reasons has the word ‘If'.  And, they are big ‘ifs'.  But, they're also important and I believe obtainable if we collectively educate our students, our parents, and even the educational institutions themselves. 

What do you think? Is student loan debt spiraling out of control or could today's eye-opening lessons provide the groundwork for a more stable path moving forward?