“I am not sure what part of my comment you are construing as an “excuse” or a complaint.”

These:

“Not everyone wants to work their way through school”

“I don’t want to” is an excuse. Life isn’t always about only doing things we WANT to do.

“Every hour spent flipping burgers is an hour not spent studying”

“I don’t have time to do both” is an excuse. Lots of people MAKE time to do both.

“Not everyone wants to delay their education in order to save up for it”

“I don’t want to wait” is an excuse (and, coincidentally, the basis of the entire business case for the credit industry).

“Time spent out of school atrophies your brain.”

Balderdash. Another excuse. Lots of people take a year or two off to work and save up for college and their brains don’t “atrophy.”

“Is there anything else I can explain for you?”

I could just as easily ask the same of you, now. I thought these “excuses” were obvious. I’m not sure why I had to point them out in detail.

I’m not going to say they are inherently evil, and you are right that if you can comfortably re-pay them on your post-grad salary then you will be okay. But things change. All debt equals a significant amount of risk, even student loan debt. You could graduate in a recession and not be able to get a job in your chosen field – the field that you based your salary and debt repayment assumptions on. You could become disabled and not be able to work in that field. You could find that you don’t like it as much as you thought and that you really want to do something that doesn’t pay as well. Many things can happen, and if you pay cash for school none of those scenarios I just mentioned will equal financial disaster or limit your choices in life, while taking on debt can easily do that.

I did take out loans for undergrad and grad school. But I wish I didn’t because those payments are slowing me down from some changes I want to make in my life now. I am going to try to make sure that my kids don’t need to take out loans when they go to school.

When used appropriately, debt can be less expensive in the long run than other options.

The idea of saving up for a year or two really isn’t that ludicrous, either. It may make you re-think your commitment to the law or medicine, and devoting another few years to paying off school. You could also look at things like taking prerequisites at a local state/community college, evaluating all the options for law/medicine (including state schools), assistantships, etc. Also you can really look at the expenses in your life and see if you can do without things like a car, vacations, etc.

The student loan companies will be happy to loan you piles of money to complete your professional degree — but you should walk into that loan office already knowing what kind of money you need, not the other way around. And getting to that point means that you already know how to live on a budget and have fully explored what your budget will look like before, during and after school. There will, of course, be surprises along the way, but you should be able to adjust the plan accordingly as you go along.

I think that’s a lot of the Ramsey method — know what you have, where it’s going and where you want to go. The main problem I see with having debt is that it puts a severe restriction on the “where you want to go” part of the equation.

You’re welcome, but I am not sure what part of my comment you are construing as an “excuse” or a complaint.

You will notice that I never said that going to college without going into debt was impossible. In fact, I did it myself (I had a full-tuition scholarship). So on that point, we agree: The people who say that student loans are *impossible* to avoid are just wrong. But the mere fact that something is possible isn’t, by itself, a reason to do it. It’s possible to live one’s whole life without ever visiting The Simple Dollar Dot Com. It’s simply a matter of choosing whether or not you’re willing to make the necessary sacrificies. Is that an argument for not visiting this site? No, it is not.

You say yourself that getting a debt-free education involves sacrifices – that is, it has a downside. For some people, that downside outweighs the upside of being debt free. Therefore, they choose to take on the student loans. Whether there are other paths they could have chosen, or whether that means they’re “following the herd” or not is irrelevant. Sometimes the herd is right.

Is there anything else I can explain for you?

Thanks for the explanation, but I wasn’t looking for more excuses.

Lots of people graduate with solid educations and no debt. Somehow, they still manage to find jobs, and their brains have amazingly not “atrophied.” So it CAN be done. It’s simply a matter of CHOOSING whether or not you’re willing to make the sacrifices necessary, or whether you choose to just follow the herd, pile on the debt, and complain like everyone else.

Student loans are not inherently evil. And they only become harmful if you take on more of them than you can comfortably repay on the salary that your education prepares you for. Liz Weston has a rule of thumb that you shouldn’t borrow more than you can expect to earn in your first year out of school. If you can limit your student debt to that level (which will probably require some amount of saving, working, and cost-cutting anyway), I say go for it.

Yes, there’s an element of risk involved, because there’s a chance that you won’t find a job in your field right away, or you won’t earn as much as you thought you would, or disaster will strike and you’ll have to leave school early without a degree. But to some people, that’s a risk worth taking. If we all played it completely safe all the time – if that were even possible – the world would be a much less interesting and less prosperous place.

Somebody raised a point recently in another thread that I think is worth repeating: The interest you earn on your “safe” investments – savings accounts, CDs, bonds, etc. – is coming from somebody else’s debt. So if everyone swore off debt entirely, there would be no more interest-bearing savings accounts. Rather, banks would charge you hefty fees for the service of keeping your money safe – and that’s if they didn’t close up shop entirely.

1st of all, as another poster pointed out, Dave certainly does NOT have a problem with buying new cars instead of used. He has a problem with FINANCING a new car. If you are debt-free and have your 6-month emergency fund and are funding your retirement and kids’ educations and can still pay cash for a brand-new car, Dave consistently says “go for it!”

2nd of all, you most certainly CAN get an education without incurring debt. I’m amazed at the closed-mindedness exhibited here in the comments. “How in the heck are you supposed to get an education without taking on debt, unless you join the military?” Well, how about you take a year or two and SAVE UP for it? Scholarships, money from parents, working full-time or part-time, there are lots of options. Sure, maybe you’ll have to settle for a state college, or maybe you’ll have to live with a roommate, or maybe you’ll have to put off having kids for a couple of years … so what? Those are the sacrifices you make if you’re serious about “living like no one else.” Think outside the box a little bit.

Just the other day, Dave had a caller who wanted to go to medical school. In order to do it without taking on debt, he was going to sell his house, tap part of his emergency fund, and rely on his wife’s income to cover the bills. This guy was in his early 30’s with a wife and kids. He’s making sacrifices, but he’s going to do it, and without debt. Reading some of the naysayers in these comments, you’d think such a feat would be utterly impossible. And yet he’s doing it.

Re Trent’s comment – “Ramsey overstates his case here, though I understand why he does it. A forceful case on behalf of a good principle is a great tactic for convincing people of the principle.” I think Ramsey overstating his case for that purpose is a good way to describe his teachings in general. He tows a hard line on a lot of topics, but I think that is part of what makes him so successful. It makes his system much easier to describe and market. And giving some people permission to use a credit card responsibly can be like telling an alcoholic that there are a few times when it is ok to have a beer. If you listen to his show long enough, you’ll him give all sorts of caveats and advice that doesn’t tow the hard line. But to print all of that and try to explain it in text would take a million books (or blog posts!).

I also don’t think that *most* of his target audience is “woe is me” type of people. Those people exist, of course, but may just fell into the ideas that some debt is good and just needed a KITA in order to get turned around.

Kris #12,26 (re: student loans): explain how one would become a doctor, for example, without student loans unless one is very very rich. Hint: no scholarships AT ALL for medical school and medical school is full-time (really), not time for second jobs. Nope, not a doctor myself, but the daughter of a friend of mine is one and so is her husband.

#27 – Wall-mart issued debt in the past: http://www.allbusiness.com/retail-trade/4292355-1.html
It may be debt-free now, but it clearly needed the money in the past. Right now that it is rich it may not need to – it’s relatively easy for a retailer to use profits f

@Erin (#23) – Microsoft just issued bonds, so nope, it is no longer debt free. In fact, a friend of mine bought Microsoft bonds i.e. lent money to Microsoft. Apple is debt-free now, but it did have debt in the past.

Really, why do people keep saying how the company X is debt-free without checking it? Not everything you read is true. Additionally, every business is different. Name one biotech company which is debt-free for example? A bit easier for a retailer to keep profits from this year inventory than for a pharmaceutical company to finance years of research and clinical trials.

@Andy (#25) — absolutely true. Not to mention that people who claim some companies don’t have any debt haven’t bothered to read the balance sheet and are just repeating what others said.

For people with money credit is a tool, just like any other. I also don’t understand why people treat Dave Ramsey as a financial expert. Yes, he made money on sale of self-help books, good for him. He also helped some people to get out of debt (in most expensive way possible, by the way; in a way that ensures money wasted). But his investment advice is just awful. 12% yearly returns on the market? Yes, right.

Wal-Mart is debt free? Wow…did not know that.

To be honest, I feel the same way about my mortgage: I love my house, and I’m grateful to the financial institution (a community bank) that made it possible for me to raise my family here. I thank that bank every month when I write the check. The people who work there aren’t “evil.” It is an honorable exchange.

I think we need to move toward honorable debt, not toward seeing all debt as a bargain with the devil. When used honorably, it’s a mark of a strong, principled civilization.

When you have money in the bank, you control your destiny. Not Wall Street, not some guy in San Jose, not some bank, not a customer who knows he can get your product at half off when they wait at the most three months. You get more flexibility and more room to maneuver when money gets tight, and have the ability to walk out of a deal if it’s not going to bring in the money you would want.