Student debt is a big problem. We’ve heard the frightening figures: total American student debt is over $1.6 trillion, and it’s going to increase to $2 trillion by 2020. It’s at the point where economists fear it could trigger a new recession. Each day, there are more horror stories describing how yet another person’s life was ruined by insurmountable debt.

Most headlines focus on the symptoms of debt. We hear about people crushed by loan interest, worry how student debt negatively affects the economy, and argue about whether cancelling all loans is a good idea. But there isn’t as much reporting about the cause, the preventative side: How do so many people end up with crushing student debt in the first place?

The first-order answer is simple. Loan debt is high because the cost of college is way too high - exorbitant tuition costs force students to take out loans that they just can’t pay back. But that only answers part of the question. Why do so many students choose to take out loans that they find they can’t afford? Is it a lack of knowledge? Is it because the loans are predatory? Is it just people making irresponsible life choices? Is it just bad luck?

I had little initial insight here, because I’ve never had to take out a student loan. I’m lucky - my college career (computer science at UT Austin) was 1) relatively inexpensive, 2) conducive to summer internships that could pay for college, and 3) backed by support from my parents. So I did some digging: I read through Reddit threads of horror stories, listened to podcasts talking to debtors, and looked at raw data, among other things. The goal was to investigate one question: If someone was harmed by using student loans to go to college, what was their initial thought process when they made the decision to take out the loan?

The most consistent pattern was that there wasn’t enough of a thought process. Most students negatively affected by loans didn’t have the guidance to make an informed choice when choosing to take out the loan. There were usually two criteria:

  1. Lack of informed support - the student didn’t have access to someone knowledgeable about loans. Either they didn’t have the financial support of their parents, leaving them to decide by themselves, or they did have the encouragement of their parents, but their parents were equally misinformed.

  2. Ungrounded future planning - the student didn’t consider post-college plans when making the loan decision. The student may have picked a college and major combination that didn’t make financial sense, or didn’t correctly factor in the effects of having the loan debt post-college. Often, this was coupled with overestimating college performance and the ability to find a job after graduation.

This resulted in a set of scenarios that came up over and over again - the most common archetypes were:

  • A student believes that a small, private college is one of the best places to study what they’re interested in. Because it’s a small, private college, tuition is high, so they take out loans. After graduating, however, they find out that their field of study makes it hard to find a job that lets them pay back their loans quickly. This was most common among humanities majors.

  • A student is on the fence about going to college, but chooses to enroll because they’re told college is a worthwhile investment. They take out student loans and pick a major that they think will pay well. However, a year or two in, they find that their major - and possibly college - isn’t a good fit for them. At best, they change majors, resulting in a delayed graduation and more loans. At worst, they drop out of college with debt and no degree.

  • A student intends to pursue a field they know leads to high incomes post-graduation. Since the field pays well, they take out heavy loans - believing paying them back will be doable. However, after graduating, they have trouble finding a high income job that can pay back the loans quickly. This was most common among careers requiring a lot of investment in schooling, such as medicine and law.

Many of these scenarios could have been avoided if the students had better advice. At the time, these students didn’t have a sense of what exactly paying off a loan would look like. They had no one explaining the financial impact of $50k worth of debt. A recurring quote among students was that the loan amount “just felt like a number - something that didn’t feel real.”

It’s absolutely ridiculous that society asks graduating high school seniors - people who are 17 or 18 - to make such impactful financial decisions. In high school, I had no idea how $100k worth of debt would actually affect my day-to-day reality - to be honest, I wonder if I even have that sense now.

The real solution is to fix our college system so that students don’t have to take out gigantic loans in the first place. But that’s going to take a while, and until then, there’s a major, preventative responsibility we have: We should teach students how to reason about taking out student loans. If we do that well, we can at least alleviate some of the burden of student debt.

As of right now, that advice is not accessible enough. Half of the websites that turn up in a Google search claim student loans are evil in any situation, while the other half suggest that a college degree is worth any price. The correct answer is somewhere in the middle: Loans make sense for some situations, and don’t make sense for others. Good advice should teach prospective students to consider all of the factors - like what college they’re going to and what they’re majoring in - and show them how they can adjust some of them to minimize their debt. At a minimum, that’s helping them think through questions like:

  • How much in loans they should take: Where are you going to school? If it’s a private college, is it possible to have an equivalent experience at a cheaper public college? Are loans a requirement, or is it possible to find financial backing through scholarships, grants, or other forms of support?

  • Their ability to pay back the loan: What are you majoring in? What are the career options for that major? What is the typical post-graduation income?

  • Whether student loans and college make sense in the first place: What percentage of people regretted this major, this college, or their choice to take out student loans? Are there alternative paths to a traditional four year degree?

High schools teach students to get into college, but don’t teach students to think about these answers. The result is that students overestimate their post-graduation incomes, overestimate their abilities to find a high-paying job, and underestimate loan payback periods. Asking these questions might lead to very different outcomes - fewer people may choose to go to college, or enrollment in lower-earning majors may fall. But that’s most likely a good thing: it’ll prevent decisions that students regret later.

The most effective place to do this would likely be in high schools, by training parents and college counselors. However, the internet can help as well. As a small step, I created a website,, which aims to present some of the above advice in a way that most blogs or books don’t. I’m not an expert on college advising, but I hope it will help at least a few students make a more informed decision.

Please go check it out - I’m curious to hear feedback. I’m also still researching this topic, so if you have thoughts on student loans or a story to share, please feel free to reach out. I’d love to hear from you.