Dave Ramsey Says It's Stupid To Go Into Debt For A Career – 'You Don't Borrow Money To Cross State Lines'

Dave Ramsey, prominently known for his philosophies on debt – going into and getting out of it – recently shared a clip on social media that reiterates his stance on student loans. Specifically, he advises against taking on debt to attend an out-of-state school. 

Ramsey's post on X included the strong statement, "Love your kids enough to help them with this decision." In the clip, he stated that parents should guide their 17- and 18-year-old children in avoiding unnecessary debt by choosing more affordable, in-state colleges. 

Don't Miss:

• The average American couple has saved this much money for retirement — How do you compare?
• I’m 62 Years Old And Have $1.2 Million Saved. Is This Enough to Retire Stress-Free?
• $100K Sitting In A CD Account, Should I Move Money Into The Stock Market?

According to Ramsey, students can receive a quality education without leaving their home states and attending schools that can cost four times the tuition expenses. "You go to the University of Tennessee if you live in Tennessee," Ramsey said, adding that "to cross a state line and quadruple the cost of doing it and not have the money to pay cash for it is STUPID!" 

Ramsey's advice comes at a time when student debt in the U.S. is substantial. Data from LendingTree shows that around 46.2 million Americans have federal student loan debt, with the total student loan debt exceeding $1.74 trillion as of mid-2024. This includes $130.28 billion in private student loan debt. And the financial burden isn't just on recent grads; it impacts nearly all age groups, from graduates to retirees. 

Trending: Can you guess how many retire with a $5,000,000 nest egg? The percentage may shock you.

An article from Ramsey Solutions on the student debt crisis notes that federal student loan debt has surpassed most other types of debt in the U.S. Student loans now only trail behind mortgage debt. High levels of borrowing like this have real consequences that affect people's ability to make major life choices like buying a home or starting a family. According to Ramsey Solutions, nearly half of all student loan borrowers delay significant milestones because of their debt burden. 

The influence of student loan debt on American life is significant. LendingTree reports that 51% of bachelor's degree recipients who graduated from four-year colleges in 2022 had some form of student debt. Public college graduates carry an average of $20,700 in debt and private college graduates average $22,200. With the average monthly payment for student loans around $460, graduates often spend years allocating a substantial portion of their income toward paying off this debt, limiting their ability to save and invest.

See Also: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here’s how you can earn passive income with just $100.

Debt is often a complex reality for those considering college. Ramsey advises that students avoid debt – or at least minimize it – and consider these costs when choosing a school. 

For some, it's not always possible to avoid student loans. According to experts, it's important to approach student loans carefully, weighing the potential benefits of an education against the long-term financial impact. Federal loans tend to offer better terms, like income-driven repayment and forgiveness options, making them preferable over private alternatives. However, students should still be mindful of borrowing limits, as taking on too much debt can lead to significant financial strain postgraduation.

Experts advise setting a realistic borrowing goal by estimating postgraduation earnings to navigate this challenge. Students should aim for a total debt amount that doesn't exceed their expected starting salary, using resources like the Bureau of Labor Statistics and net price calculators to help make informed decisions. Though student debt may seem unavoidable, with careful planning and a focus on affordability, students can limit their financial burden and set a strong foundation for their future.

Read Next:

• Many are using this retirement income calculator to check if they’re on pace — here’s a breakdown on how on what’s behind this formula.
• Studies show 50% of consumers think Financial Advisors cost much more than they do — to debunk this, this company provides matching for free and a complimentary first call with the matched advisor.