When "Skin in the Game" is Anything But

One of my favorite topics to engage in with teens and parents alike is the idea of getting through college debt-free. As you can imagine, this can be on the controversial side of the conversational spectrum. However, it’s something I believe in deeply, and I have countless examples of clients, friends, and youth group kids successfully navigating that journey. It’s one of my favorite wins to acknowledge and celebrate.

Whenever these conversations come up with parents, I get all types of responses. Please understand that I respect every parent’s opinion on the topic. They are the parents of their children and they have the right (and obligation) to lead the best they can. I will absolutely support people with whatever decisions they make with their families. In these conversations, there’s one comment I hear more than any other. They explain that their kids will take out student loans because they want their kids to “have skin in the game.” This is spoken through the lens that paying for their children’s college is an entitled approach in which their kids are not motivated to do the right thing, whereas the student acquiring student loan debt helps to align interests.

I’m all for having “skin in the game.” In fact, it’s one of the hallmarks of my coaching when walking families through the college planning process. That said, here’s what I always try to explain to parents about student loans. Having your kids sign up for student loans is the furthest thing from skin in the game as you can get. Why? Because when an 18-year-old is going to college with student loans, all that’s required of them is to sign a few pieces of paper…..then go have fun. There’s no real sacrifice, and worse, no real awareness or accountability along the way.

The student loans actually remove skin from the game. To college students, student loan debt feels like magical money falling from the sky. It enables them to go to college, pay rent, get three square meals per day, and maybe even a little pocket money……..just because. No amount of work or sacrifice goes into this. It’s the easiest form of money they will experience in their entire lives.

It isn’t until later that the reality of this debt starts to set in. By later, I mean AFTER they finish the thing they were supposed to have skin in. I call this, “the moment.” The moment when the degree is in hand, they’ve been settled into their first job for a handful of months, and are in the process of transitioning into a full adult existence…..then the letter arrives in the mail. Many of you know the letter I’m talking about! It’s the letter that comes approximately six months following graduation, communicating the commencement of student loan payments. This letter can be sobering. I owe how much!?!? My monthly payments are what?!?! For how many years?!?! This is the moment where many emotions can come flooding in. Guilt, frustration, defeat, resentment, worry, and anger.

All the while, they thought things were alright. College was being paid for, the money was always available, and they lived a solid college career. Yeah, they knew they would have some student loan debt after they graduated. But this much!?! This is the moment. I’ve walked alongside far too many people who had recently experienced this moment. Almost without fail, I hear the same thing from them. “I wish I would have known this is what it would end up being. If I had, I would have made some different decisions.” Ouch.

Parents, skin in the game is good. No, it’s awesome! Congrats to you for wanting that for your children. My appeal to you is to not use student loan debt as that skin.

* Please pass this along to any parents who need this encouragement today. We can shift the futures of the next generation, one family at a time!

"I Did It!!!"

One of the main topics I teach in our high school money class is how it’s possible for every single person to graduate from college debt-free. Not surprisingly, this is a very controversial idea. Our culture teaches us that we are either a have or a have-not, and our student loan fate rests in which one we are. I think this toxic belief is one of the primary reasons why much of our society is crippled with a ton of student loan debt.

Since I’ve been teaching these ideas for more than 10 years, I’ve accumulated many stories…..both good and bad. Here’s one that’s all too common. Many years ago, a young lady in my class was stunned and excited to hear that she could potentially go to college debt-free. She asked if I would meet with her and her mom to discuss it further. Of course, I’d love to do that! She comes back to class a week later, looking a bit down. When I asked her how she was doing, she replied, “I told my mom about what we talked about last week. She said you are a liar and it’s not possible to go to college without debt.” Needless to say, the family declined my invitation to discuss ideas on how to make it happen. Fast forward a handful of years and this young lady graduated college with $65,000 of student loan debt.

Now, I’ll share a different kind of story. Several years ago, there was a young man who attended the class. He, too, got excited about the idea of not having student loan debt. He really internalized the idea that he could go to college debt-free. He explained to me that his family already told him they wouldn’t be helping him in any way. It was 100% on him to pay for his college and living expenses. Yet, he was intent on graduating college…..and doing it without debt. He chose the same college as the young lady above. I haven’t seen or talked to this young man since he graduated high school. Last week, I received a random text from him that read, “I did it!!!!!” I had no idea what he was talking about, so I asked him to clarify. He went on to explain how he will be graduating college next month…..with zero debt! He was beyond proud of this accomplishment, and even more excited for what his future holds. He did it, indeed!

Same class, same college choice, similar backgrounds…..vastly different outcomes. The difference? One believed it could be done and the other didn’t. You could argue he put in the work and she didn’t, but that’s not exactly fair. He did indeed put in the work…..he worked so hard. But she’s the type of person who would have put in the work as well……had she believed the mission was possible.

Our mind is a crazy thing. The stories we tell ourselves have the power to propel…..and the power to sabotage. It’s amazing what can happen when we believe.