<p>I was wondering why even though college students pay the tuition. They still go into debt. Please explain to me why they go into debt</p>
<p>I assume that it’s because many of them purchase liabilities (things like cars and gadgets, which depreciate & tattoos and bodily adornments which limit earning power) instead of developing their assets (things that can be parlayed or liquidized into cash).</p>
<p>Most grads have no clue how expensive it is to live on their own, and have the creature comforts to which they are accustomed. Young people also don’t have a long track record of keeping financial promises (aka a credit rating), so borrowing money is expensive. And a broken promise (such as a late payment or default), makes getting money more expensive. Things happen, and many people of all ages aren’t prepared for when they do. If something happens, it makes the problem exponentially worse and recovery more difficult. </p>
<p>So, my advice to young people (actually all people, including myself) is to understand philosophy (which isn’t taught enough): Rights come with Duties attached. Assets - Liabilities = Net Worth. If Precautions Taken < the Probability of Loss * Gravity of the Loss, it is Negligent.</p>
<p>Never make a promise that you can’t keep, nor write a check that someone can’t cash.</p>
<p>Feelings matter during negotiations, but not once the ink is dry on a contract.</p>
<p>If a family can afford tuition, there are still other costs. Room and board or rent and food if the student isn’t commuting. Required fees, travel home and back, books/supplies and miscellaneous living/entertainment expenses all add up. Sometimes students have to borrow for those things. Your question isn’t really clear though.</p>
<p>I do not understand your question. You have to borrow to go into debt. Doesn’t matter what you PAY. That has nothing to do with your debt. It’s what you borrow that puts you into debt. “College graduates go into debt after they graduate even if they pay for the tuition” (to quote you directly) because those graduates borrowed money. Simple as that. If you are more specific, perhaps I can answer your question better.</p>
<p>Your question seems odd. What are you asking?</p>
<p>Please clarify.</p>
<p>I also find your question to be unclear, OP. I guessed that you meant to ask why, when students get full tuition scholarships, do they still graduate with student debt. It sounds like maybe annoyingdad guessed the same thing.
One of my sons had a full-tuition scholarship for undergrad to an expensive private school, but he still graduated with almost the national average for student debt. He used his federal loans to pay this expensive private collage’s expensive room and board costs the first two years and for groceries and a relatively “cheap” apartment in an expensive community (where the college was located) the next two years. It adds up! I was proud of him for managing his money so well. He was a “broke” college kid with an enviable opportunity. And yet, he has been paying (with my help) nearly $30K of student debt, all told, to include the interest that accumulated over the four years. If you take out the “standard” unsubsidized federal loan amounts each year and don’t tackle the interest along the way, you will end up with over $30K when it comes time to pay them off. His amazing 4-year education was well, well worth the almost $30 grand, of course. But that’s how a student with a full-tuition scholarship ends up with student debt. </p>
<p>Consider this analogy:
One could get $75k from some bank to “pay” for an Audi A8. Because the car has been paid for, no money is owed to the salesperson, right?
That’s true. However, even though you don’t owe the salesperson any money, you sure as heck owe the bank $75k.</p>
<p>Huh. Well, that (^) doesn’t clarify things for me at all, lol. Are you taking the OP’s position and trying to clarify what s/he was asking? Or are you attempting to answer her/his question? Hahaa. I have no idea what’s going on here.</p>
<p>You may also be misunderstanding - the way that many college students pay tuition is by borrowing money from the federal government or from banks.</p>
<p>@SimpleLife
Trying to dumb things down for OP, but @juillet said it better.
In my example, students pay tuition with borrowed money just like people pay for cars with car loans.</p>
<p>^^^ plus interest</p>
<p>^^ Oh, I get it, Fredjan! Haha. Thanks for explaining! :)</p>