Getting Through College Debt-Free

Bob: If you listened to yesterday’s FamilyLife Today—what Ron Blue said—well, he’s going to say it again.

Ron: My message is that there are four biblical principles: spend less than you earn, avoid the use of debt, save for the long-term and the unexpected, and set long-term goals. That was testimony that I gave to a congressional sub-committee, back in the early ‘90s. Senator Dodd was the one that asked me the question, and I gave him that answer. He said to me, “It seems like that would work at any income level”; and I said, “You’re right, Senator, including the United States Government.”

Bob: This is FamilyLife Today for Friday, January 6^th. Our host is the President of FamilyLife^® Dennis Rainey. I’m Bob Lepine. I know Ron Blue can sound like a broken record sometimes; but that's because the financial principles he talks about—well, they’re from Scripture—and they work! We’ll hear more about that today. Stay with us.

1:00

And welcome to FamilyLife Today. Thanks for joining us. When you graduated from college—now, I know this takes you back a long, long way. [Laughter]

Dennis: That’s right it does! [Laughter]

Bob: Did you owe anything to the loan company, to the college, to anybody? Did you graduate with any college debt?

Dennis: You know, my first—

Bob: Did they even charge for college way back then? [Laughter] I’m sorry! [Laughter]

Dennis: That’s okay.

Bob: I’m sorry!

Dennis: It was okay. [Laughter] You know, my first two years, Bob—so here’s my response; okay? My first two years were paid for by marginal athletic ability—[Laughter]—

2:00

—I didn’t earn a 100 percent scholarship—but I played baseball and basketball in junior college. By the time I got to my second semester of my sophomore year in junior college, I was on a full ride.

Bob: Is that right?

Dennis: That’s right!

Bob: Because your mom and dad didn’t hand you a big wad of money—

Dennis: No!

Bob: —and say, “Here’s your college money.”

Dennis: No; in fact, I had to get a job to supply the entertainment money—the ability to go on dates, etc.

Bob: You were on your own?

Dennis: I was on my own! For my last two years in college, when I went to the University of Arkansas, they [parents] did help a little bit, at that point, with the tuition.

Bob: Your mom and dad did?

Dennis: Yes, that’s right; and I also supplemented with some earned cash due to a job.

Bob: Right!

Dennis: And that’s how I made it through without borrowing any money. What about you?

Bob: I got through without owing any money, thanks to Mom and Dad.

Dennis: Yeah!

Bob: I mean, it was basically their kindness that made it possible for me to go to college.

Dennis: And so, what have you done with your kids?

Bob: We have set aside some money for education for our kids—for a higher education. We have said: “This is how much you’ve got—this amount.

3:00

Dennis: Right.

Bob: “You can decide how you want to allocate that amount.”

Dennis: So if they want to go to a more expensive school, they can choose to do that; and then, they could choose to go into debt to do it.

Bob: We’ve never had to have that conversation; because we have just said to them, “We think that would be an unwise choice to make—we would rather see you get an education you can afford than to go into debt.”

Although, I know some parents—I’m thinking of folks,—

Dennis: Yes; that’s right!

Bob:—who’ve got a really bright young son or daughter, who could get accepted into one of the big ones / one of the colleges, where you think: “Boy! It might cost $150,000 over four years, but they will be set when they get a degree with that. Maybe we should go into debt rather than them going free to the state college, because their grades could get them in for free.” They are facing that dilemma and trying to figure out what’s the better choice.

Dennis: Yes; and I want to find out what our guest on today’s broadcast did. He had five children. He and his wife Judy live in Atlanta. Ron Blue joins us again on FamilyLife Today. Ron, welcome back!

4:00

Ron: Delighted to be here.

Dennis: How did you handle this issue with your five children?

Ron: Well, none of our children had to borrow. We had provided for their education like Bob had; but I’ve developed some strong convictions on it, because I’ve counseled thousands of people in this area. I think that a college education is almost like a wedding—“I have a right to this,”—and—“I have a right to this college education.”

I personally believe, that where you get your education only has significance in your first job. If I wanted to go to work on Wall Street; then maybe, I needed to go to an Eastern school. What you did Dennis—going to a junior college on an athletic scholarship—

Dennis: Yes.

Ron: —I think junior colleges/ community colleges—you don’t need to pay for that education, because what really makes a difference is how much you put into the education and then what you put into your jobs. I would almost never counsel somebody to borrow to go to college.

5:00

Just the illustration that you used, Bob, on the $150,000—it’s really hard to make the numbers work on that—that you can improve yourself so much, economically, that you can really justify having spent that kind of money.

Bob: Yes.

Ron: I can’t imagine that! One of my sons teaches at a private Christian school. Tuition there for kindergarten is $18,000!

Bob: Wow!

Ron: I can’t imagine! That’s $18,000 after tax.

Dennis: Now Ron, you know, right now, there are listeners bristling—

Ron: Yes.

Dennis:—at what you are saying; because education to them is a high value.

Ron: Yes!

Dennis: And they want their son or daughter—or both perhaps—to have the very finest education possible.

Ron: Right.

Dennis: So, they want their children to go to, you know, the prestigious Ivy League school or maybe the West Coast school.

Bob: Prep school—

Dennis: Yes!

Bob: —or the kindergarten, where your son teaches.

Ron: Right; right.

Dennis: So, how should they look at that?

Ron: You’ve got to ask yourself, “What am I really buying here?” and “If I’m going to buy that, can I afford it; or do I need to give up something someplace else?” I don’t have an argument with somebody that wants to spend that kind of money as long as they don’t go into debt to do that. That’s in their value system—it’s a priority with them. I wouldn’t argue with them on it, but I would sure ask them to ask themselves the question of whether there is really value there. I know I would get strong opinions back on it.

Dennis: So husbands and wives really need to hammer on this issue—

Ron: Absolutely

Dennis:—as a couple, and make sure they are one. I happen to know how much it costs to become a doctor—[Laughter] 

Bob: That’s exactly what I was thinking!

Dennis:—because I have a son-in-law, who is an obstetrician.

Bob: Is it even possible for somebody today to become a doctor without going into debt?

Ron: Well, you know, when they get to medical school and whatever specialty that they’ve chosen, they might be able to justify the numbers there; because what they are really doing is deferring the cost of that to when they have the income for it. They know, with pretty much certainty, what they are going to make.

7:00

But I wouldn’t consider college education as a right—it should be a privilege. It’s kind of like owning a home—it’s a privilege. So much of—in our society today, we’ve got things defined as a right. Just talking about weddings—I told my kids: “Your mom and I spent 300 bucks to get married. She bought a used wedding gown, and we had a reception in the church, and we sent out announcements. So,”—I said—“You can spend, at least, that much on your wedding!” [Laughter]

Dennis: I’m sure that went over really big!

Bob: You sound like one of those guys who said, “When I was a boy,—[Laughter]

Ron: That’s right; I know!

Bob: —“we did things this way.” [Laughter] People think about weddings—not even weddings— honeymoons.

Ron: Right.

Bob: I mean, here’s a couple that’s saying: “We’ve got one shot on our honeymoon. Shouldn’t we go ahead and borrow some money so we can have a nice Hawaii—eight days/seven nights on the islands—to start our marriage? Isn’t that a good thing to do?”

8:00

Ron: “Do you have the cash to pay for it?” [Laughter]

Bob: “Well, no! We’re going to borrow for it. We’ll pay it back though!”

Ron: Well, I had a great honeymoon—went to a hotel in Cincinnati. We drove from Indianapolis to Cincinnati. We had a weekend honeymoon. I remember it as a pretty special time! [Laughter]

Dennis: But, you know, your reality really gets skewed because of how things have escalated. I mean, we’ve raced ahead from college, to the wedding, to the honeymoon. You go all the way back—into how kids are celebrating prom—

Ron: Yes; sure!

Dennis: —stretch limos—

Ron: Yes.

Dennis:—spending $500 to $1,000 on a prom for a kid is really nothing, in some of the areas of the country. Where’s the plumb line here?

Ron: Right.

Dennis: Where’s the parental guidance?—because they may be creating an appetite for these matters, later on in their kids, that they want to be careful about creating.

9:00

Bob: But, you know, there are a lot of parents, who are listening to us, who are saying, “I’d never spend $1000 for my kids to go to prom; but to borrow money for my kids to go to college,” —that does seem like a different value decision—or “to borrow money so that the wedding can be all that my kids had hoped it would be.” Now, there may be more of a close parallel between your prom example and how lavish the wedding is.

Ron: You know, that’s a really good point, Bob. I think a lot of parents—it is kind of like use sports—you live out your life through your children—through the sports, and through the college they go to, and what the wedding looks like. I see that happening a lot!

Bob: Let’s say your son comes home from college, and you’ve done just exactly what you’ve done—you’ve said, “Here’s how much you’ve got.” He goes—he’s going to graduate, debt-free—but guess what? He’s in love, and the young woman he’s in love with—she’s not going to graduate, debt-free. She’s going to graduate with some student loans—

Ron: Right.

Bob:—and with some credit card debt; but they’re in love!

Ron: They’re in love. I understand that, and I’ve been in love also—for 44 years! [Laughter]

10:00

I think a point that Dennis asked earlier—that we’ve never really come back: “Where does a young couple start?” I think, before the wedding, they start with having a conversation—a transparent conversation on: “Do you have any debt? What are your spending habits?”—knowing something about each other—that’s not for judgment, but it’s for a communication issue—because you will have conflict over money if you haven’t talked about it ahead of time.

Dennis: It may be that, as a result of the conversation—now, this almost sounds like heresy, here on FamilyLife Today—but it may be, as a result of the conversation, that you delay the wedding—

Ron: Absolutely!

Dennis: —so that you can pay off debt!

Ron: Yes.

Dennis: Now, you talk about something that is counter-cultural today to this generation that is coming up in this materialistic-age to delay gratification—

Ron: Right.

Dennis:—by paying off debt.

Ron: That’s un-American!

Dennis: It really seems that way; you know? It really does!

11:00

Bob: So, if you were in that situation, where a daughter of yours is now in love with—I mean, you don’t find this out on the first date, how much this person is in debt; right?

Dennis: Well, I think—I think—

Bob: —you think you ought to find out on the first date? [Laughter]

Dennis: No; no! [Laughter] That wasn’t where I was going with my answer! I was going back to what Ron said about having the honest conversation at some point. There’s where Dad does need to step in and help his daughter or his son, at that point, count the cost of what it means to build a marriage.

I mean, it really isn’t out of the question that a father and a mother could come alongside a young couple, like this, and say to them: “You know, you really would be much, much better off if you took the next six/twelve/eighteen months to just work hard and pay off the debt to prove that you are going to start your marriage out on the right foot; because what happens if you get pregnant?”

Ron: Right.

12:00

Dennis: And at that point: “And it takes two incomes to pay back the debt—you’ve already made your decision about childcare, and daycare, and who’s going to take care of the kids.”

Ron: Yes!

Bob: If your son says to you: “But Dad, it’s better to marry than to burn—I read that in the Bible. If I’m taking on another 12 to 18 months…” [Laughter]

Dennis: I’d say, “Burn son!” [Laughter] I’m kind of like Ron—I know what it was like to burn! [Laughter] I know what it’s like to be in love! But I’ve also seen a lot of marriages and families come crumbling down around this issue that Ron’s talking about here—just how debt crushes and cripples young couples, starting out.

Ron: You know, for the conversation to be had—that you mentioned—the dad sitting down with the son or daughter—there’s a lot that has to have gone on in building a relationship with that son or daughter throughout the growing-up years.

Dennis: Yes; yes!

Ron: It has to be a trust relationship there, because that conversation’s not going to work if it’s a brand-new type of conversation. We know that more is caught than taught in raising children.

13:00

Parents need to think through their value system / their decisions—and they do need to teach their children about money—but about a lot of other things.

I had one of my daughters, who is in her 30’s now—she said, “Dad, I just went back on the envelope system —

Dennis: Oh, yes?

Ron:—“because I was having trouble controlling my grocery expenses and things like that.” She put herself on the envelope system.

Bob: The envelope system is where you take the money, at the beginning of the month, and you put it in actual envelopes.

Ron: Groceries, and gas, and whatever.

Bob: Wow! So, she’s imposing a discipline on herself to help her stay within the bounds; right?

Ron: Right.

Dennis: To not run past something you mentioned, just a few moments ago, the model of the parents is really powerful.

Ron: Absolutely.

Dennis: I don’t recall a lot of conversations with my dad and mom about money. Certainly, there were never any formal teaching opportunities around the envelope system.

Ron: Yes.

14:00

Dennis: My dad was one of these no-nonsense guys, who didn’t borrow money to expand his business—he was very frugal—he built it, one year at a time / one dollar at a time. He ended up being modestly-successful in a small town. When I got married, I just remember going to the bank—not the literal bank—but the bank in my soul of all the deposits he had made in my life by modeling to me being a man of integrity, not being a man that was just out, spending money.

Now, he made some mistakes—that I also noted—he bought a car one time and brought it home. My mom was not a part of the decision. I do remember—[Laughter]—you know, your book is called Surviving Financial Meltdown—[Laughter]—I remember our home that night—there was another meltdown—[Laughter]—except it was chilly / it was real chilly in our house! My mom was not a happy camper about Dad buying a car without consulting her. I learned from his mistake, at that point.

15:00

Ron: Right.

Dennis: I think, as parents, we need to realize our values are being caught by our kids, whether we intend them to be caught on the plus side or the minus side, they’re there for our kids to see.

Ron: Absolutely; and that’s where they are going to learn the most.

I was, again, on a radio program. A young man called in and he said, “God’s called me to the mission field,”—and he said—“but I can’t afford to go to seminary without taking on debt. What would you counsel me?” I prayed—said, “Lord, give me wisdom here!” I said, “Well, I’ll tell you what—if you go to seminary and you borrow money, let me ask you the question: ‘You go into the mission field. How are you going to pay that debt off?’”

He said, “Well, I may have to delay going to the mission field.” I said, “Didn’t God call you to the mission field?” He said, “Yes; He did!” I said, “Well then, can you not trust Him to provide the resources for you to go to college?”

16:00

I said: “I’m going to tell you something really radical; and that is, if you’ve got the money to go to college for a week, go for a week. If it’s for two weeks, go for two weeks. But don’t ever go into debt to go to fulfill a calling that God has given you. Don’t deny God an opportunity to work.”

I got a letter from him several years later. He said, “Let me tell you what happened.”

Dennis: Yes.

Ron: You know—dorm counselor, part-time jobs, gifts—he graduated, debt-free, and was able to go to the mission field right away. He saw God’s hand—he went to the mission field a lot better prepared.

Bob: You know, my kids, who are out of college, have come back. They never really had the expectation that there’d be any borrowing—we’d kind of taken that off the table, all along. They’ve come back, since they are out of college; and as they look around at the landscape, they are the exception, not the rule.

Ron: Absolutely!

Dennis: Yes, yes, yes!

Bob: They have said, “We are glad, right now, that we’re the exception.

17:00

“Looking back on it, we are glad that we didn’t indulge for four years and try to pay it off in the early years of a marriage and a career.

Ron: Oh, yes!

Bob: “Thank you for not opening that door or having us even consider that.”

Ron: Yes; I got a call from one of my daughters. She was a single mom for six years. She said, “Dad,”—she said—“I think I’m in financial trouble.” I never pro-actively talked about money with the kids after they got married much. I said, “Well, tell me about your situation.”

She said: “Well, I’m prepaying $400 a month on my mortgage so that it will be paid off when Jack, my son, goes to college—I’ll have the mortgage paid off. I’m putting some money into a 529 plan for him to go to college.” She said, “I’m maxing out on my 403b.” She also had a Roth IRA that she was putting money into. [Laughter] She said, “I don’t have any credit card debt,” and she said, “My car is paid for.”

I’m saying, “Now tell me the problem?!” She said, “Well, I know that I need about $20,000 in savings so that I can buy a new car when I need it; but I can’t seem to get past $12,000. I know I must be doing something wrong!” [Laughter]

Dennis: Amazing!

Ron: She was, at that time, a 33-year-old single mom; and she did not have a huge income.

Bob: Wow.

Ron: There was no windfall in that. She followed those principles, Bob, and it worked. She was in phenomenal position. She was one of really literally hundreds out of the millions that are out there.

Bob: Those principles you are talking about are the principles that are in your book—minimize the use of debt, maintain emergency savings, think long-term, spend less than you earn. That stays the same no matter what the economic environment is.

Ron: It’ll never change.

19:00

Dennis: Just to kind of summarize here—I can imagine someone, who is listening to us, saying, “Have you guys—have you guys determined, here, that it is morally wrong to borrow to go to college?” I have an opinion on this, but I want to hear yours; because I can hear someone thinking—out of this conversation—we’re saying it’s wrong to borrow to go to college.

Ron: No; I’m not saying that. I think it is a matter of personal conviction. Romans 11 says, “Let each one be fully convinced in his own mind, but whatever is not of faith is sin.” I think everybody’s got to reach that conviction; they just need to think it through rationally.

The Bible does not say that it’s wrong to borrow money—it says it’s foolish—but it doesn’t say it’s wrong to. All it says is that the wicked man borrows and does not repay. So, if I borrow money, I’ve got to repay; and I’ve got to think through the repayment if I’m going to borrow money—that’s all I’m saying. It’s not morally wrong to borrow to go to college, but you need to think about it.

20:00

Dennis: I would agree with that statement, and I would add this: “I think the reason we’ve had this conversation today is—we look at young couples, who are starting out their marriages, and they are strapped with college debt, consumer debt—

Bob: —car loans.

Dennis: Yes—“they’ve allowed debt to be the way they get things.”

Ron: Absolutely!

Dennis: What I hear us saying here—is attempting to really come alongside young married couples and coach them and say: “Look! You’re building your home, your marriage, your family in the midst of a fierce storm. There is no reason to have any erosion in the foundation as you start this thing off. If you can start it off with solid footing, without a boat load of debt, then you are going to be able to withstand the storm.”

Ron: Absolutely!

Dennis: Our coaching here is just to keep people out of the ditch and to avoid an additional strain on the marriage relationship.

21:00

Bob: Yes; no matter what is going on in the national economy, the real important question is: “What’s going on in your economy?—the economy in your house? Do you have a handle on your financial situation? Are you employing sound, biblical principles when it comes to managing your finances?—to managing your money?”

I know, Ron, you have a colleague, Russ Crosson, who has written a book that you have endorsed that is all about those financial principles—it’s called, 8 Important Money Decisions for Every Couple. I’m just thinking of the couples, who are listening today, who have said to themselves: “This is the year we are going to try to turn things around financially for us. We’ve gotten in the hole / we’ve gotten in a ditch. We need some help.” These are principles that will help you get on the right track and help you stay on the right track.

Ron: Right.

Bob: We have copies of Russ Crosson’s book, 8 Important Money Decisions for Every Couple. It’s available in our FamilyLife Today Resource Center.

22:00

Go, online, at FamilyLifeToday.com; and you can order a copy of the book from us. Or call 1-800-FL-TODAY, and we’ll send the book to you. Again, the website is FamilyLifeToday.com; the toll-free number is 1-800-FL-TODAY, and the title of the book is 8 Important Money Decisions for Every Couple.

Let me just say—if you know a couple who is about to be married or a couple who recently got married; in fact, I’m thinking of one of those couples, right now—you may want to do what I’m going to do—get a copy of this book and forward it to them, just so they can get on the right track if they’re not there already, and stay on the right track if they are by employing these biblical principles.

Now, here in the first week of the new year, we are still finishing up processing some of the mail that was sent to us during the last few days of 2016.

23:00

So we don’t have the final number yet on the matching-gift challenge and how we ended the year, financially, here at FamilyLife; but we do want to say, “Thank you,” to those of you who, over the last month, made a contribution in support of this ministry. What you were saying with that contribution is that you believe, as we do, that marriage and family matters. If we can reach more couples and help more couples strengthen their marriage and strengthen their family, it’s going to make a difference in our world.

Thank you for partnering with us in this ministry. Thanks to those of you who are

Legacy Partners—those of you who support this ministry each month with a contribution—your financial support provides the foundation for this ministry to exist. We are grateful for your partnership with us.

Have you ever thought about becoming a Legacy Partner? It’s easy to do—go to FamilyLife Today.com—and the information is available there; or call us and say, “I want to become a Legacy Partner,” and we can take care of that quickly.

And we are grateful for all of our Legacy Partners and for those of you who made yearend contributions during the month of December—thanks for partnering with us.

24:00

We hope you have a great weekend. Hope you and your family are able to worship together in church this weekend. And I hope you can join us back on Monday, when we are going to talk about one word that makes a huge difference in every marriage relationship—one word. Do you know what it is? Tim and Darcy Kimmel are going to join us on Monday, and we’ll find out what that word is then.

I want to thank our engineer today, Keith Lynch, along with our entire broadcast production team. On behalf of our host Dennis Rainey, I’m Bob Lepine. We will see you back Monday for another edition of FamilyLife Today.

FamilyLife Today is a production of FamilyLife of Little Rock, Arkansas.

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