What You Should Tell Your Kids About Student Loans Before They Go to College

College is full of excitement and opportunity—but for many students, it also comes with a long-term financial burden: student loans.

If you’re a high school senior—or the parent of one—it’s important to understand what borrowing for college really means, and how those decisions can shape your financial future long after graduation.

Let’s walk through a realistic example to see what student loans actually cost and how they can affect your monthly budget.

The Example: Borrowing $25,000 Per Year at a Private School

Imagine a student chooses a private college and needs to borrow $25,000 each year to cover tuition, housing, books, and other expenses. After four years, they will have borrowed $100,000.

But with interest accruing during college at 8 percent, the total loan balance by graduation would actually be closer to $121,665.

The Standard 10-Year Repayment Plan

Most federal student loans are set up on a 10-year repayment schedule. Based on the example above, the monthly payment would be about $1,476.

That’s $1,476 every month, for 10 years.

How That Fits Into a Real-World Budget

Now let’s compare that payment to what a college graduate might earn in their first job. Here are two common examples:

• Teacher: Starting salary around $45,000 per year (or $3,750 per month before taxes)
  
• Accountant: Starting salary around $65,000 per year (or $5,417 per month before taxes)
  

Subtract the loan payment from the monthly salary:

• A teacher with $3,750 in income has $2,274 left after paying their loan.
  
• An accountant with $5,417 in income has $3,941 left.
  

And this is before you account for taxes, rent, food, transportation, or anything else. That loan payment is a huge portion of your budget.

Other Repayment Options to Consider

If the standard 10-year plan is unaffordable, there are other ways to repay student loans:

• Extended Repayment (25 years): This lowers the monthly payment by stretching it over a longer period, but you pay more interest in the long run.
  
• Income-Driven Repayment (IDR): These plans set your payment based on your income and family size. In some cases, payments can be as low as $0. After 20 to 25 years of payments, any remaining balance may be forgiven. However, you may still pay more over time—and forgiveness could be taxable depending on the rules in place.
  

These plans can offer flexibility, but they don't erase the debt. They simply spread it out and lower your monthly pressure—at a long-term cost.

What You Really Need to Know

Student loans aren’t evil. They can open doors. But too many students borrow without really understanding how repayment will affect their future lifestyle.

Here’s what we want you to understand:

• More debt = less freedom. Big loan payments will limit your choices — where you live, what job you can take, and even whether you can start a family or buy a house.
  
• Some degrees don’t pay for themselves. If you’re going into a lower-paying field like teaching or social work, think long and hard before borrowing six figures.
  
• The system is broken. Because the government backs most student loans (meaning colleges get paid no matter what), schools have raised prices way beyond what most degrees are worth in the job market. You’re not crazy to question whether it’s all worth it — that’s smart.
  
• There are alternatives. Community college. State schools. Scholarships. Living at home. Working part-time. All of these reduce the need to borrow — and that gives you more freedom down the line.
  

A Smarter Way to Choose a School

If you’re worried about student loan debt (and you should be), one of the smartest moves you can make is finding a quality school that won’t force you to borrow so much in the first place.

The Western Undergraduate Exchange (WUE) is a great place to start.

WUE is a program that offers reduced tuition rates at over 160 public colleges and universities in the western United States. If you live in a WUE-eligible state, you can attend a participating school in another WUE state and pay about 150 percent of that school’s in-state tuition. That’s still significantly less than full out-of-state or private tuition.

To help you compare your options, check out this free spreadsheet:

WUE College List – Tuition, Sports Programs, and More

This includes:

• In-state and WUE tuition costs
  
• Whether the school has a baseball or football program
  

Smart planning on the front end can save you tens of thousands of dollars—and give you more freedom after college.

Final Thoughts

Student loans can open doors, but they can also close them if you’re not careful.

Before you borrow, ask yourself:

• Can my future salary handle this payment?
  
• Are there schools that give me what I need for less money?
  
• Do I understand my repayment options and how they’ll affect my life?
  

You don’t need to have all the answers right now—but you do need to ask the right questions.

Because what you borrow today shapes the freedom you’ll have tomorrow.