Fired to FIRE

We had Jason on the podcast recently and I thought I’d share the outline of his book:

INTRO

• 45 million borrowers
• 1.7 Trillion in student loan debt in the US (behind only mortgage debt)
• 1/4 of 1.7 Trillion is in deferment, forbearance, or default

Part 1 The Problem

• Largest form of debt, behind mortgages
• over past 45 years gas prices are up 300%, gold is up 1200%, but college is up 1600%!
• 70% of students take out loans to help pay for college
• 40% of students drop out before completing degree
• US has worst college dropout rate of any developed country
• Birth of a crisis
  • 1957 US loses space race
  • Eisenhower embarrassed and turned focus to scientific education
  • Dwight Eisenhower created first federal loan program for science, math, and engineering
  • 1965, Lyndon Johnson expanded it outside of science nerds
  • 2009 US government took over student loan industry
• Other externalities
  • Depression
  • Divorce, 13% of divorces blame student loans
• Standard College Expenses
  • 2017-18 Tuition and fees
    • 34k at private school
    • 10k at public for instate residents
    • 26k at public for out of state residents
  • Housing and meals ~11-12k
  • Books and school supplies ~1.2k
  • Personal and transportation 2.7-3.2k
  • Tuition tends to increase about 8% per year

Part 2 The Stories

This part went through various different paths to either get through college completely debt free or very close to debt free. Most of the stories involved living at home, getting scholarships, and working jobs.

Part 3 The Solutions

• Work to make money
• Employer tuition reimbursement (Starbucks, Best Buy, Home Depot, etc.)
• 100M in unclaimed scholarships each year because students don’t know they exist or think they’re too hard to get (can find locally, scholarships.com, fastweb, chegg, etc.)
• Dual enrollment
• Take AP classes
• Internships
• Ditch car, ~9k per year
• Use used textbooks
• Maximize campus amenities
• Student discounts
• Learn to cook
• Attend community college first (~1/3 of cost of in state public 4 year school)
• MOOCs – massive open online courses

I enjoyed discussing some of these ideas with Jason and will take away many points. One is that the government is making money of many going into debt for school. Don’t be a blind sucker that just takes the money! Do your own cost benefit analysis and if you decide to go to school apply to all the scholarships you can, because there are a lot of dollars that go unclaimed.