Emotionally Treating Your Student Loans Like A Mortgage

Recently, one of my employees highlighted that soon, many people will have to pay $500,000 or more for a graduate degree¹, and the average student loan debt is currently almost $40,000 for undergrad ($80,000 for grad school) with the total student loan debt being $1.76 trillion, increasing over 70% since 2006². I’ve already had several clients come to me with $300,000 student loan debt balances. These balances didn’t necessarily come from medical doctors (and many others), who expect that their income will generate enough money to pay the loan off. Even those clients don’t like having $300,000 of loan debt and typically want to throw their hands up in dismay. The silver lining of hope is a mind shift from the burden of student loan debt into seeing it more like a mortgage on a house.

Mentality of Mortgages vs Student Loans

Many people want to be a homeowner. To acquire a home, most often they take out a mortgage. Traditionally, there was a 20% down payment expected, while today there are programs that are allowing people a path to ownership with less money down. However, the mortgage holder does not own the home; although they frequently say they are the “homeowner”. They are already involved in an optimistic bias that says they will successfully pay off the house and it will increase in value.