Student Loans

The woman Yahoo! uses for an example in their article on student loans is an exceptionally bad example. You almost have to TRY to get $550,000 in debt. However, student loans can put you into a hole that'll take you a while to dig out of.

While in grad school, I took out several $7,500 loans. I remember when I got those, it sort of felt like a ripoff, because I only got about $6,000 from each--the other $1500 disappeared in various fees. Compute those into the APR and the rate would look like usury.

Also, as the article notes, the miracle of compound interest that can build your retirement account into millions works its same magic on student loans. Deferment is really not a good idea, if you ever want to get it all paid off.

I'm sure it's much tougher for folks these days, where $7500 would barely cover a year's fees at a Cal State school. Also, I never paid more than about $250/month for rent in grad school. :D