Dec 15, 2023
The student loan tide continues to rise, drowning more young people every year. Twenty-year-old Dylan of Indiana, who is struggling in the deep-end of this crisis, called into The Ramsey Show to seek advice.
Co-host John Delony had a simple escape plan: “You’ve got to work at McDonald’s all day and then deliver pizzas at night.”
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Here’s how slinging fast food could turn Dylan’s situation around.
The rising costs of student debt
Dylan revealed he has more than $70,000 in total debt. Of that, $36,000 is from a car loan and another $3,700 is from a personal loan he took to pay rent while between jobs. However, the most shocking piece of Dylan’s debt pile is a student loan of $32,000 that he acquired after just one semester in college.
“Wait, one semester? On Mars?” Delony asked incredulously.
To be clear, Dylan’s debt burden isn’t extraordinary. The average student loan debt is $37,718, according to the Education Data Initiative. However, that’s usually debt students have racked up after completing their program and graduating.
Dylan said he attended a private Christian school in Minneapolis. Tuition for some of these institutions can be tens of thousands of dollars per year, so it’s possible for a young person to rapidly accumulate his level of debt.
Dylan’s situation highlights how millions of Americans have accumulated a total of $1.74 trillion in student loan debt over time.
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Taking a 'scorched earth' approach to debt reduction
Co-host Rachel Cruze recommended a “scorched earth” debt reduction strategy for Dylan, which means quitting his job because it doesn’t pay enough — and then working multiple jobs and long hours to reduce his debt.
Dylan said he earns roughly $36,000 in a combination of base salary and commissions as a car salesman. That’s not enough to manage his debt burden.
“Your car salesman days are over,” Delony said. “You’re not good at that.”
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Instead, Delony recommended that Dylan work at McDonald’s, deliver pizzas and work as an Uber driver. Cruze, meanwhile, said he should sell his car, move back in with his parents and work relentlessly to pay down the remaining debt.
“I would be working 80 hours a week,” she said.
According to Indeed), non-manager roles at McDonald’s locations in Indiana tend to fall between $9 and $12 an hour. Pizza delivery drivers in the state earn an average of $15 an hour, per Ziprecruiter. If Dylan were to make $12 an hour working 80 hours a week, he could potentially earn just shy of $50,000 (before taxes). Saving a significant chunk of that could help him pay off his debt in a few years.
Working long hours or multiple jobs isn’t unusual. In fact, nearly 8.4 million Americans held multiple jobs as of November 2023, according to the Federal Reserve Bank of St. Louis.
“You’re not going to have a life,” Cruze warned. But the grueling effort should be worth it to get out of debt while Dylan is still young.
“If you get this all straightened up, especially at your age, you could build some serious wealth in the future.”
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
