What does Dave Ramsey say about student loans?

Dave Ramsey's central message is that all student loans are a bad idea and should be avoided entirely. He views them as a form of "bondage" that steals your future freedom and considers them "horrible" and "evil" debt. He strongly advocates for paying for college with cash through careful planning and effort.

How much is the monthly payment on a $70,000 student loan?

A $70,000 student loan's monthly payment varies widely, from roughly $750 to over $6,000, depending on interest rates (APR) and repayment term, with a 10-year loan at 5% being around $742/month, while a 1-year term at 14% jumps to $6,285/month; federal loans offer income-driven plans (IDR) for lower payments, but private loans depend heavily on credit score and term length.
 

What is the 28% rule Dave Ramsey?

While there is a popular 28% rule that suggests spending no more than 28% of your monthly income on a mortgage, Ramsey is known to suggest limiting your housing costs to 25% of your monthly income.

How long would it take to pay off $100,000 in a student loan?

Paying off $100k in student loans typically takes 10 to 25 years, depending on your interest rate and monthly payment, with standard plans aiming for 10 years but many borrowers extending to 20+ years; aggressive payments can cut the timeline significantly, while lower income-driven plans can last even longer, often leading to 20-25 year forgiveness options. For example, at 6% interest, a 10-year plan costs about $1,110/month, while longer plans lower payments but increase total interest paid. 

What is the 7 year rule for student loans?

Only after you pay your federal student loans can the default be removed, but it will still take seven years from the time of repayment for those accounts to be removed. Keep in mind: Federal law limits how long most types of negative information can remain on your credit report.

How Do I Tackle My Student Loans?

What happens if I never pay my student loan back?

If you default on your student loan, that status will be reported to national credit reporting agencies. This reporting may damage your credit rating and future borrowing ability. Also, the government can collect on your loans by taking funds from your wages, tax refunds, and other government payments.

Are student loans written off after 10 years?

Earn less and you don't pay anything back. You repay 9% of everything earned above that amount, so earn more and you repay more each month. The loan is wiped after 40 years whether you've paid a penny or not. This means many people will be repaying their student loans for most of their working lives.

What is the smartest way to pay off student loans?

The smartest way to pay off student loans involves a mix of budgeting, extra payments (especially on high-interest loans via the debt avalanche method), using autopay for rate discounts, exploring refinancing, and utilizing income-driven plans for federal loans, all while balancing retirement savings and employer benefits to save money and time. 

What is the 50 30 20 rule for student loans?

50% of your budget goes to necessities: rent, utilities, transportation, insurance, groceries, etc. 30% goes to wants: dining out, shopping, gym membership, entertainment, etc. 20% goes towards savings and debt repayment: student loans, auto loans, credit cards, emergency savings, etc.

How many Americans have $20,000 in credit card debt?

A majority of Americans (53%) carry some, with an average balance of $7,719. However, a third of those carrying debt (32%) owe $10,000 or more, while almost 1 in 10 (9%) have credit card debt over $20,000.

What does Dave Ramsey say about the 4% rule?

Dave Ramsey's "4 rule" often refers to his advice to budget for the Four Walls: food, shelter, utilities, and transportation, prioritizing these essential needs. However, in retirement discussions, his contrasting view on the 4% Rule (a standard guideline for safe withdrawals) versus his own 8% Rule (which he claims is safe with aggressive growth) is a major point of contention, with many financial experts criticizing his higher rate as too risky and unsustainable compared to the traditional, more conservative 4% guideline for long-term retirement security. 

How much does Dave Ramsey recommend for retirement?

Dave Ramsey recommends saving 15% of your gross income for retirement, invested in good growth stock mutual funds through tax-advantaged accounts like 401(k)s and Roth IRAs, to become a millionaire and secure your future, emphasizing consistency and time to build wealth. This percentage, combined with compound interest, is designed to get you to a substantial nest egg, potentially over $1 million, depending on your income and time horizon, by age 65. 

What salary to afford a $400,000 house?

To comfortably afford a 400k mortgage, you'll likely need an annual income between $100,000 to $125,000, depending on your specific financial situation and the terms of your mortgage.

What are the alternatives to student loans?

By exploring scholarships, grants, work-study programs, tuition payment plans, and even community colleges, you can create a strategy that works for your financial situation while avoiding unnecessary loans. These options provide an empowering path to manage college costs without compromising your financial future.

What is a good monthly student loan payment?

There's no set rule for how much of your budget should go toward student loans, but a monthly payment that exceeds 10% of your income could be burdensome. You may be able to reduce payments by applying for an income-driven repayment plan or refinancing your student loans for new terms.

How many people have $100,000 in student loans?

Around 3.6 million U.S. student loan borrowers owe more than $100,000 in federal student debt, a figure that has grown significantly, representing about 7% of all borrowers, with many of these larger debts concentrated among graduate and professional degree holders, according to late 2025 data from the BestColleges and CNBC. 

What is the $27.40 rule?

The $27.40 Rule is a personal finance strategy to save $10,000 in one year by consistently setting aside $27.40 every single day ($27.40 x 365 days = $10,001). It's a simple way to reach a large financial goal by breaking it down into small, manageable daily habits, making saving feel less intimidating and more achievable by cutting small, unnecessary expenses like daily coffees or lunches.
 

Do parents who make $120000 still qualify for FAFSA?

There is no income cap for FAFSA. Even high-income students should apply to access federal loans and some merit aid. Aid eligibility is based on your Student Aid Index (SAI) and cost of attendance, not just income alone. For the 2025-26 FAFSA, dependent students can earn up to $11,510 before it affects aid eligibility.

How many Americans have $10,000 in savings?

Here's the data: - A 2023 YouGov survey (updated in 2024 analyses) found that about 57% of Americans have less than $10,000 in savings: 27% have under $1,000, 18% have $1,000–$9,999, 12% have $0, and 17% didn't disclose (often a proxy for low/no savings).

What should I do if I can't afford to pay my student loans?

Having trouble making your monthly payments?

1. Log in to your account. ...
2. Reach out to your cosigner. ...
3. Make a small payment. ...
4. Ask about a bi-monthly payment method. ...
5. Explore income-driven repayment plans. ...
6. Consider deferment or forbearance. ...
7. Look into loan forgiveness programs. ...
8. Explore refinancing and consolidation options.

Why shouldn't you rush to pay off student loans?

Rushing to pay off student loans can leave other important financial priorities neglected. Without an emergency fund, a sudden job loss or unexpected expense could force you into high-interest debt, like credit cards or personal loans.

What is the 7 year rule on student loans?

The "7-year rule" for student loans mostly refers to when negative marks, like defaults, fall off your credit report, typically 7 years after the first missed payment, but it's not a discharge from owing the debt; the debt itself often remains, especially for federal loans which have no statute of limitations and can be pursued indefinitely. In bankruptcy, the rule means federal student loans are generally dischargeable only if it's been over seven years since you stopped being a student, though private loans have different rules and federal loans are extremely difficult to discharge. 

What happens if you never pay off a student loan?

If you don't pay student loans, your loan goes into delinquency (after 90 days) and then default (around 270 days for federal loans), severely damaging your credit, leading to collection efforts like wage garnishment or tax refund seizure (federal), and potentially losing access to transcripts, but options like income-driven plans, forbearance, deferment, or Fresh Start can help before default. Ignoring the debt makes it worse with added fees and penalties, so contacting your servicer is crucial. 

How much is the monthly payment on a 50000 student loan?

A $50,000 student loan monthly payment varies significantly, typically from around $100 to over $500, depending on the interest rate and repayment term; for example, at 6% over 10 years, it's about $555, while stretching to 20 years at 7% might lower it to roughly $387, with income-driven plans potentially making payments even lower based on your earnings.
 

Is it worth paying off a student loan?

There are some situations where paying off your student loan can save you money, but this is only usually the case for very high earners. Even then, these people could still benefit from saving this money for a rainy day.