Graduation season is upon us. Many of us have children, grandchildren, or acquaintances sailing out of school … and hitting pretty rough seas in the job market.

I had planned to speak to my sons about investing once they graduate. But while investing is undeniably important, I think a better discussion would be around debt management.

Students these days are graduating from college with significant debt: According to the U.S. Department of Education, the total outstanding federal student loan debt exceeds $500 billion. Worse still, many graduates have little or no experience in managing a budget, and many have had (and may continue to have) parents who bailed them out of debt crises—postponing the inevitable experience of managing their own debt. This is a serious problem.

A recent study by Sallie Mae talks about students living beyond their means, and on average running up credit card bills in excess of $3,170. That doesn’t include average college-loan indebtedness of $21,000 at graduation, and an increasing default rate for those loans just short of 7%.

Not all graduates are in the same circumstance. Plenty have worked their way through, carried loans, competed and won scholarships, and know exactly what they need to do to pay down their debt and keep financial control of their lives. Kudos to them. But suppose we haven’t done our children the favor of making them at least partially financially responsible during or after high school? Is it too late to remedy that?

I’d appreciate your comments, and I’ll share as many as possible in an upcoming blog post.


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