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  • Writer's pictureGary Grewal

Dave Ramsey on Student Loans, College, Bankruptcy, and Consolidation

Today we have the very first Guest Post done FOR Financial Fives, from our pal Ben over at Saved by the Cents (a welcome nod to that show us 90's kids loved to watch growing up). Ben is a special contributor not only because of his exquisite taste in art and media but also because he not only knows the small suburb where I grew up, he actually lived there as well! It was great collaborating with him and sharing the reality of life in Northern California, and we are so excited that he was open to writing a guest post for Financial Fives. Now, I may not agree with 100% of what Dave Ramsey recommends, but there is no doubt his strategy works for many, many people, and his guidance on student loans and college costs are especially relevant today. So, enjoy this post and take note of the talented narrative created by Ben, and go check out his blog!

You probably know Dave Ramsey from the baby steps method to eliminate debt. If you haven’t, you can think of Dave Ramsey as almost the FIRE movement of the 90s and 2000s. There are so many factors we all have to consider like what type of college we should consider, are student loans worth it, what about loan consolidation, and worst of all bankruptcy. At that point, I would be surprised if your mind hasn’t exploded yet from all the stress and chaos. Heck, I think mine already did. Though that’s why it is always a good idea to go through each one and see what Dave Ramsey has to say about each of those topics. As we all know, he always has something to say about everything.

Dave Ramsey on Student Loans

What does Dave Ramsey think about students loans? Well, I can tell you he does not like student loans. He has noticed how student loans are becoming an issue for many students who have just graduated. In 2020 alone, the total student loan debt in America was about 1.7 trillion dollars. No one should ever be paying back that much of student loans all for education. That’s why it is always a good idea to consider all your options before deciding on student loans.

Dave Ramsey has some suggestions that can be financial help for students so that there will be no need to use student loans. For instance, applying for any type of scholarship and grants can be a great option for students. It is one of the easiest ways to help pay for college tuition and school supplies. There are over thousands of different scholarships/grants available that anyone can apply for.

Another option is looking into the type of college you want to go to. Dave Ramsey advice on finding a college that would be the most affordable and suitable for you. Which could mean going to a 2-year college instead of committing to a 4-year college. This way, you wouldn’t be wasting your time and money on a degree that you can earn in 2 years compared to the same one in 4 years. Also, you could look into a trade school as well depending on what you want to do as your career. These options can make a big difference because now you don’t have to worry about paying tuition for thousands of dollars for just the name of a school. At the end of the day, all that matters is the degree you want to earn, not about your college status.

What Does Dave Ramsey Say About College?

Now when it comes to the topic of college, Dave Ramsey is all for it! He values the need for college but also values how much you should pay to go to college. As we all know, most colleges are expensive and many go into student debt because of it. So when it comes time to start looking for what colleges you may want to apply for, you should consider the more affordable route.

You shouldn’t be focusing on wanting to apply for the top 10 best colleges in America. Instead, Dave Ramsey encourages looking into state colleges or community colleges as a better option. There are also possibilities to even do a 2-year program at a community college and transfer over to another college to save money and yourself from student debt. Remember that in the end, you are going to college to get a degree, not for the college parties or for how pretty the campus looks. This is your money we are talking about and you should use your money wisely towards a college that is inexpensive.

Dave Ramsey also preaches the importance of remembering the value of social skills you will gain from going to college as well.

What Does Dave Ramsey Say About Bankruptcy?

Everyone makes financial mistakes at one point or another. Bankruptcy is a legal form of debt relief to help eliminate debt and provide debt freedom.

Hearing the word bankruptcy may sound scary but Dave Ramsey has a huge heart and understands from experience how struggling it may be to possibly go through something like that. That is one of the main reasons why Dave Ramsey is here to help with his financial advice for others. He always wants to help and care for others in a financial crisis like bankruptcy. Luckily, Dave Ramsey can help with that by providing possible options other than filing for bankruptcy.

Bankruptcy is an option that many people choose to go to when they can no longer afford it, though Dave Ramsey has created 6 steps to avoid bankruptcy. Such as taking care of your 4 walls, selling everything you can, budget, job opportunities, being careful, and finding a financial coach. You can also look into different bankruptcy alternatives, like debt settlement or debt management. Keep in mind, bankruptcy should always be your last resort if it comes to that point. Always remember that there are many other options available that can assist you in your financial situation.

What Does Dave Ramsey Say About Student Loan Consolidation?

Dave Ramsey’s point of view has always supported student loan consolidation in certain circumstances. So let’s go over what student loan consolidation is to get a better understanding of his point of view.

Student loan consolidation is when you gather smaller amounts of student loans and consolidate them into one big student loan. That way you can pay it monthly instead. Doing so will help you acquire a lower interest rate and get a fixed rate rather than a variable interest. This will help you from any further interest rate growth. Doing this will help you save a ton of money and also time. This can be helpful when you would start paying back your student loans. To Dave Ramsey, he thinks that student loan consolidation should only be done to end up with overall lower interest rates and going from a variable to a fixed rate. In that case, if you do the student loan consolidation correctly, there should be no problems with starting to save money and time.


It is important to keep all of these in mind as you continue to grow throughout your life. Each one can make a difference in how you will spend the rest of your life doing, whether it is being in a ton of student loan debt or relaxing in the sun with your degree and not having to worry about paying back a dime. Nothing wrong with taking the more affordable way than having to deal with a ton of headaches in the future worrying about where your money is going.


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