Do you have a plan for getting your children through college debt free? Today’s conversation is incredibly helpful to that end. Anthony ONeal, author of the new book Debt Free Degree and speaker with Dave Ramsey’s team talks with me today about how we can get our children through college without going into debt, so that they can thrive into adulthood. Since 2003, Anthony ONeal has helped hundreds of thousands of students make smart decisions with their money, their relationships, and their education. He is a national best-selling author who travels the country, spreading his encouraging message to help teens and young adults start their lives out right. He has a new book, Debt Free Degree, that I received an advanced copy of. I devoured it and had got to have a great conversation with him. You can follow Anthony on Youtube, Instagram, Facebook, Twitter, and on his website, which has some incredible resources.
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Show Highlights
I loved my interview with Anthony. I’m passionate about this message. I’m walking this journey right now and I feel like I need all the help that I can get at helping my family get through college debt-free. I encourage you to listen and pass this information on. Anthony’s book basically starts with a game plan that begins when your child hits 7th grade. But anywhere you pick up along the way will be helpful. Those of you who are elementary parents, you get to be way ahead on this.
J: I have enjoyed talking to you before and I’m excited to bring you here to my friends today. I wanted to start with a question: How did you end up as a 19 year old homeless man?
A: I grew up in a Christian-faith home. I had four parents (two biological parents, two step-parents). My mom, my stepfather, and my siblings live in San Diego, California. My father and stepmother live in Fayetteville, NC. They raised me in the Christian faith – knowing God, knowing about church, the Bible, and school. But they never taught me about finances and life skills. When I graduated high school, I didn’t really know much. I knew how to read the Word and quote the Word, but I didn’t know how to spend my money and budget my money. You know, what is a credit card? What is a debit card? What is a credit score? Why do I not need a credit score? When I was in college, I put myself into $35,000 worth of debt ($15,000 in credit card debt, $10,000 in student loans and another $10,000 in furniture loans). I made some bad mistakes and decisions in college and because of that I got kicked out. When I got kicked out of college, my family and I disagreed on some things and my father said that since I thought I was a grown man and had made this decision, I was going to live with these consequences. So, he didn’t allow me to come home and it really hit me hard because I became homeless. I had to live in the back of my car at the age of 19 because my friends wouldn’t allow me to come over to their place.
J: So, three questions I have for you from your story. You had math classes in school? Is that right?
A: I did have math classes.
J: You probably had algebra, geometry. What else did you have beyond that in high school?
A: Just the basic classes that were required.
J: So isn’t this crazy because this is exactly what I see over and over again. You can be the valedictorian of your high school, you can go through Calculus 3 in high school and still walk out of high school with no concept of financial literacy. You don’t know what compound interest is or how debt really works. Was that your case?
A: Absolutely. I think our school systems are doing a great job with teaching us how to read, write, and process information, and even add, multiply and divide. But here’s the thing: you’re right. They’re not teaching us life skills. They’re teaching us all this adding, and geometry, and algebra stuff, but they’re not teaching me how to budget. They’re not teaching me how to add money on a piece of paper and how to pay my bills and what is not necessary and what is necessary. I’m not knocking our education system. I’m just saying that we’re missing some things that are important. And it’s not just our high schools. Our college system isn’t teaching it, which is even more depressing because college is preparing you for your career. But you’re not preparing me for what my career is going to bring me, which is money – money to pay my bills. I love our education system, but I do believe we need to fix it and add some things to it. And that’s one of the things we’re doing at Ramsey Solutions.
J: Yeah and it doesn’t matter how much college prepares you to make money. Let’s take you back to your freshman year. Did you go into college with a lot of debt?
A: I went into college 100 percent debt-free. I went in there with scholarships and my father’s GI bills. So, I didn’t need any money for college at all.
J: You said by the end of two or three semesters you were $35, 000 in debt?
A: Within a year.
J: What was step one of falling into that debt trap?
A: I was on a college campus and I wasn’t educated enough to know to avoid certain people. As I was walking to class, a guy who was representing his bank offered me free pizzas and drinks for a credit card, which was my first credit card of $500 dollars. I filled it out because I just really wanted the free stuff. And what’s so funny is that they are doing the same thing now. They’re going to offer you 10, 20, 50 percent off at a clothing store if you sign up for the credit card. But they know that it’s not really free. You’re going to eventually pay them back for what they’ve given to you. Nothing’s free in this world. Nothing’s really discounted. Because at the end of the day, the person who’s doing that – the bank, store, – they’re going to get their money. Studies show that 99 percent of the people who use credit cards, do not pay the balance off within thirty days before the interest rate hits. And that’s how they get you. When I hear people say “I’m getting a credit card because of the reward points, or because of this or that,” I just think its bogus and something we need to stay away from.
J: You’re pretty passionate about credit card companies and how they’re hooking young people. In some ways they’re getting more sophisticated, but as you were talking about, you don’t have to be sophisticated sometimes. Here’s two free pizzas. I know that at Universal Studios as you go into the park , they’re offering you a free day in the park if you sign up for this credit card. What are some of the other tactics that you’ve seen that they try especially on young people?
A: Right now, it’s just that they are offering free stuff. And another thing is they’re offering discounted stuff. They’re getting very creative. One thing that I’m seeing with college students and that generation is not just credit cards but online stores also. They’re getting very creative on how they are trapping college students into debt. Which is why it frustrates me, because not only are they graduating with the average of $35, 000 in student loans, but then they’re graduating with another $4-$6 thousand in credit card bills – all while they’re in college. That’s just something that I’m passionate about and we’ve got to make sure that were teaching these young people how to get into college debt-free and how to survive and graduate debt-free. I want them going to college debt free, getting their degrees, and walking across the stage the same way they came in – 100 percent debt-free. And I show them how to do that in the book.
J: Now I am excited to talk about your book. I’ve got one more question before we get into it because I think it’s really important for moms and dads to hear. When you were telling your story, you said that your dad basically told you that “you decided you’re a man, you got yourself into this. I’m not bailing you out.” How did you feel about your dad at that moment?
A: I felt like my dad left me hanging to be honest with you. I felt like my dad didn’t really love me because how do you feel loved when someone says you’re not welcome home? I didn’t understand that my dad was giving me tough love, he was giving me true love, he was giving me “man love.” Sometimes tough love from a father doesn’t come off appealing. He knew that if he allowed his son to come home that his son would not become a man. He would stay the same boy. So, he said I had to teach my son how to grow up and that’s exactly what he did. That was probably the lowest point of my life. It was a hard season. I felt like my dad didn’t love me. I had some ill thoughts and ill feelings towards my father and my mother. I even questioned my own life – why am I here? I questioned my Christianity. Is there really a God? Because why would He allow this to happen. But it was God that really checked my whole spirit about my decisions. That was the season of my life that I realized that where I’m at in my present is because of the poor decisions I made in my past.
So, I made a vow that day that I’m going to change the caliber of my future by changing the choices and decisions I make today. And my ultimate mission is to teach all people that the caliber of all our futures will be determined by the choices we make right now. For those listening to this podcast, what choices can you make better that will impact your future and maybe your family’s future? That’s what I am very passionate about.
J: Galatians 6 says that “whatever a man sows, he will reap.” One of the things I see over and over again in families is that parents get under their kids and catch them when they fall, when they really should not because some hurt is good for kids because it will teach them not to do it. And that way they don’t get into situations later that are so dangerous, so out of control that there’s going to be a major crash. So, props to your dad for a very hard decision on his part.
J: I had the joy of getting an advance copy of your book Debt Free Degree. It comes at the perfect time. As a matter of fact, we were at my daughter’s school talking about application deadlines, scholarships that are available, and my wife and I were nudging each other because we have both read the book. So, tell me about Debt Free Degree?
A: Debt Free Degree is the step-by-step process of how to get your kid into college and through college 100 percent debt-free. Student loans have become normal and normal is not setting our kids up for success. It’s setting them up for failure. The average student graduates with $35,000 in student debt. They’re walking into college thinking if I go to college I’m going to make enough money to pay this thing back. But studies are showing us that 12 years after they graduate, the average person still owes about 65 percent of the student loan. This book is about helping all people make better decisions up front, so they can really graduate with a solid foundation and walk into their dream fields, start purchasing homes, start businesses, and not worry about their pasts in their 40s, 50s, and 60s. We have people waiting on the government for student loan forgiveness and the government is failing. Only 1 percent of those individuals have been qualified. We have nearly 100,000 people walking into education thinking their students loans would be forgiven and look at them now. They’re stressed. It is time for us to take action in our own hands and start teaching our young people and start equipping our parents on “here’s how you do it.” Here’s how you do it in the 7th-12th grades. You name it. It’s all in the book. This is why I’m so passionate about it because I just want to help people make better decisions to get into college debt-free.
J: Anthony, your book would be worth buying for the first two chapters. You have some charts in there that help explain just how little your dollar goes. You show some real life scenarios of “if you have this amount of debt and you’re in this field making the average pay, it’s shocking how little bit of money you have.” You did a great job with that. What do you say to people who say that college debt is good debt because a college degree will help you earn for the rest of your life?
A: College debt is not good debt. There is no such thing as good debt. Debt is debt. When we look at what’s happening in today’s day and time, how is $1.6 trillion good debt? How is that helping you out that you’ve got to pay back student loans, but you’re not even investing into your retirement? The first two chapters I talk about the wrong way and the right way. When I hear people say that I get fired up, I get frustrated, but I get it. That’s what our culture is teaching our young people. That’s what our culture is teaching our parents. But that’s why I’m here. That’s why I’m traveling the world – to teach them the total opposite: it’s not good.
J: You mentioned that no debt is good debt. The thing about a mortgage is at least you can sell the house and get out of it. You can’t sell your degree. You can’t sell a degree to get out of a loan. You’re saying that anyone can go to school debt-free. How do you do it?
A: There’s three practical ways you can do it. But before I get to those ways, I want to talk about the two most important things when it comes to our mindset.
- We have to take debt off the table. We have to say that debt is not even an option. Parents going into their 401(k) – that’s not an option. We are going to take debt off the table.
- Talk about your vision. Where do we want to go? What is the plan? When there is no vision, that’s where people perish.
Here’s three practical things I always suggest to parents:
- You’re going to save.
We’re going to do the research. What are the best options for my child when it comes to their degrees? You can work and cash flow that degree. We’re going to look for ways to save.
- You’re going to find money.
I’m challenging parents to make sure their kids get off social media for at least an hour a day and look up grants and scholarships. Be focused and live with intentionality.
- You’re going to work.
J: When would you encourage parents to start planning for college?
A: As early as possible. I’m teaching that 7th grade is when you really need to start having this conversation. I teach this in Debt-Free Degree – “here’s what you need to say, here’s what you need to be doing at every stage of their lives. What are the classes? What are the curriculum you need to be looking into? What are the leadership programs you need to be looking into? When do you need to start prepping for the ACT and the SAT?” It’s a step-by-step process.
J: What would you say to parents who have actually saved for their child’s college, but their student hasn’t yet show the aptitude or the motivation to take their education seriously? I can see how that would be a scary thing for a parent.
A: I can definitely see how that could be a scary thing for a parent. If you’ve saved all this money and you’re not really seeing the young people interested in going to college, I’m having this conversation: “I’m not spending a dime. I’m not wasting my hard-earned money and forcing my child to go to college because that’s what I want them to do.” I’m going to have a conversation with them and ask “What do you want to do with your life? What’s the route?” If they say they want to go into the military, okay. If they say “I want to be a doctor.” Well, you’re not acting like it. We need to switch this thing around. Because sometimes I think we try to sugarcoat things with our kids to encourage them more, but sometimes they need the truth. We’re not going to hand you this. You need to earn this. You need to show us that you are really wanting this. They need to understand that their future is in their hands, not their parents’ hands. The Bible says it is the parents’ job to “train up a child in the way that they should go.” Not give them the way that they should go. Young people need to say “I’m going to take control of my life. I’m going to do as much as I possibly can. It’s the parents’ responsibility not to be in front of them but to be behind them pushing them on, encouraging them. You’re not just giving them everything that they need because they’ll never take ownership that way.
J: Anthony ONeal, you are a wise man. This is a big week for you. Debt Free Degree is now out on Amazon, bookstores, your website. Where else would you suggest that they get the book from?
A: Definitely my website because you don’t just get my book when you buy from my website. You also get the Scholarship Tool, a FAFSA PDF that walks you through how to get grants and scholarships, a college calculator that shows you where you are in the college process, what’s the best affordable school for you. But you’re more than welcome to go to Amazon.
