‘Shark Tank’ Star Kevin O’Leary Offers Tips For Avoiding Student Debt — Can You Use Them?
With September comes thousands of eager college students embarking on educational careers — and mountains of debt. While few want to spend many years paying for their educations long after they’ve received their degrees, it’s a fact of life for many.
It’s a fate Shark Tank star Kevin O’Leary thinks he can help students avoid, with a few simple tips. O’Leary’s advice may seem a little cut and dry, but other experts offer similar guidance with helpful nuance that students can use to stay in the black — or limit the amount of red — in their personal balance sheets.
In a new LinkedIn post, O’Leary recommends students get a job and skip the expensive coffee. Although it may seem trite, O’Leary makes the case that spending hours in employment and forgoing the latte line can have tangible effects on your budget at the end of the day.
“Spending your weekends wiping tables instead of doing keg-stands might not sound fun but I promise it’s more enjoyable than working overtime for the rest of your life to meet your monthly loan payments.
“$6.50 might not seem like a lot but when you’re buying two or three lattes a week it adds up.”
O’Leary has advice for students still living with their parents: stay there. The Shark Tank mogul argues there is plenty of time for independence, and as along as the elders of the family don’t mind, living at home can save a lot of cash in the long run. If you can’t rent out the basement or your high school bedroom, check out on-campus dorm options and consider a job as a residence advisor that can cut your costs even more.
If you’re choosing a degree path out of love, the Shark Tank star dubbed “Mr. Wonderful” and known for his affinity for money has another piece of advice: go for the credential that will get you cash at the end of the day. O’Leary wanted to be a photographer before his stepfather talked him out of it. Apparently, O’Leary appreciates the advice many years later.
“[H]e said. ‘I asked you what you want to do when you grow up. To be a photographer you’ll be a lot of side jobs and long hours until you can start making money doing what you love…IF that ever happens. For many it doesn’t.’
“I didn’t want to do that. George’s advice prompted me to pursue a career in business instead. A career that today affords me the finances to do what I love–spend time with my family, enjoy quality wine, and finally pursue my dreams of photography.”
O’Leary’s last piece of advice? Don’t buy anything new, especially textbooks.
While Kevin O’Leary may offer many ways to cut costs and avoid taking on debt while in school, CNBC writer and personal finance consultant Kelli B. Grant has more detailed advice. She recommends avoidance of private loans and instead opting for federal government aid, which has lower interest rates, deferment and forgiveness programs. Also, grants are a non-repayable form of aid which students should seek out and ask for at their school’s financial aid office.
Grant doesn’t say you should avoid pursuing an education in the area that you love, but does recommend exploring transfer options. Many students can do their first year or two at a cheaper college and finish their degree at a higher-priced, preferred institution. Taking classes over the summer can also get you more quickly to your degree and out into the working world — reducing the time you spend trying to balance education and living expenses.
Of course, O’Leary is not completely against debt, especially when he is the one doing the loaning. He recently spoke with Forbes about his affinity for Shark Tank deals that have a venture debt component. O’Leary said companies looking for funding should assess their options for giving up equity or taking on debt.
“They should explore both. Equity, once you give it up, you can’t get it back. Debt doesn’t cost you any equity. And once you pay it back, it’s gone. It’s very inexpensive.”
Shark Tank returns to ABC with its season premiere on Friday, September 23.
[Photo by Mark Davis/Getty Images]
