THE TRUTH ABOUT YOUR FUTURE with Ric Edelman – Episode #3: Make This Mistake, and College Will Lead to Your Teen's Ruin

Date: November 11, 2025
Host: Ric Edelman

Episode Overview

In this third installment of his podcast series on college (celebrating his upcoming book "The Truth About College"), Ric Edelman takes a critical look at the financial pitfalls of higher education. He focuses on the economic realities families face today, especially the enormous and often misunderstood risks associated with student loans. Ric’s central argument is that college choices must now be guided primarily by a degree’s return on investment (ROI) and the absolute necessity of avoiding student debt—a “deadly trap” with lifelong repercussions.

Key Discussion Points & Insights

1. The Economic Imperative of College Decisions

• Americans’ Default Attitude: College is the assumed next step for most teens, encouraged by parents and counselors.
• Income Disparities by Major: Ric cites New York Federal Reserve data:
  • “Five years after graduating, people with a degree in engineering earn an average of $73,000, while those who get a degree in psychology earn just $40,000.” [02:17]
• Uniform Tuition, Variable Returns: Despite the cost of delivering different programs, college tuition is typically the same across majors, resulting in some students effectively subsidizing others:
  • “If the psych major only earns half what the engineering major is going to earn, why is the psych major paying the same for the degree?” [02:50]
• ROI Is Critical: Given today’s higher costs and stiffer job competition, the return on the massive investment in college must be top of mind.

2. The Myth of 'Following Your Passion'

• Ric challenges the common advice that students should pick majors by passion alone:
  • “Following a passion is a hobby or a side gig, not a full-time career—at least not until that gig is generating some serious income.” [05:57]
• He highlights the changing context since the 1960s, when degrees were unique and cheap, versus today’s expensive and common degrees.
• “If you let a teen pursue a degree that doesn’t lead to sufficient economic reward, you’re setting that teen up for failure and ruining their life.” [07:09]

3. The Student Loan Trap

• Student loans are prevalent and devastating:
  • “More than half of all students get student loans and they leave college with an average debt of more than $41,000.” [07:56]
• Long-term life consequences:
  • “71% said that because of their student debts, they have been forced to delay buying a car, buying a house, getting married, having children, and moving out of their parents’ home.” [08:27]
• The perception that loans are “necessary” is wrong. “Student loans are not okay. Quite the opposite. They’re dangerous.” [10:03]

How Student Loans Differ From Other Loans

• No Down Payments: Lenders will often loan more than the cost of tuition.
• No Income Required: Loans are made without proof of repayment ability.
• Delayed Payments: Students don’t repay until months after graduation.
• Cash to Teens: Funds given directly to students, not schools, leading to risky non-educational spending.
  • “16% buy clothes, 13% spend the money at restaurants… and another 3% use the money to buy alcohol and drugs.” [15:52]
• No Bankruptcy Protection: Student loans cannot be discharged in bankruptcy—unlike mortgages or credit card debt.
• Ric emphasizes, “You cannot discharge your student loans by filing for bankruptcy. With every other type of loan, going bankrupt eliminates your obligation to repay. Not so with student loans. You’ll still have to repay them no matter what.” [17:12]

Collateral Damage for Families

• Many parents co-sign loans, creating multi-generational risk:
  • "90% of student loans have been co-signed by parents or grandparents." [19:40]
  • "Four million parents owe $65 billion to Parent PLUS loans." [19:52]
  • "Nearly 200,000 retirees have had their Social Security checks garnished by the federal government because the students didn’t repay." [19:57]

4. Addressing Common Misconceptions

• "Free Money" Is Not the Solution: Only 11% of students get a grant or scholarship, and the average is less than $16,000–just a fraction of the average college cost. [20:20]
• Graduation Speed Matters:
  • “Choose an inexpensive college and graduate in four years. Those who do that end up with a third less debt than those who graduate in six years.” [20:58]
• The Aging Debt Burden:
  • “42% of all student loan borrowers are still paying off their debt twenty years after graduating.”
  • “3.5 million Americans over age 60 have $125 billion in student loan debt.” [21:33]

Notable Quotes & Memorable Moments

• “This might be the most important point in the entire podcast series I’m giving you.” [04:20] — On the need for ROI in college decisions.
• “If the cost of college is a money pit, then student loans are the shovel.” [07:16]
• “Student loans are not okay. Quite the opposite. They’re dangerous.” [10:03]
• “You cannot discharge your student loans by filing for bankruptcy… You’ll still have to repay them no matter what.” [17:12]
• “You must make sure that your teen avoids student loans and graduates debt free.” [22:10]

Key Timestamps for Important Segments

• 00:01–02:00 – Introduction: Why college decisions are so consequential
• 02:01–04:15 – Degree income disparities and hidden subsidy issue
• 05:55–07:15 – Passion versus paycheck, and generational differences
• 07:16–11:15 – The scale and consequences of student loans
• 13:20–18:00 – How student loans fundamentally differ from other types of borrowing
• 19:30–21:55 – Parents as co-signers, long-term and intergenerational debt
• 21:56–23:00 – Avoiding loans, grant/scholarship realities, the urgency of finishing fast
• 23:10–end – Teaser for next episode; practical next steps

Summary & Actionable Takeaways

• ROI Should Drive College Choices: Pick majors and schools that offer a real economic return.
• Student Loans Are Uniquely Dangerous: Their structure, lack of protections, and long-term impact make them especially hazardous.
• Grants/Scholarships Unlikely to Cover True Costs: Don’t rely on them as a primary strategy.
• Speed and Affordability Matter: Graduate quickly and choose an inexpensive school to reduce risk and debt.
• Parents Risk Financial Fallout: Co-signing is dangerous and can have lifelong effects—even garnishing Social Security.
• Debt-Free Graduation Is Possible and Vital.

Next Steps

Ric teases that the next episode will cover “how to minimize the cost of getting a college degree and 12 mistakes students make.” He strongly encourages listeners to pre-order his new book for more insights and tools, including conversation starters for families wrestling with college decisions.

“You must make sure that your teen avoids student loans and graduates debt free.” [22:10]
Share this episode with every parent and teen you know.