Nothing can kill a dream faster than a lack of cash, as any New Jersey business owner can attest. In fact, many entrepreneurs fresh out of college often have to limit their new business ventures in order to limit debt. With student loan debt topping $1.2 trillion, many business owners are finding that they have to cut costs and limit their businesses in order to grow their start-ups.
The average college student has $40,000 in student loan debt once they graduate. Those with master's degrees and other professional degrees average more than $55,000 in debt. This mountain of debt is a hurdle to budding start-ups who need the stability of a regular paycheck to pay bills.
Of course, there is always risk involved when starting a new business. Some state and federal laws are trying to make the cost of attending college more affordable for the middle class. In addition, some federal loan programs allow students to delay payment on student loans, although interest will still accumulate.
So should entrepreneurs with student loan debt abandon their dreams in search of a regular paycheck? If a person is committed to their business, there are always ways to make it work. Perhaps the person can work a part-time job while starting the business. In any case, it's important to do research first before committing to such a huge venture. There should also be an escape plan in place in case the business is not performing so well. That way, the entrepreneur won't have to get further in debt.
Source: Wall Street Journal, " Student-Loan Load Kills Startup Dreams." Ruth Simon, Aug. 13, 2013