A 17-Year-Old With $0 Income Got Approved for $250K. Here’s the Twisted Reason Why.

On a recent episode of the Money Guy Show, hosts Brian Preston and Bo Hanson tore into one of the strangest double standards in American finance: a 17-year-old with $0 in income and $0 in assets can get approved for $250,000 in student loans based on what they think they might earn someday, while the same teenager could not get a mortgage of any size. Preston put it bluntly: young people have been able to “rack up tens, if not hundreds of thousands of debt” that is “unjustifiable.”

The stakes are not abstract. If you sign for six figures of education debt at 17 because a lender said yes, you are betting your twenties, thirties, and possibly forties on a degree whose payoff you have not calculated. The lender did not calculate it either. That is the entire problem.

The verdict: the approval is the trap

Preston and Hanson are right, and the math behind their position is not complicated. A mortgage underwriter looks at three things: income, assets, and credit. If a 35-year-old earning $80,000 walks into a bank and asks for a $250,000 home loan, the lender pulls pay stubs, tax returns, bank statements, and a credit report. The house itself is collateral. If the borrower defaults, the bank can sell the property and recover most of the loan.

Student loans flip every one of those safeguards. There is no income to verify because the borrower is in high school. There are no assets. There is no credit history. And critically, there is no collateral. A diploma cannot be repossessed. If the borrower defaults, federal student loans follow them through wage garnishment, tax refund seizure, and in most cases survive bankruptcy. The lender has almost no downside, which is precisely why the approval bar is on the floor.

Preston framed the consequence directly: the goodwill of education has been “squandered by a lot of these institutions and the banks,” turning what should be a path forward into “a trap in a lot of ways.” Hanson added the line every parent and student should tape to the refrigerator before tuition deposits are due: “Don’t let the colleges sell you a product that’s not going to actually have a return on investment.”

The variable that decides everything: ROI on the degree

The single factor that determines whether student debt is a launchpad or a leash is the return on investment of the specific degree at the specific school. The same $250,000 sticker price produces wildly different outcomes depending on the major and the starting salary it commands.

Consider two graduates, both borrowing $100,000. Graduate A finishes nursing or engineering and starts at $75,000. The debt is heavy, but the income services it. Graduate B finishes a degree that lands a $38,000 job in a field with little wage growth. Same loan, same interest rate, completely different life. The lender treated both applications identically. The diploma did not.

Preston made the related point that families miss every spring during college tours. The diploma, he said, “only says how long you spent the last semester” and “where you finish.” It does not record how many years you spent at the school or whether you started at a community college. Employers look at the credential on the wall, not the path to it. That single fact is the lever students and parents almost never pull hard enough.

What to do before you sign anything

Treat the college decision like a capital allocation problem, because it is one. Run the numbers before you sign loan documents, not after.

1. Calculate the ROI in dollars. Look up the median starting salary for your intended major at your target school. Compare it to the total borrowing required, including interest over a standard 10-year repayment. If the first-year salary is lower than the total debt, that is a flashing warning light.
2. Stack credits before you arrive. AP classes in high school can knock out entire semesters of general education requirements at a fraction of the cost.
3. Use joint enrollment. Many high schools partner with local colleges so juniors and seniors earn transferable credit while still in high school, often free or heavily discounted.
4. Start at community college, finish at the brand. Two years at community college and two at a four-year school produces the same diploma as four years at the four-year school, for a fraction of the cost.
5. Ask the “pay it forward” question. Before signing any promissory note, ask out loud how this specific degree, at this specific price, will pay it forward. If nobody in the room can answer, do not sign.

The lender will approve the 17-year-old for $250,000. That does not mean the 17-year-old should accept it.