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Student Loan Debt: Why The Decks Are Stacked Against Parents And Students

Aug 25, 2010 Jennifer Williamson, Distance Columnist | 0 Comments

With the student loan industry in crisis, many people are casting around for a scapegoat. It’s easy to blame colleges that routinely hike tuition costs, a floundering economy, and federal aid that consistently fails to keep up with rising tuition. But some point a finger at parents and students themselves.

As a student, nobody makes you go to college. Nobody makes you take out that much debt. And as a parent, nobody forces you to sign on the dotted line for your child’s student debt. But are parents and students really dealing with a fair decision-making process?

Here’s a look at why parents and students—normally rational, intelligent people—fall so often into the student loan debt trap.

Because colleges don’t make it easy for you to choose based on cost
The tough truth is that you just don’t know what you personally are going to have to pay for college until you’ve applied, gotten in, and gone through the financial aid process.

Concerned Women

It’s easy to assume that a degree from a prestigious school will get you a job that will make your student loans affordable,  but many students get hit with a harsh reality check after college. 



And you can’t count on the idea that a prestigious ivy-league school will cost more than a community college these days. Stanford, Harvard, and Dartmouth all regularly waive tuition entirely for families making from $60,000 per year (at Harvard) to $100,000 per year (at Stanford).

At community colleges, however, you may not get as much grant aid as you would at a private school, even though the sticker price for tuition is less. According to the College Board, average grant awards from community colleges add up to only $3,600 compared to $9,600 at private institutions. You could wind up paying much more at your local community college than you would at Harvard or Stanford, once the financial aid chips are down.

Because parents and students can’t compare tuition prices before getting emotionally invested in a school, it’s tough to make clear decisions based primarily on cost.

Because you’re encouraged to ignore the finances

In our culture, education is promoted as always worth it, regardless of cost—the important thing is to get into a good school. Guidance counselors tell students that the finances will sort themselves out. Parents turn a blind eye to tuition costs if students get into a prestigious school. And students often are optimistic about their prospects—not realistic. Of course, degree programs cost the same from the same school regardless of job prospects—further disassociating the payoff in students’ and parents’ minds from the cost.

Because you’re asked to make a major financial decision—with zero experience

High school students are rarely given exhaustive classroom guidance in financial decision-making. It’s a bit unfair that, with zero experience paying off a loan of any kind or making any kind of financial decision larger than whether to buy the trendy sneakers with their babysitting money, students are asked to make debt decisions that will affect them for decades after college. Some students get more help from their parents than others—and many parents don’t do enough to shield students from large debt loads.

Because financial aid officers won’t give you the bad news

College admissions and financial aid counselors are often highly reluctant to give students the bad news—or even explain in relatable terms exactly how the loans will affect the student once he or she has graduated. Many universities don’t ask the difficult questions about whether students and their families can actually afford the kinds of debts they’re signing up for—or advise students to look into a more affordable school when it’s clear they can’t.

Because college isn’t optional

Sure, you could decide not to go to college. But in our culture, that’s typically not a decision that people approve of. Students are facing disapproval from their parents, and parents are facing disapproval from their peers, if they don’t send a student to college. And without a college degree, applicants are shut out of many career paths before they even start—even if a degree isn’t technically needed to do the job itself.

It’s easy to assume that a degree from a prestigious school will get you a job that will make your student loans affordable. But this isn’t always the case—and many students get hit with a harsh reality check after college. Still, with student loans so often in the news, hopefully tomorrow’s parents and students will demand more answers about their financial aid packages and possibilities—and gather the knowledge to make better financial decisions in the future.



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