<p>Students, particularly high performing students, and their parents are surrounded by information that tells them the higher a school is ranked, the better their lifelong outcome. They infer from this that borrowing (no matter how much) for “School X” is not only OK, but a smart investment. Until recently college recruiters did not shy away from telling every kid that came to an information session that “college choice should not be about finances”. While it’s true that some of the most selective institutions can afford to give very generous financial aid, most kids can’t get into those schools but still feel that if they don’t attend “the best” school they can get into, they have somehow shortchanged themselves and cut short their lifelong opportunities. </p>
<p>Kids, and their parents, need more real world information about colleges and outcomes and fewer glossy brochures. More course work in financial common sense during high school wouldn’t hurt either.</p>
<p>This is not a sarcastic question, Mom2, but why should NYU be ashamed of themselves? What would you rather them do? I assume that they are not wasting money?</p>
<p>*Can you imagine the howling here if students got rejection letters stating “you can’t come here because you shouldn’t take out the loans we’d have to offer you”? *</p>
<p>Or…</p>
<p>Can you imagine the howling if students got rejection letters that stated: “you have the stats to get accepted, but your EFC is too low and we can’t be a “full need school”, so you can’t afford to come here. Therefore, we reject you.”</p>
<p>That would be crazy because some of those kids (even if only a small %) would like to be able to use their other sources of funds to pay (such as: a NCP whose income wasn’t considered, grandparent-owned 529, high equity in home, assets that weren’t counted in an auto 0 household, etc). </p>
<p>the bottom line is that all students have to accept that the primary responsibility to pay for college rests with the family. And, any students who are applying to schools that they can’t pay for are taking the risk that it’s likely that they won’t be able to go to that school.</p>
<p>The days of a college education being a “good debt” while not over are waning. The colleges need to give those kids who are about to sign up for a bucket of debt a dose of reality. It would be a service to explain what the debt really means, what repayment looks like and what the realistic post degree salaries are. Then the child and parent can make INFORMED decisions. If you sign up for Philosophy (like I did) and $90 k (not me) then its on you. Adults are allowed to make bad decisions. It behooves us as a society to help make those deceions informed so that we are not on the hook.</p>
<p>When things go wrong with college debt the decisions have usually been informed by the marketing department of the college in question and the emotions of the student and family.</p>
<p>A student doesn’t have to accept an aid package. A student also does not have to go to a very expensive school. That’s what community colleges and in state colleges are worth. Go where you can afford. If you take out the loans, you also take out the risk.</p>
<p>Who are “the colleges”? They’re composed of people, at all levels, who care about students and student success. I can’t imagine a single officer in the fin aid office at my employer who would encourage a student to take out extraordinary loans, but, like Kelsmom pointed out, they may insist on doing it anyway. I work in a TRIO program, with some of our institution’s neediest students. I know those fin aid people try darn hard to make an education as affordable as possible. So, why is there debt? Because at most schools–you know, those with names that are never bandied about on CC and maybe a few with names that are–the amount of aid to give is finite. It’s just not there to give,and so you develop systems for distributing what is there as equitably as possible. And loans enter into the picture. As pointed out, what’s the alternative? Ask for financial information with the application and accept/reject on that?</p>
<p>greyhaired - why should the colleges do the service of explaining loans and payback when a simple internet calculator give you the same information? The college isn’t lending the money.</p>
<p>I don’t think admissions should be based on ability to pay, but the individual needs better information upon which to base their decision. There is far too much hype and hoopla to college admissions and not enough hard headed return on investment analysis.</p>
<p>I’ve never known anyone in financial aid to encourage excessive borrowing, but many college admissions officers are very young, very recent graduates from the schools they represent - who often have very sizeable student loans of their own that they are struggling to pay off. Their career paths may not be what they’d envisioned at the outset, but they are usually too young to have the kind of perspective that would forwarn a teenager enamored with their institution - not to mention that it’s their job to get kids to apply. </p>
<p>Much of college ranking is based on opinion and emotion - not financial return. High school kids and their parents are not only poorly informed consumers, they are targets for huge marketing campaigns that encompass college rankings, guides and the entire industry of college planning. Imagine if USNWR ran its rankings more like consumer reports…</p>
<p>Happymomof1, if there was a “like” button here, I’d push it!</p>
<p>The only other thing I’d add is that private student loans should be dischargable through bankruptcy. Just changing that provision of the law would make banks be a LOT more careful about giving out these loans. </p>
<p>We had a housing crisis primarily because the banks that made the sub prime mortgages were insulated from the bad performance of the loans. If banks had to shoulder some of the risk inherent in student loans, they would be a whole lot more careful about lending the money.</p>
<p>By the way CNBC re-broadcast their special report “Price of Admission: America’s College Debt Crisis” the other night and it was excellent. There’s a sticky at the top of the Financial Aid forum which has a lot of information on it.</p>
<p>A student doesn’t have to accept an aid package. A student also does not have to go to a very expensive school. That’s what community colleges and in state colleges are worth. Go where you can afford. If you take out the loans, you also take out the risk.</p>
<p>Very true. We really do have to get back to the concept that it’s ok for a student to commute to a local public. Instead, we’ve created this belief that it’s a right to “go away” to school. In reality, many/most families cannot afford it.</p>
<p>It’s the parents job to say “no” to getting their child involved with big loans. Some parents agree to Plus loans (which really is not the colleges business), but some families do these Plus loans with the family agreement that the student will pay them back. </p>
<p>What I’ve noticed is that the student who come from low income families (with debt) are usually the ones who think big college loans are ok.</p>
<p>I completely agree - private loans should not be a sure thing for the lender. They would behave more responsibly and families wouldn’t be allowed to take on excessive debt, although they would still be able to borrow more than a prudent cost/benefit analysis might deem necessary.</p>
<p>The colleges can’t be expected to know if there’s a wealthy relative waiting in the wings ready to pay off the hefty loan - but if that same relative isn’t willing to pony up the money or cosign the loan in the first place, the investment is seen for the high risk that it is and no responsible bank would take it. There should also be education regarding the overall maximum that a family can pay; some find they are hard pressed to fund junior’s senior year because they’ve maxed out their borrowing potential long before - they should know the big picture from the start.</p>
<p>mom2 - I think those low income families don’t realize how far they’ve strayed from solid ground because the letter from the college gives them the impression that everyone is doing this for their child.</p>
<p>People are getting unsecured loans for amounts that they would not even be eligible to get on a secured basis, just like that, for education. There are people who are cosigning the loans that are not solvent. How on earth is a family with a zero EFC going to repay those amounts. They arent’. And they will end up in even more trouble owing the money.</p>
<p>This is the sort of thing that was happening when banks were giving mortgages to people who had no ability to repay them. At least there were homes securing the mortgage. With school loans, you have no collateral. This whole thing is not right.</p>
<p>I never said a thing about colleges NOT accepting kids who can’t afford to pay. I like it when schools are need blind and can then offer what they do have in terms of aid and merit awards. But to lend money when the borrowers are not likely to be able to repay it at high interests rates is ridiculous. It’s just asking for trouble. This whole system will blow up soon.</p>
<p>Part of the problem is that there are so many myths circulating. First of all borrowing all of this money is supposed to be fine because so many people are doing it. Also some families truly feel that the money is worth borrowing. They put their nose up to community and local state schools thinking that you get what you pay for and Private Tech’s $30K tuition cost makes it 10x better than CUNY or the community college. They really thing those who graduate from there will make up the difference and there are too many in the schools that are selling that pitch.</p>
<p>*People are getting unsecured loans for amounts that they would not even be eligible to get on a secured basis, just like that, for education. *</p>
<p>I agree that that is a significant problem. Qualifying for a Plus Loan (or co-signing Sallie Mae) should require a greater demonstration of ability to pay.</p>
<p>But to lend money when the borrowers are not likely to be able to repay it at high interests rates is ridiculous. It’s just asking for trouble.</p>
<p>Since we’ve never done a Plus or Sallie Mae loan, maybe I’m misunderstanding, but I don’t think it’s the COLLEGES that are lending the money. If colleges aren’t lending the money, then you’re mad at the wrong institution.</p>
<p>Does anyone have the right to any post-secondary education?<br>
We blame the schools, we blame the banks and we blame the parents/students. But we still want what we want, don’t we? And we want it when everyone else gets it (age 18-22). </p>
<p>Sad story: Dear friend’s college sophomore chose to withdraw from school late last Sept because family could not afford it. Dad had just recently become employed after 2 1/2 yrs. unemployed. Went through every last penny, including retirement savings. Freshman year nearly full ride due to situation. Soph yr not so much aid because now he’s employed even though zip in the bank. School wanted to make it work for wonderful family. Loans were offered. Heart-wrenching decision to withdraw made by very mature D herself. She came home, got a job, and started saving. Had another opportunity this semester to transfer to local school for about $5K total cost. Anyone can come up with that kind of money, right? She opted to continue working to save more for the fall, with the understanding that she has to re-apply and may not be accepted then. Kudos to this young lady and her family for making some tough decisions. That’s what we need to see more of. She may be 23, even older, when she graduates, if she graduates. In the grand scheme of things, is that the end of the world?</p>
<p>I went to a financial aid forum and the speaker was from Occidental College. She said they try to meet students’ need in a way that includes about $20,000.00 in student loans by the time the student graduates. Their reasoning, she said, was that students should have some debt in order to be more vested in their own education. Given the cost of Occidental, that’s not an unreasonable debt load.</p>
<p>Unfortunately for many folks, we’ve been conditioned to think that bailouts will happen at a personal level. Maybe if we all change our names to Wall Street, GM, BoA, our kids will get free rides to college. I’m not holding my breath. </p>
<p>My son didn’t apply to any private schools because he said they’re too expensive. (Whew) He only applied to Cal States which are less expensive than UCs. He ended up choosing Monterey Bay because he liked it, it’s about $4,000.00 less than Northridge (his other choice) AND…he’s more likely to graduate in four years.</p>
<p>I’m sorry for the kids who fell in love with expensive schools and the FA packages are falling short. That can’t be fun.</p>
<p>If colleges didn’t include Plus loans in the FA package parents would be more likely to ask themselves “how will we pay for this?” instead of fast forwarding to “this is how we’ll pay for this”. </p>
<p>Do colleges have unwarranted faith in parental math skills? Do parents have unwarranted faith in financial institutions looking out for them? It doesn’t matter where you put the blame, it is a runaway train. The housing debacle came to pass because too many people felt the banks wouldn’t loan them more than they can afford; deja vu with no bankruptcy and no walk away foreclosure.</p>