I’m of the opinion that loans are a tool. College is not usually something that sneaks up on people but it’s very easy to not plan for how to pay for college. It’s important to understand the costs of colleges, what scholarships and grants might be available, how need based financial aid works and from there set a budget. It doesn’t have to be a fixed amount but parents need to know what they will contribute. If this requires loans then it’s best to understand how these loans work before you begin the college search process. In a perfect world this due diligence would be done first and no one would be surprised. My guess is that PPL loans would be rarely used and if used understood.
However, many parents act like their child going to college is an unexpected emergency. They don’t understand the cost of college and even if they do they are convinced that it will ultimately be covered by someone else. Only at the last minute will they realize that it will need to be financed and that is where PPL loans are their most dangerous. The kids have been accepted, financial aid isn’t nearly what people expect and it’s an emergency. Rather than admit at this point it’s unaffordable people may turn to PPLs. Little “whoever”, has been accepted to their dream college and the PPL is the easy way to finance the tens of thousands of dollars no one has.
To me the consumer who gets in trouble using PPLs is the primary one at fault. they are the ones who go into this too late and who often are willfully ignorant. Second, would be the government as they make it so easy to make devastating financial decisions and finally the schools by not encouraging families to have this discussion early and in many ways encouraging this behavior by making it sound like the costs can be relatively easy to take care of.
I did get around to reading your responses, and I do understand that not endorsing unsecured debt and holding the opinion that financial aid is a debt product that requires more regulation due to the rampant problems surrounding it is not going to be popular with college employees or most Americans.
The idea that student loans are necessary and are a blessing to people who seek education has been thoroughly refuted by other posters on other threads; one post comes to mind on the thread about keeping college costs down for everyone, which morphed into a Why? thread quickly.
Anyone who is not willing to accept that there is a student loan crisis is choosing to live under a rock. I don’t have student loans any longer, but I accept that I am fortunate. Yes, I chose to pay them off. Yes, I didn’t enroll at a school that I could not afford. I also ignored a LOT of terrible advice that would have sunk me financially from people employed by colleges, all well-meaning, who were tone deaf at the time to this looming crisis and were giving me advice based on what benefitted them first. And all of this occurred before whoever dreamed up the idea of Parent Plus loans had started marketing it to people who didn’t know any better and weren’t skeptical enough.
I have enough humility to recognize that my own choices only play a small part in what will make my situation very different from the subjects of this article. Some of it was being born to a family that could teach me to be reasonably skeptical of exaggerated claims. Some of it was being wise enough at 14 to recognize that I didn’t have what other 14-year-olds had, and to capitalize on my situation as best I could.
If any of us are better off than the people in this article, then yes, luck played a role. I feel sorry for anyone who can’t see that. That sort of ego problem is sad.
I will disagree about luck playing a role for “any” of us. Given his job status I am guessing that I am in a similar economic situation as the couple in question. I too have two Ds. I would not have allowed my children to consider NYU. Not because it’s not good school but simply because we could not afford it. What the couple chose to do was irresponsible not bad luck. I’m sure there are any number of schools that two young ladies smart enough to get into NYU could have been accepted to and received enough aid to make it affordable without taking out crippling loans (note I didn’t say loans). I had figured out what we could afford to contribute and my kids knew what that was. They could apply anywhere but getting accepted was only part of attending. I do pity the couple but this was primarily their creation.