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Here I am being interviewed by 9News KUSA, the NBC affiliate in Denver, about how to think about college selection and financial aid in tough economic times.
How to Avoid Student Debt: A Strategic Guide for Families
Student debt is not inevitable, but avoiding it requires planning that starts long before your student submits a single college application. The families who graduate with the least debt are those who build a strategic college list, understand every line of their financial aid packages, and know how to negotiate. For a comprehensive overview of scholarships and financial aid options available in the U.S., visit our complete guide to U.S. Scholarships & Financial Aid.
What Are the Statistics?
A recent article by Kevin Carey published in the New York Times (“What About Tackling the Causes of Student Debt?”) digs into the data to demonstrate just how bad it really is.
Mr. Carey, who directs the education policy program at New America, excavates the statistics to demonstrate these main points.
- Students—without assets or income—are limited in how much they can borrow for college. This limit is currently $31,000.
- Statistics obscure the fact that families may borrow much more than this limit. Because parents can take out both federally backed and private loans to pay for college.
- Federally-backed Parent PLUS loans have grown considerably: in 2013. They accounted for only 14% of student loans, but in 2020 made up 25% of student loan volume.
- There is no cap on the amount of Parent PLUS loans a family can borrow, and these loans are relatively easy for parents to get, even if they have no credit history at all.
- Parents can also borrow private money from banks to pay for college. However, these amounts do not show up in national student loan statistics.
The result is that American families are deeply in debt to pay for college in ways that government statistics fail to capture. And as the price of higher education continues to increase—with no end in sight. We can anticipate that the national student loan burden will continue to grow for the foreseeable future.
For personalized guidance on building a college list that maximizes merit aid and minimizes debt, schedule a free consultation with the team at Great College Advice. With over 100 combined years of experience in college admissions, their six-counselor team has the data and expertise to help your family make the smartest financial investment in your student’s future
