If you want to be scared straight about college costs, read a Forbes Magazine article entitled The Great College Hoax.The piece argues that graduates who believe that a college degree will start them off on a yellow brick road that leads to greater salaries and a $1 million lifetime advantage over the poor souls who never make it past high school are delusional.
Okay, maybe delusional is too strong a word, but the story does suggest that students borrowing for their education are in danger of becoming indentured servants to unscrupulous lenders.
Unfortunately, that’s too often true for students and their families. Many get in trouble because they don’t even understand the difference between federal loans (better debt) and private loans (the worst debt).
At the risk of sounding like a scold, I’d argue that families should spend just as much time researching the different types of loans and their terms as they devote to visiting college campuses. They should also play around with financial aid calculators to realistically assess how much money they can safely borrow.
Students also needlessly get ensnared by heavy debt after enrolling in the kind of “schools” that are advertised between soap operas. Don’t attend for-profit schools! They are incredibly expensive and you can learn the same trades at community colleges for bargain prices.
Student borrowers need and deserve protections against a lending system that is horribly skewed against them. Even with the change in administrations, I’m not holding my breath that it’s gonna happen.
If you think I’m exaggerating the scope of the problem, read the Forbes piece. And if that doesn’t scare you, try StudentLoanJustice.org.
Lynn O’Shaughnessy is the author of The College Solution.
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