I’ve had a lot of parents asking me lately about whether they should give the green light to their children, who have been accepted into expensive schools without enough financial aid. In response, I want to share a cautionary post that I wrote for my other college blog over at CBS MoneyWatch.
Here is part of that post:
Here is the ugly side of runaway college costs: A frightening number of student loan borrowers can’t repay their federal college debt on time.
According to a new report by the Institute for Higher Education Policy, nearly two out of five student loan borrowers were delinquent on their payments at some time during their first five years of repayment. To be considered delinquent, a borrower’s payments must be 60 days late.
Actually, the news is even grimmer than that. To avoid delinquency, nearly a quarter of borrowers legally postponed their payments.
Here, however, is the reality that I found most shocking: Only 37% of borrowers, who began repaying their federal student loans in 2005, have managed to make timely payments without getting into trouble. That means nearly two out of every three borrowers have been struggling!
The statistics are even more disturbing because students are increasingly borrowing to pay for college. About two-thirds of students are borrowing for college and they are graduating with an average college debt of $24,000.
You can read the rest of the post here: