Educate students on student loan repayment before, not after college
Hechinger Report recently published a great opinion piece from Karen Gross on the ‘flawed conversation’ regarding the cost of higher education. She says that too much public focus is placed on the hard costs of college, and not enough on the repercussions of taking out student debt and alternative repayment options for students.
We couldn’t agree more with her claims. And until we shift the conversation to this issue, student loan debt will continue to increase rapidly, with more and more students defaulting on their loans.
From college costs to student loan repayment
Of course, high college costs and the fact that they’ve increased significantly over the past few decades, even with inflation taken into account, is a large problem. But because so much attention has been given to this particular issue, most of the ‘solutions’ have involved increasing financial aid, mostly in the form of student loans.
But what happens to students who have to take out those loans to pay for college? Do 18-year-olds really understand how compound interest works and the real cost of taking out $30,000 now? How can we help struggling student loan borrowers? How can we make the process of taking out and repaying student loans more understandable and transparent for borrowers?
Unfortunately, this issue isn’t considered nearly as ‘sexy’ or newsworthy the media and most public figures, Gross says.
Sadly, the vast majority of media coverage of the costs of higher education focuses on the front-end costs of the higher education experience and ignores the back-end repayment options and opportunities.
Colleges aren’t helping to educate student loan borrowers
The main issue is that this conversation about student loan repayment is happening once the student leaves college, if it’s happening at all.
According to Gross, students this is partially because student admissions are “woefully under-informed” about which options are available to students after graduation. Financial aid officers put together a package that usually includes student loans, but they’re not advising you on the consequences of debt.
In other words, colleges care about getting you in the door of their college and enrolling desirable students. They’re less concerned with how you’ll pay for it in the long term and manage your student loan debt.
Understanding student loan repayment before college
Students need to learn about student loan repayment before, not after, they take out loans to pay for college. You can’t go back and un-borrow loans because you realized that $30,000 is actually going to cost you $50,000 by the time you can pay it off.
We believe it’s important to fully understand the long-term impact of college debt. When we advise prospective college students and their families on how to pay for college, this is a large part of the conversation.
Shifting the conversation from high college costs to student loan repayment is a step in the right direction. We hope to see more borrowers and families becoming educated about their choices both before and after college and understanding the real cost of college before they borrow.