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Why College Students Go Deeply Into Debt

Paying for College

It's becoming increasingly expensive to obtain a college education. Consequently, students and their parents are taking on record amounts of debt.

I'm looking at this from the perspective of a mother of a soon-to-be college freshman, who's going to be saddled with loans. This happened despite the fact I often write about the dangers of mortgaging your future. So you can't say he wasn't forewarned.

Unfortunately, there's evidence that owing a lot of money, at a young age, has grave implications for the future. A large survey of 30,000 former students, conducted by Gallup Education, found that even decades after leaving college, those who borrowed in excess of $25,000 reported less job satisfaction, and overall happiness, than their peers who had no college debt.

Students who left campus more recently reported increased struggles with repayment issues, compared to older graduates, the survey noted. The levels of distress were most apparent for those graduating after 2010 who had borrowed heavily.

Getting this deep into debt, to finance a four-year degree, is not so hard to do, considering the fact that tuition (plus room and board) at some private schools now tops $60,000 a year. The pollsters found that about 11 percent of students did borrow $50,000 or more to fund their bachelor's degree. The average student, though, now leaves college owing about $33,000.

However, it is possible to obtain a degree with only minimal debt, or no debt at all, if you plan carefully. On the other hand, with intense pressure to attend the college of your dreams, this goal is very hard to put into practice.

Most college students are in debt.

Most college students are in debt.

External Pressure to Attend the "Best" College

Getting a child pumped up for college starts early, at least by his or her first year of high school, if not much sooner. The entire focus of high school is now to prepare students for college. A few graduates do decide not to attend. But they are a distinct minority. It's generally expected that nearly everyone will at least go to a community college.

In their junior year, students are bused to various college fairs, where they get to meet admissions representatives. Sometimes these reps are very aggressive.

My son is a good student and he did well on his SAT test. One out-of-state rep of a well-regarded public university wouldn't leave him alone. After repeated phone calls and emails, my son relented, and agreed to meet this man at a coffee shop. I drove him there.

After selling us on the merits of the school, my son brought up the fact that he could attend his equally prestigious in-state flagship for much less money, especially considering travel costs to fly halfway across the country every time he wanted to come home.

"Oh, but that's a small price to pay for your education," he was assured.

Pressure from Teachers and Administrators

Pressure also comes from teachers and administrators. For instance, my son applied to a couple of "safety schools," which were four-year colleges where his credentials stood out. This is because we knew he'd be virtually assured of a very generous merit aid package, something not guaranteed at a more elite institute.

Students from moderate-income families need to have some safety schools lined up. If they don't, and they can't afford a dream school, they likely end up at a community college. Knowing how much my son wanted to go away to school, what we did seemed like a prudent back-up plan.

However, one of his high school teachers caught wind of the safety school applications, and pulled him aside, with the admonition of, "You can do much better than that."

As it turns out, my son won't be going to one of his "safeties." But neglecting to apply could have turned into regrets.

Not coincidentally, your child's junior year of high school is also when you start receiving a lot of mail from private loan lenders.

Student Loan Debt

Societal Pressure to Attend the Best College

Society also exerts a strong pull to gravitate toward the "best" college, whether you can afford it or not. Friends, relatives and neighbors will urge you to go to this school or that school. Expect many people you encounter to talk up the college experience. Most of them are probably just making conversation. But they do this because it's expected your child will be going away to school.

One of my children decided to live at home and commute to campus, for reasons more related to her shyness and apprehension of living in a dorm, rather than monetary considerations. The program in her major is also superior at the university a few miles from our home, so this factored into her decision as well.

The fact that she did well in high school added to some people's disbelief that she wanted to earn a degree while living at home. One person pointedly demanded an explanation.

College tuition has risen exponentially.

College tuition has risen exponentially.

Peer Pressure to Attend an Elite School

High school students also have to deal with a lot of peer pressure when it comes to college. Sometimes, this leads them to making unwise decisions. My son's friends come from a variety of backgrounds. Most of their parents are fairly well to do.

However, one friend comes from a very needy family. Marching in lockstep with the rest of the crowd, he settled on an elite school he couldn't afford. He would have left owing at least $100,000, if he'd actually been able to enroll.

Sadly, he couldn't come up with money he needed to pay his first semester tuition. Caught up in the excitement, he didn't apply to a safety school, where his grades would have made him a stand-out candidate. His only option now is community college.

Internal Pressure to Attend the "Best" College

Perhaps, though, the strongest pressure to attend an elite school comes from the student themselves, who've worked really hard in high school to keep their grades up, and study hard for their SAT exam.

Even though it's going to mean taking on a lot of debt, youthful optimism usually wins out. Most young adults head off to college with the idea that they'll be wildly successful after graduation. The fact that they may not land a high-paying job, in order to pay off their loans, isn't something they like to think about.

Student Borrower with Regrets

Financial Aid Set Up for Loans

Only a handful of colleges in the United States will offer a financial aid package free of loans, if your income falls below a certain threshold.

The rest of the schools generally assume you'll take out the maximum amount of loans offered. In some cases, there's virtually no way around this.

For instance, the school my son chose, and desperately wanted to attend, offered a small merit scholarship. Some large need-based grants make it "affordable" only when students loans are factored in. These grants are much different from a scholarship, because they're based upon our income.

If they weren't, we could have used our savings, combined with my son's earnings from his part-time job, to avoid taking on debt for two or three semesters. This would have greatly reduced the total amount of money owed. However, in order for him to keep his grants, my son needs to take out as many guaranteed federal loans as are offered.

Unfortunately, for students and their parents, educational institutes are very invested in the system of borrowing heavily to pay for an education.

Borrowing for college is the norm.

Borrowing for college is the norm.

Financial Advice for Paying Down Loans


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ologsinquito (author) from USA on September 01, 2014:

Hi verymary, I totally agree it should be the "best fit." My son's friend, a very smart student, made a wrong choice because he was looking for the "best," despite the fact his family has no money, and he could have gotten a sweet scholarship elsewhere. Now, his best choice is probably community college.

ologsinquito (author) from USA on August 27, 2014:

Hi Torrs13, it sounds as if you have a really good attitude and that you will get these loans paid off quickly. As you've noticed, the pressure to go to "the best" school is intense.

HSchneicer and Arran, thanks so much for reading.

ologsinquito (author) from USA on August 25, 2014:

Hi DDE, you are absolutely correct. It's so easy to get into debt, but the payback comes later. That's when some students begin to question whether it was worth it or not.

ologsinquito (author) from USA on August 24, 2014:

Hi Eric, Shara, Alicia and Cassandra, thanks so much for reading. I can see how easily it is for someone to owe $60,000 for an education. The saddest thing is when students take on debt, but do not graduate.

ologsinquito (author) from USA on August 22, 2014:

Hi Brie, I still think the students need to earn a degree, but they should do so in a manner that doesn't involve taking on a lot of debt. But I agree about the scam aspect, especially for the high-priced institutes.

ologsinquito (author) from USA on August 22, 2014:

Hi Flourish, I hope my son did too. Time will tell if this was a good thing to do. But he sure is excited right now.

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