The Explosion of Student Debt
With Eldest in the midst of the college search, we're exquisitely aware of the college costs and how her choices impact the issue of debt - and vice versa. So it was eye-opening to see how student debt doubled in little over a decade and actually rose by $100 Billion in one year alone. As many Americans with jobs cut back on their spending and credit card debt, our youngsters are being forced to take on increasing amounts of debt to earn what is the 21st century's equivalent of the high school diploma.
Our goal is to have our daughter come out of college with no debt and we've saved enough over the years to make that happen under certain circumstances and we've shared those circumstances with her for the past several years; God love her, she's taken the conversations to heart and studied to academically achieve what I never could have. The difficulty is that there are plenty of other academically capable seniors also out there, competing against one another for the grants and scholarships that are probably stagnant in their own growth because of the lack of any real returns on the funds in their endowments. It's hard to restock the larder when you're bound by fiduciary requirements and the only real returns today seem to come from a big win in the Powerball.
So what are the various options to help the kids, apart from saving on your own?
- Find out what the graduation requirements are for high school as soon as they're freshmen and lay out in advance what the various routes and alternative paths are. Don't assume that the high school counselors are going to magically assure that everything's done and set for your kid. Late this summer, we found out that while Eldest needed another course in English to graduate, the school enrolled her in yet another History course instead; if we hadn't kept up with it, she'd been in the position of having to jury rig some weird second-semester combination just to graduate from high school with greater than a 4.0 average.
- Investigate if any neighboring community colleges or state universities allow capable high school students to take coursework there. If so, then talk to the high school counselors and administration about what high school courses can be replaced by the college courses instead. Some high schools permit this - as ours does - and the students get a three-fer on the deal. The high school provides credit towards graduation, most colleges and universities will accept the credits on the lower level courses after the student graduates from high school, and the college courses bolster the high school grade point average. For instance, a high school might weight a college prep course with three credits, an honors class with four credits and a college course with five credits; this is how there high school graduates coming out with GPAs of 4.1 and above. The other advantage to this is that there's greater up front cost, but it can be handled in much smaller bites over a longer period of time as the courses are gradually completed over two years and you aren't left with some whopping large bill later on. In Eldest's case, she'll graduate high school with a full semester of college credits already under her belt.
- Assure that the kids have a real sense of what the greater wide world is like. Come Junior and Senior year of high school, they'll be pelted with glossy brochures extolling the virtues of Dear Ol' Wassamatta U, ripe with pictures of smiling young adults, none of whom seem to be half-naked or hungover. While the large majority of them want independence and to be away from the soul-crushing atmosphere of the parents, they also don't want to pay attention to the world around them so that they come into the real world as startled and screaming as the day that they were born. In a sense, the youngsters protesting at OWS are being brought kicking and screaming into a world in which they've been not only dropped on their heads at birth, but used as financial hackisacks by the staff on cigarette breaks. What does this mean on a practical level? From high school freshman year, when the grades really do start to count for the college experience, show them what's been saved so far - if any has been saved. Explain to them where it's at and while $5000 might seem like a lot to a 14 year old with no sense of proportion, then take them to the website for the nearest state university and contrast that with the cost of a semester there. Over the years, continue talking to them about the necessity of a degree and as they age, bring in the concept of wages so that they can start to understand the idea of debtload. In Eldest's case, she discovered what a 529 plan was during the spring of her Freshman year and is now fully aware of what's been saved for her versus what the various alternatives cost. Middle has already had this same conversation even earlier than his older sibling and even Youngest - in elementary school - is aware of the generalities if not the specifics.
- Take the time - years in advance, if necessary - to find out what the various mechanisms and opportunities are out there. Explore college scholarship websites, follow up with the guidance counselors and keep tab on what the kids are thinking so that you're not unduly scrambling in the few months between the end of junior year and the start of the application deadlines. Even then, it's a daunting process.
- Talk to the kids, persistently and consistently on message. There will come a point when they roll their eyes and try to defer and avoid hearing it, but the truth is that they do listen to what's being said.
Eldest is winnowing down the field of alternatives as she mosies through the process. There have been moments when I've hated having to point things out to her because I don't want to intrude on what should be fun years, but those moments of discomfort are offset by the knowledge that there is at least some semblance of an informed decision. While I have no idea where she'll wind up or even if there's going to be some debt afterwards, it's become clear that she's taken the conversations of the past several years to heart.
Keep talking, they're listening.
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