Weighing costs of college and risks of student debt
Thursday, March 21, 2013
Beth Cody, Writers’ Group member
Iowa City Press-Citizen

An old high school friend has a daughter who will soon graduate from high school herself. She loves to read and does well in school, so he is planning to send her to college, he told me proudly. She will be the first in his family to attend, so this is understandably very important to him.

I didn’t wish to dampen his dreams, but I had to caution him about college debt and the decreasing value of a degree. Like many parents, he still believes that college is the same ticket to prosperity that it used to be when we were his daughter’s age.

But it’s becoming clear that that’s no longer the case.

I read the other day that 35% of people under age thirty who have student loans (not including current students) are now more than 90 days late on their payments – nearly double the percent of a decade ago.  Most of us know at least one young person struggling to make college loan payments.

The combination of:

  • soaring college costs
  • a mere 65% college graduation rate
  • watered-down degrees
  • only half of college graduates get a job that requires a degree
  • the irrevocability of student debt (declaring bankruptcy doesn't make it go away, unlike when parents were in school)

All these factors mean that college loans increasingly burden students with payments they can’t afford, ruining their ability to buy a house, support a family, start a business or take a lower-paying, more enjoyable job.

These students will essentially spend decades enslaved to government and banks, some paying until age 65 for the decisions that they – often with well-meaning parents’ advice – made when they were only seventeen years old.

To avoid this tragic situation, parents must inform themselves about the new college decision parameters, in order to wisely advise their children about whether to go to college or to instead avoid the hazards of student debt and pursue an apprenticeship or begin earning a living.

These are the questions high school students and parents should be asking themselves:

1. What does the student want to do for a living? If he is unsure, the need for college should be questioned. Avoid any career in higher education, as the bursting of the college bubble will cause mass layoffs.

2. What does the student plan to study? If it is nursing, engineering, mathematics or science, there is a bit more leeway in incurring modest student loans. Otherwise, there is a fair chance that a degree will not pay off in higher earnings, and debt should be avoided.

3. Is the student an academic achiever? If she doesn’t love to read, doesn’t get straight A’s in today’s grade-inflated high school classes and isn’t a self-motivated studier, her ability to graduate in four years or less is questionable. It’s far better not to start college than to fail to graduate and be left with debts and no degree.

If college still seems prudent, students should minimize the cost and avoid debt like the plague. Some ways to do this:

  • *Minimize the time spent in college by taking AP tests in high school for credits, planning coursework carefully, taking a full credit load and never, ever changing majors.
  • *Attend community college for the first two years and the least expensive state school afterward. Studies show little earnings benefit from more prestigious schools.
  • *Live at home if possible.
  • *Work part-time during the school year and full-time in summers.
  • *Parents could take an extra part-time job, but should never co-sign loans or spend retirement funds.

Changing times mean that parents should no longer automatically urge their children to attend college, but should carefully weigh the actual costs and the new risks of irrevocable student debt against the increasingly questionable benefits of college. The consequences are too tragic for parents to do otherwise.