by Katherine O'Brien, MA CCPS
Is heavy student loan debt inevitable?
The average now is over $29,000 per indebted student and, in 2012, 71%
of all students graduating from 4 year colleges and universities had student
loan debt Not only is the average amount
of debt increasing, the default rate, the rate of those who are over 90 days
behind on their payments, has been steadily increasing since 2003. Additionally, student loan debt has the
highest delinquency rate of all forms of debt – an astounding 11.5%! Unlike other forms of debt, student loan debt
cannot be forgiven. Nor can it be
eliminated by bankruptcy. It’s not hard
to see the devastating impact of this loan burden, and the personal habits have
on these students. What can be done now,
while our kids are in high school, in order to avoid this outcome?
From 2005-2012, the average student loan debt jumped from $17,000 to
$27,000, a 58% increase in seven short years.
The impact on their adult lives is significant. For example, people with student loan debt
have a 36% lower home ownership rate.
It’s not surprising that many people are starting to question the
value of a college education.
Key #1 Time to Degree
Overall, the six year graduation rate at American four year colleges
is 59%. At public universities, the
average is 57% while 66% of students in private non-profit colleges graduate
within six years. At private for profit
institutions, the rate drops to 32%.
This means that, nationally, 59% of the students who started college in
2006 were finished six years later in 2012.
But, these are four year degrees!
At most public universities, only 19% of entering students graduate
within 4 years. Even the flagship
publics with excellent research, etc. only graduate 36% of their students
within 4 years. The overall 4 year
graduation rate for all colleges and universities is 39%! The Department of Education reports that graduates who started at
a 2-year public institution and subsequently obtained a bachelor’s degree had a
median time to degree of 63 months. That
means the community college/transfer route is taking over 5 years for half the
students (longer for the other half). Bachelor’s degree recipients who didn't
start college right after high school had a median time of 80 months. (almost 7
years) 44% of 07/08 first time
collegians graduated in 4 years. The
other 56% didn’t; 24% still didn’t have a degree after six years! The 4 year graduation
rates for non-profit private college students are much higher, 53%. Even that leaves nearly half of the
collegians at private colleges and universities still on campus for a fifth
year!
Key #2: Budgeting
The Department of Education also reports that students who received
Pell grants (whose families generally had incomes less that $40,000/year)
graduated with nearly $5,000 more student loan debt than their indebted peers
who did not receive Pell grants. While
it is certainly understandable that such students’ families would need more
assistance since they have less ability to pay, these students are finding
themselves very burdened as they get started in their careers.
College is an investment from which a return is expected. Without information – and the maturity to
contextualize and interpret that information – regarding the consequences of
taking on significant debt while an undergraduate, students are finding
themselves with degrees and too much debt.
Key #3 Getting Guidance
California is ranked last of all US states with a counselor to student
ratio of an astounding 1016 students per counselor. Public students are lucky to be able to meet
their counselors; it is rare to be able to have sufficient contact with a
counselor in order to get any direction about college, at all. What a student may receive is targeted toward
general college preparation ideas, not tailored to the specific collegiate
goals of the students.
The national average is 471 students per counselor, a number still far
above the target of 250 set by the American School Counselor Association. Regardless, high school counselors are
responsible for scheduling, disciplinary issues and the myriad special
education (IEP, etc.) tasks. College
prep tasks quickly become impossible to regularly incorporate into the workday
of high school counselors.
Those families choosing to homeschool may, depending on the way they
acquire curriculum, get some guidance regarding course selection but none
regarding college admissions and funding.
Working Toward a Better Outcome:
In order to reduce a student’s debt, the student needs to reduce their
cost to degree. This can be done by a
combination of reducing time to degree and the costs of college. Additionally, bringing the family’s true
college budget into account in order to make educational decisions in line with
that budget is very important. Lastly,
there are numerous choices that are made during the high school years which
contribute to each student’s ability to reduce their costs in many, many ways.
First, in order to shorten the time in college, it is critically
important for students to have a well formed idea of their goals. In order for college to make sense, it needs
to be leading somewhere in the person’s life.
Before progressing very far on campus, students need to have some idea
what direction they want to take their educations and their lives. Otherwise, they may find themselves educated
but not employed or employed in fields they do not enjoy. Currently, Americans change jobs 11-15 times
during their career and shift careers 3-5 times. Therefore, either having specific career goals
in mind or the goals of being able to communicate well, evaluate and organize
data, and learn quickly will help students be effectively prepared to join the
work force.
Consequently, since I opened my consulting practice in 2004, I have
worked diligently with every student on his or her career search. Through that process, teens learn more about
who they are, what they are good at doing, what they love, and what they do not
like. Taking time to explore these areas
during the first two years of high school, in particular, prepares students to
approach college as the next step in their journey to their future, not simply
“the thing you have to do after high school”.
The process of exploring majors and careers in depth creates relevancy
for high school courses, college admissions tests (ACT, SAT), and gives
direction to course selection for the second half of high school. It also engenders maturity in the students,
who are beginning to seriously consider their own futures in concrete terms and
take on responsibility for themselves.
Secondly, it is imperative that expected net college costs be
calculated during the college selection process and a serious determination of
what can be afforded be made. Otherwise,
the student will identify and apply to phenomenal programs in his or her field,
get accepted to some or all, and only then find that the school is simply too
expensive. I believe part of the student
loan crisis is a failure on the parts of parents and students to do the
research ahead of time. I have heard of
numerous families making drastic decisions because they didn’t want to
disappoint their child who had been accepted at a great school which was simply
too expensive for the parents and the student to afford. With proper preparation, however, the outcome
can be a great college education for the student and financial stability for
the entire family.
Thirdly, when students are invested in their own future, they behave
differently. They understand the value
of their grades and test scores and the role they have to play in creating
their future. Sometimes students hear
this message in a general way during high school. Working with students one on one to discern
their career goals makes it personal. After this process, college is no longer
generic, a generalized education like high school, one size fits all. It is also no longer unfocused. Students also discover the plethora of
options available on and off campus, options they can prepare themselves for
and attain. For example, undergraduate
concentrations or specializations in numerous majors are offered, as is
undergraduate research (starting freshman year at some schools!), internships,
co-operative education programs (working in your field while you are still a
student), interdisciplinary studies, etc.
The list goes on and on and, for the informed student with a focus, it
is no longer bewildering. Having a
career and/or life goal gives college a purpose. During the course of collegiate study, students
will refine their goals and might adjust their majors. However, because of the foundation laid
during high school, extreme changes (like my own switch from engineering to
theology) are unlikely.
SOURCES
https://www.schoolcounselor.org/asca/media/asca/home/Ratios10-11.pdf
