Have you ever come across one of those student loan horror stories? Of course you have – they’re just about everywhere. You can’t go on Twitter without at least one person moaning about how much he or she owes in student loans. On Tumblr and Pinterest, you get these sad images of students chained by their debt or drowning in past due bills. Even our local news stations hype the student loan debt crisis. Now, don’t get me wrong. I agree 100 percent that the cost of a college education has gotten entirely too expensive. But should students still be surprised by student loan debt? I don’t think so.
Students today live on their smart phones, tablets and laptops. They communicate through social media channels and consume their information electronically. Twenty years ago, I might have given students a little more slack for being misinformed about student loan programs because, let’s face it, how many of us really read those pamphlets we got in the mail or from our banking institutions? Mine typically ended up in a wastebasket. Today, however, students are bombarded with article after article about how to reduce the cost of college, smart borrowing tactics, and how to stay out of student loan default. They are even required to participate in loan entrance and exit counseling. So, with all this information floating around, how is it possible that students still find themselves in trouble or surprised that they have student loan debt?
For one, I think some of the information is bad. For example, I came across this imagine of a woman who swears she has made her loan payments, as scheduled, over the last 23 years, yet now owes more than she has paid. It’s just not possible. Even if she paid just the minimum ($220) at 8 percent interest over 20 years, it would be paid in full. Yes, her final amount paid would be nearly $53,000, but certainly not the $78,000 she’s claiming. The only way this sign makes any sense is if she missed payments and defaulted, or went into forbearance or deferment for an extended time period. Students who make their payments every month will not spend the rest of their lives working to pay off their loans.
Then, of course, there’s Ostrich Syndrome – otherwise known as sticking your head in the sand and ignoring things. Too many students wait until their senior year of high school to educate themselves about financial aid and the cost of college. It’s not until those acceptance letters come rolling in that they realize school costs money! Most turn to their parents, hoping they’ve squirreled away some money or are willing to take out loans to help pay for everything, but few are willing to look at other solutions. All these ‘best of’ lists have somehow convinced students that there are only a handful of colleges worthy of attending, and they’re willing to do whatever it takes to get there – even if that means going into debt. I think it’s time that students stop looking for designer label colleges and find the ones that give them the best return on their investment. Think about it. Would you pay $800 for a pair of shoes when you can get basically the same ones for $80? Of course you wouldn’t, so why should shopping for college be any different?
Finally, I think many of the stories you hear about outrageous student loan debt come from those students who did not take the time to research their intended career field. Law students are among those with the highest amount of debt, but few will find jobs that will pay enough to cover their monthly payments and living expenses. Even the Bureau of Labor Statistics admits that there are more students in law school than there are positions available, yet students continue to enroll and amass enormous amounts of debt. But law students aren’t the only ones paying crazy amounts of tuition. For the life of me, I can’t understand why students would spend nearly $250,000 on an arts or theater degree at a private university, especially when they can earn the same degree at a community college or a public institution for a fraction of the cost. A little research on Payscale.com could have easily prevented some of these students from borrowing above their anticipated salaries.
Whether it’s making poor choices or simply ignoring the facts, students must take responsibility for the amount of student loan debt they carry and make smart decisions regarding their financial futures. We can no longer sit back and say ‘they didn’t know any better’ because it’s simply not true in most cases. The resources are available. It’s just a matter of getting students to use them.