Spotlight on Student Loans:

Back to School: College and Cost

The school to college to indebtedness pipeline

For teachers, students, and parents, August is “back-to-school month.” Whether it’s buying school supplies, planning carpools, surveying bus routes, reviewing curriculum, or moving into dorms, this month can be totally absorbed by the anticipation of school activities. If you have college-bound children, you’ve probably also been thinking about money.

For most of us higher education is one of the largest expenditures we’ll make in our lives, right up there with housing, transportation, and food. Unlike most of the others, however, it comes in a much more concentrated burst, leaving us with potentially hundreds of thousands of dollars of debt over just a few short years. For a select few, that means you or your parents are cutting a big check every term. For the rest of us, that means loans: probably the single largest collection of loans we’ll ever own after a mortgage (and maybe even larger than that!).

Do students really understand the cost of their college debt?

We’ve said it before, and we’ll say it again: Colleges and student loan providers need to do a better job about talking about the real cost of higher ed sooner. If you took out student loans to pay for school, you were required to participate in “entrance counseling.” Generally, it’s an online form you read and sign (i.e. quickly gloss over and click “I agree.”). The whole notion of owing money for school doesn’t really hit most college students until after they graduate and get their first bill, suddenly expected to make huge monthly payments.

We need to reexamine our higher education system and the whole notion of student debt. Many college students take out their very first student loan when they’re 18 years old. Imagine a recent high school graduate getting married, taking out a mortgage, or buying a luxury car on credit; we’d probably think they weren’t ready, weren’t mature enough to be making those sorts of decisions and commitments. And yet, taking out student loans to pay for college is so commonplace, we usually don’t bat an eye at the idea of an 18 year old taking out $20,000 or more to pay for just their first year of college.

Changing the conversation about student debt

What can we do to change the culture around student debt? First off, we need to start talking about it. We get it, money is definitely one of the most uncomfortable conversation topics: parents rarely talk about it with their children, we’re encouraged to keep mum with our coworkers, and you’re definitely unlikely to bring it up in small talk. But people clearly have strong opinions about it, including when it comes to the cost of paying for college. Look at recent news articles discussing federal student debt cancellation, and you’re bound to see widely differing opinions. The fact of the matter is that the price of higher education is rising rapidly, as is the aggregate of federal student loan debt. If we don’t start talking about this crisis earnestly and openly, student debt may start making a more drastic impact on our economy than it already does.

Thankfully, we already have a powerful tool to help combat student debt: Public Service Loan Forgiveness. If you’re a parent, friend, mentor, or even just acquaintance to a college student, start the conversation about PSLF with them now. Many qualify for the program before they ever hear about it, and keeping it in mind from the beginning is a huge advantage. So talk to everyone you know, shout it from the rooftops! PSLF is an important opportunity to eliminate student debt and a way for those without family wealth to make college attainable. We’re probably a long way off from seeing a solution to the college affordability crisis, but—in the meantime—PSLF is a significant and reachable step in the right direction.

For those pursuing PSLF, they’ve had the added benefit that these months of forbearance have counted toward their 120 qualifying payments required for forgiveness. The economy, however, remains fragile, and many are wondering what will happen as student payments resume in the coming monthsnot to mention the end of expanded unemployment benefits for millions of Americans.