With high school seniors graduating this month and many making plans for college, student loans should become a major family topic of conversation. Many college-bound students are taking out loans to supplement scholarships and grants.
Unfortunately, with tuition and fees seeming to increase annually, students are often borrowing beyond their means. Currently, more than $1 trillion in student loans are on the books, with the average debt per borrower in the neighborhood of $23,300.
Paying off that debt after college graduation should be the topic of discussion now, not later.
We are reminded of the young Arkansas man who was offered an academic scholarship at Vanderbilt University. He made the trip to Nashville with his parents, learning that they would be expected to match the amount of the scholarship with cash or proceeds from loans.
His family decided they could not afford to accept the scholarship despite admissions staff members who urge students to pursue their dreams rather than worry about the price of books, tuition, meal plans and dorm rooms.
Instead, he went on an around the world trip courtesy of the U.S. Army, with yearlong stops in such vacation spots as Iraq and Afghanistan.
Parents who co-sign on student loans could begin to receive those late night calls from bill collectors wanting to remind Junior or Rosalind that their loans are expected to be paid back on schedule.
While a college degree statistically remains a good lifetime investment, it can come with a financial burden. The Department of Education’s latest report indicates 94 percent of students who earn a bachelor’s degree borrow to pay for higher education, more than double the 45 percent in 1993, with 10 percent owing more than $54,000 and 3 percent more than $100,000.
Read the fine print on the student loan forms before signing.