Not enough student debt is a problem??

Huffington Post is trying a new spin on an old topic, calling it The Other Student Loan Problem.

Students can ‘suffer’ from taking out too little in loans. By suffer, they essentially mean become non-students, never completing their degree.

“Students who take extreme steps to avoid debt at all costs, they say, may get stuck with something much more financially damaging than moderate student loan debt. They may not wind up with a college degree.

“To pay for college and minimize borrowing, students are working longer hours at jobs and taking fewer credits. They’re less likely to enroll full-time. They’re living at home. They’re “trading down” to less selective institutions with lower prices, and heading first to cheaper community colleges with plans to transfer later to four-year schools.

“Those may sound like money-savers, but in fact each is a well-documented risk factor that makes students less likely to graduate.”

They profile one student whose parents both lost their jobs in 2009. He doesn’t buy textbooks – he’s at the library. He doesn’t eat – much, surviving on whatever free meals he can pick up around campus. He doesn’t sleep as he is carrying 21 hours in an effort to get through to graduation sooner.

He must be flipping exhausted.

Schools are concerned because they are NOT in the business to set up students for failure. They want the full degree-program tuition and the student to exist with a degree.

It is an odd balancing act … taking a chance now and borrowing money believing (hoping) that what you do with that money (get a degree) will help you in the long term. It’s like the debt adverse students are so concerned with the long-term affects of debt that they are ignoring the long-time affects of a degree.

An effort to save has also lowered students hopes about which college they will attend, many opting for a community college or lower tier college when they could go for the gold. Nothing wrong with an associates from a community college, but – in my family’s experience – the more expensive and more prestigious the university, the more they will ultimately provide in grants and other financial aid to get a kid to graduate. It makes no sense, but it is true.

The point of the article isn’t that it is bad to be debt free, but for their example kid, that the tortuous path he is taking may well result in his NOT getting his degree. And the lifetime benefit of a college degree still exists.

There are times in life when you need to go for it, and maybe a college loan is one of those things. I know that I believe the time and money spent on my education were so well used that my poor children never grew up thinking college was something that could be optional. And really … I don’t believe it is.

 

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