I speak with high school students daily who are trying to decide whether to go to college and, if they do, where they should go. Everyone talks about choosing a “good school,” but what exactly does that mean?
A good school is one that teaches you what you need to know for your chosen career, and it’s one you can afford. Gone are the days when you could go to college to “find yourself” and only spend a few thousand dollars. I went to school in the early 80’s with guys who worked at full-time manual labor summer jobs and delivered pizzas during school months and were able to fully pay for their college education.
Now, a post-secondary education can cost $20,000, $30,000, $40,000 or more per year, and most students have to borrow most (if not all) monies to make it through (whether they graduate or not).
In their 2015 book, “Student Loans and the Dynamics of Debt,” editors Brad Hershbein and Kevin Hollenbeck reported several disconcerting facts about student debt:
- Between 2004-2012, total education debt tripled, and it was the only major debt source (among mortgages, credit cards, auto loans, and home equity lines of credit) that increased during the Great Recession.
- The average balance per borrow grew unabated during this same time, partly due to interest accumulation from low repayment and high delinquency rates.
- At the end of 2012, 17% of borrowers were behind 90 days or more, surpassing credit card debt as the highest delinquency rate. This difficulty in repaying student loans may have also prevented access to other forms of credit (i.e., mortgages fell sharply from 2005-2012 for student loan borrowers).
At The Paone Group we help students and their families choose a “good school” to prepare them for their career, and to help them minimize the effects of student loans.
And if you already have student loans and are looking for some repayment strategies, we can help you there, too.
Give us a call.