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Wednesday, October 8, 2014

Student Loans and the Voice of Experience ... What Recent College Graduates Have to Say to Today's Students

Experience is a great teacher. Knowledge gained from a good, bad or perhaps painful experience can and should be passed on to those who follow. It can be very helpful to the as yet uninitiated.

For example, let's consider the topic of  excessive student loans and what recent college graduates can teach current and prospective college attendees about their challenges and hazards.

Those 'debtors' who have borrowed to attend college and now have "real world" first hand experience concerning the value and hazards associated with student loans often have a whole lot to teach those coming behind them. So when a recent survey of recent college graduates, as well as current students, dealing with their comparative beliefs about student loans came to my attention, I deemed it worth sharing.

Why student loans are bad for your health has the survey's details:

"Want to know how grim the student loan debt problem is? Just ask our nation’s graduates and former college students, roughly half of whom say that had they known the impact student loans would have on their lives, they would have considered not going to college at all.

A (new) survey . . . finds that student loan debt negatively colors the way graduates and former students look at a college education. Indeed, far fewer former students and grads consider college a worthy investment (66%) than do current students (89%). “Buyer’s remorse” is part of what’s going on here . . . in that former students realize they borrowed too much relative to the career and life options they had once they graduated. . . . Many students are not doing the amount of due diligence on what the return on investment for their education {will be} . . . a fact that becomes clear once they have to begin repaying their loans.

How important is college? Current and former students disagree

Percent of student loan borrowers who “strongly agree” with these statements
Current college students (ages 18 — 24)Former college students (ages 18 — 40)
College is a necessity, no matter how much it costs 74%59%
My investment in college will pay off in the long run89%66%
College is an important investment in one’s future94%86%
I would recommend others use student loans to finance their education64%55%
Furthermore, while half of current college students are comfortable with the amount of student loan debt they’re taking on, just 38% of former college students are; and while current college students think they’ll pay off their student loans by the age of 33, former students put that age at 41 — nearly a decade later. . . .

Dig deeper into the question of whether college was worth it, and former grads will give you some depressing answers about what they’d have done differently or how they view those loans now. Only about four in 10 of them, for example, think they made back (in terms of career and life opportunities) every dollar they invested in student loans.

Students loans come with massive regrets

Percent of former college students who “strongly agree” with these statements
I would have considered not going to college had I known the impact student loans would have on my life47%
Every dollar I invested in student loans, I made back in life and career opportunities42%
Based on what I know today, I would not have financed my education with student loans 52%
I wish I had planned better to manage my student loan debt77%
. . . . Clearly, some student debts come with regrets and can have a negative impact on our lives. So what’s a borrower to do? Students . . . need to consider public, in-state schools, as well as options like the student living at home with the parents and applying for as many grants and scholarships as they can, among other cost-cutting options.

Summing Up

This entire student loan fiasco needs to be addressed.

Lower college costs would be a good place to start.

In addition to lower costs, offering soon-to-be-entering college students some basic personal financial education, including the negative impact of excessive debt, would be a nice high school course for them to take as well.

As the survey reveals, the vast majority (77%) of recent college graduates who now belong to the category of "experienced debtors" wish they could have a "do-over."

But while "do-overs" aren't allowed, new students should take the opportunity to learn from the experience of these graduates while they are still debt free.

That's my take.

Thanks. Bob.

2 comments:

  1. It is nice to read your post and you share some good points online fashion. Please keep posting such kind of stuff.

    ReplyDelete
  2. A man always learns more by the experience so never waste the opportunity to learn something from the experience. This Get instant money solutions now and survey is really interesting but I am happy to see the results that most students think that college is necessary.

    ReplyDelete