• Kristen Moon

Top 5 questions to ask before taking on student loan debt



Many high school seniors will soon be deciding where to go to college and making difficult choices about whether to take on student debt to attend a particular school. Below we have answered the top 5 questions you need to ask yourself before signing on the dotted line and accepting the loan. Our "tough love" answers may not make you happy, but you will thank us later.

1. When does it make sense to take on student loan debt and when doesn't it?

It is possible to attend a good university at a price students can afford. Between federal aid + state aid + reduced in-state tuition, it is feasible for all students to attend college with minimal loan debt. The problem arises when the student does not want to attend the less-expensive state university and instead opt for the private university that is offering no aid and is $65K a year.

Students and parents must face reality: if you cannot afford it, you cannot attend. Would you buy an expensive luxury car you could not afford? No, that would be crazy! So why do students insist on attending universities they cannot afford? Why do parents support the idea that it is ok for their children to take on student loan debt in the six figures?

2. How much student loan debt is manageable, and how much will severely limit your future choices?

As an independent admissions counselor, the only loan type I recommend is the Stafford Loan. The maximum a student should borrow is the maximum offered by Stafford. No private loans, no cosigners, no exceptions.

3. What impact, if any, should the possibility of student loan debt reform have on today's high school seniors' decisions about how much student loan debt to take on?

Young adults are drowning in student loan debt. The media constantly blames the universities for charging such an exuberant price, but I blame the student and their parents. The reality is that students need to attend a university they can afford. Plain and simple. Parents need to educate their children on what it means to take on large amounts of debt and not bank on debt reform being the solution.

4. How will student loan debt affect your life opportunities and choices after college?

It is very easy to apply and receive a student loan. The reason for this is because this type of debt cannot be discharged in bankruptcy. In fact, if a parent co-signs for a loan and the student dies - the parent is still on the line for the debt. Student loan debt can cripple a student upon graduation, especially if they select a field that is not profitable.

5. How will not taking out student loans to attend a better school and attending a more affordable school instead affect your job and life opportunities after college?

One of the best life lessons a parent can teach their children is how to responsibly manage money. Guiding a student to attend a college they can afford and be responsible when it comes to borrowing money is a valuable life lesson for the student; perhaps even more valuable than attending a prestigious, expensive university.

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