I woke up this morning to see that my student loans that were being managed through the government were now transferred to Sallie Mae, an organization notorious for not letting students pay more than their minimum balance on their loans to get out of being in debt for 30+ years and not having to pay as much interest. Not that it mattered, I can only afford to pay the minimum and my whole big master plan of getting my masters degree and getting a job that paid 60k a year and just living like a college student for a couple years while I buckled down and just paid off my student loans was really working out anyway.
But it got me to thinking, we tell high school students to get involved to make their college application more diverse. We tell them to get good grades and high scores on the SAT/ACT to better their chances of getting in. We tell them to apply for scholarships.
But, I feel that we lack in educating students about student loans. According to this 2012 New York Times article, “about 2/3rds of college students borrow money” (2007-2008 grads) versus grads from 1992-1993 (45%). Combined, there is over $1 trillion outstanding from student loans.
What can we do to remedy this seeing as the cost of going to school isn’t going down? Educate the students in high school. Give them the knowledge that they need to figure out what it means to take a loan and what the ramifications are of taking out a loan. And I’m not talking some bullshit hour long meeting or online “class” that they go through. I’m talking a mandatory “if-you-have-even-the-slightest-twinkling-of-going-to-college” you take this semester long course in loans. That walks you through the entire process and how you evaluate YOUR finances to determine what YOUR need is. How you read this legal jargon on the loan papers. How to budget in college. How to get a part-time job. Etc.
Sure, taking classes like Economics and Calculus are great, but throw in one real-world experience class and make it be about managing your own finances. Make it explain about loans. I wish someone would have explained to me more about loans. I didn’t understand them as a high school senior. I didn’t understand how signing this piece of paper was going to affect the next 30+ years of my life. I just knew I needed to go to college and that it was a lot of money.
Now, I know what you are thinking (I don’t, I’m just pretending), if you are going to be an adult and take out loans, you should (cringe) know what you are signing before you sign it. Agreed. It absolutely was my responsibility (and everyone else’s that signed loans) to know what the heck we were getting ourselves into. I absolutely should have done more research and applied for more scholarships and managed my money better and not been so caught up in living a college lifestyle. I recognize the mistakes I made along the way. But I still think that every high school student that is thinking about going to college…Student Loans 101. Semester long course. Show ’em exactly what they are getting themselves into.