We Have Created a Monster!

We have created a monster. And, like Frankenstein's monster, it is out to destroy us. The monster is student loan debt.

We, just like Victor Frankenstein in Mary Shelly's great novel, had all good intentions. Increasing college access and affordability for students less able to pay, by making federal grants and low-interest loans available, seemed like the right thing to do.

Now, though, we look at over a trillion dollars of loan debt and wonder how did this happen? How is it that the very families we hoped to help are now priced out of the college market? We have actually made things worse, not better. The high price of college keeps getting higher and the specter of enormous debt is a barrier of our own making.

One low-income mother of a student at Chelsea High tells me, "I want her to get a good education. She is smart and works hard. I know she can do it. We just don't want to end up with a huge student loan. What kind of job is she going to have? How much can we afford to pay off? That is the challenge that we're facing."

Another hard-working low-income parent expresses a concern about a mounting family burden of student loan debt. "One major fear that I have is that I went back to school late and I still I have loans that I'm paying. Not a good record of paying back, so of course that's a concern of mine right now, like when that time does come to sign those promissory notes, because I expect that there will be some loans that I have to take [for my child's college education as well]. But what will that mean for someone like me, who has struggled through the years to try to pay back my own college loans?"

The prospect of loan debt is keeping many qualified students from seeking a higher education. In fact, price is the major factor for low-income students in deciding whether and where to go to college and only 14% of low-income high school graduates earn a bachelor's degree within 8 years of graduation.

What can we do to corral this monster?

Bernie Sanders, a newly-announced presidential candidate, suggests taking President Obama's Free Community College proposal a step further by providing low- and middle-income families the opportunity to attend any public college or university for free.

Other politicians and potential candidates for the presidential nomination have voiced serious concerns about student debt and have made a variety of their own proposals.

I don't believe that free tuition at public colleges is going to happen any time soon. The best we can hope for is that this debate may move the needle a bit on how we view the system of public higher education and it may also open the door to other options for low- and middle-income student affordability.

In the meantime though, low-income families with students approaching college age need to make decisions now about whether and where to apply.

For some of them, Pell grants, and college and private scholarships will help to keep the loan debt low. But, for those families and students who simply cannot afford to take on the burden of loan debt, the option of using savings and starting at a community college seems like a realistic choice.

A Chelsea High parent very concerned about debt confides, "I talk to my daughter about it because she wants to go to an expensive school, but we're talking about different options. She has come to the point where she's understanding that if she gets a free ride to [the community college] for two years she's going to go there."

Another, whose son wants to go to medical school, tells me, hopefully, "I tell him there is [the community college]. He can start out there doing the small courses, look for a little part-time job, and that way he'll get ahead. If he goes first to the university, it will cost a lot more money per credit than what he can pay and afterward he can transfer them to the university. Now he says to me 'Yes, Mom, that's what I'm going to do...'"

The option of starting at a community college is not without its risks and down sides. Students who start at community colleges, for a variety of reasons, are less likely to graduate with a degree and less likely to transfer to a 4-year college. What's more, if they have taken on any debt at all, they still have to work to pay it off and, generally speaking, not completing a degree is a pretty good predictor of debt repayment difficulties and loan default.

Nevertheless, the community college option makes sense for many students. In fact, a recent study by the Urban Institute reports that students who attend and graduate from community colleges have the least debt of all students graduating from college. Fifty percent of them have no debt at all.

The Urban Institute report gives us some other strategies for how families can minimize their loan debt. The lowest debt among students graduating with a bachelor's degree is in the group who went to a public 4-year college. Of these, 36% graduated with no debt at all and 26% had less than $20,000 of loan debt. Graduates of 4-year private non-profit colleges tend to have more loan debt and graduates of the for-profit colleges have the highest levels of debt.

A couple of other factors are linked with lower debt. One is graduating on time. The longer students stay in school, the more debt they tend to accumulate. Another is remaining as a financial dependent on their families.

All-in-all, the best short-term approach for families trying to keep loan debt low is to encourage hard work to get good grades in high school to increase the prospects of earning grants and scholarships, seek out all available public and private scholarship sources, save money to pay for fees and expenses, and carefully select the colleges of choice with loan debt reduction as an important factor, whether they are public or private.

I don't know what will end up lighting the fires that will corral the student loan debt monster we have created. But I have faith that making college more affordable for all is a goal the majority of us believe in and will work to make a reality.