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Do you regret going to college and amassing huge student loan debt?

Consumer-Reports-August-2016-780x1024How did the nation’s growing student debt crisis, in which about 42 million people owe $1.3 trillion, occur?

Degrees of debt and regret

Because getting a college education translates into a better future and higher lifetime earnings, it should be worth the money you spend on it. But for 1,500 Americans with student debt, the burden of paying off huge loans has left many questioning whether college was worth the cost after they left, according to a survey by the Consumer Reports National Research Center.

Forty-five percent of people who are no longer in college and have student loan debt said that college wasn’t worth the cost.

Of those who said college wasn’t worth the money:

  • 38 percent didn’t graduate.
  • 69 percent have had trouble making loan payments.
  • 78 percent earn less than $50,000 per year.
  • 43 percent didn’t get help from parents when making financial aid decisions.

The Consumer Report’s survey showed that once people leave college, student debt impacts them in a variety of ways. For example, 44 percent cut back on day-to-day living expenses, 37 percent delayed saving for retirement or other financial goals, 28 percent delayed buying a house, 12 percent delayed marriage, and 14 percent changed careers as a result of student debt.

Consumer reports suggests “Having the College Money Talk,” in which parents and teens sit down for a discussion about family finances and create a plan so that everyone can weigh his or her options rationally when acceptance letters and student aid offers are on the table. It begins with 10 key questions:

  1. What does your student want to get out of college? Only 39 percent of college students graduate in four years, often because they change majors or take classes that don’t count toward the degree they eventually choose. High school students can explore career options before they head off to college through volunteer work, gap years, or job shadowing.
  1. How much will college cost, bottom line? How much you pay depends on your family’s financial situation, the student’s academic record, and other factors. To evaluate a school’s true cost, you need to get down to the “net price.” And don’t assume that their state university will be the most affordable option. Some smaller private colleges can be cheaper than most prominent public universities in a state.
  1. Should parents contribute, and if so, how much? Financial advisers say parents should prioritize saving for retirement over paying for their kids’ college. Specialists Consumer Reports consulted provide a rule of thumb on how much parents can borrow without affecting their own financial security.
  1. What about community college? Starting off at a community college and then transferring to a four-year institution can be a good way to reduce costs. Consumer Reports highlights the growing number of states and cities offering programs that make community college more affordable or even free.
  1. Any other ways to cut costs? Consumer Reports looks at other options for reducing costs, such as studying abroad and using ROTC scholarships for those interested in a military career.

Consumer Reports has partnered with Reveal, a nonprofit organization from The Center for Investigative Reporting, to produce a report examining student loan debt.

You can find details at ConsumerReports.org/studentdebt and RevealNews.org/studentdebt. Consumer Reports and Reveal provided separate articles by each organization, videos, infographics, survey findings, and student profiles.

Reveal’s version researches the players and decisions that created the student debt crisis today including the roles played by banks and investment firms, private investors, debt collection agencies, the federal government, and public universities.

In addition, the topic is the focus of Reveal’s hour-long public radio show and podcast, which begins airing on public radio stations across the country starting on Saturday, July 2, and will be available on the Reveal podcast on Monday, July 4: revealnews.org/podcast.

Copyright 2016, Rita R. Robison, Consumer Specialist

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