Parents, time for 'the talk' about student loan debt
Mom, dad: We hope you've had that all-important talk with your teens.
It won't be easy, it won't be comfortable, you might even walk away knowing only that you did your best to advise them.
Yep, we're talking about student loan debt.
Some call the $1.4 trillion dollars in student loan debt a problem of national proportions that negatively impacts the overall economy.
Others say it's not a problem at all because the students knowingly and willingly accept the thousands of dollars in easy money waved in front of their eyes to pursue their dream job, one they reasonably or otherwise expect will provide a satisfactory lifetime reward for the soul and the wallet.
That debt, though, begins shortly after the diplomas are handed out and is immediately the ball to which their financial chain is firmly attached. It will become the top line of their household budgets — and stay there for decades for some — to be considered before how much they can spend on housing, on means of transportation, on groceries, on ... and on ... and on. The average student loan debt is $39,400, and the average monthly payment is $351. And there's an 11 percent delinquency rate.
Many of us have been down the long road of student loan debt, first for ourselves and then whatever degree of assistance we choose to give to our children.
We curse it even as we are thankful for it.
Is it time for higher education to be free in the United States?
Is it time for colleges and universities to take some leadership in restraining and cutting the cost of higher education?
Or is it time for the dollars that flow with reckless abandon into student loan portfolios to be restricted?
How would that work? Would it be driven by the needs of employers as determined by statistical forecast data? Would only the best and the brightest in identified fields of critical needs have unfettered access to loan funds and scholarships? Would loan funds become unavailable, or offered at much higher interest rates, for occupations with a historically low number of vacant positions? At the same time, could it be offered at lower rates to those who choose certain occupations with demonstrable need?
Does any of that crush part of, say, the bedrock American principle of following your dream? Does it make America the country of the chosen few?
At any rate mom and dad, be blunt with your kids. There's nothing wrong with telling them that some occupations require much less than a college degree and provide almost-immediate opportunities for employment and a salary that is potentially above average. Expose them to opportunities in the vocational-technical arenas.
But most especially be specific about how student loan debt will dominate their fiscal lives for a very long time. And don't just say, “You're going to have a lot of debt.” Give them detailed numbers as accurate examples of how much it will cost them in the long run and in the context of what they can expect to earn in their chosen profession.
Overall, of course, a college education can make us better people, imbue us with tolerance and respect for the culture and opinions of others, inform us of our vastly different histories and mold us into contributing members of society at work, at home and in our communities.
But these are lessons that also can be learned from parents and grandparents.
And it won't cost the kids a dime.