College Students Need a Better Support System for Financial Health, Survival and Success
Realistic goals and “skin in the game” are great — but for many young people, that’s just not enough.
Young people applying to college these days are repeatedly warned about the dangers of aiming too high, financially speaking. They are constantly hearing from guidance counselors, parents and experts about how foolish it is to apply to schools you won’t be able to afford, resulting in either a big disappointment or massive student debt.
I heard one expert say, “Your ‘dream school’ is the one you can afford.” Those are wise words, and it definitely is smart for students and families to focus on schools within the affordable range as opposed to one that’s far out of the realm of financial possibility. But for many students, even their local public university is out of reach, at least without taking on significant debt. In those cases, the system has failed to live up to its promise to young people — the promise that says if you work hard, earn good grades and don’t have unrealistic expectation of getting an Ivy League school for a state school budget, you will have the opportunity to get a good education.
We are constantly telling our kids from the time they are very young that the key to a rewarding career and financial security is a good education. Yet all too often we fail to provide them with the financial tools or resources to get there, leaving them scrambling to figure out what to do, and in many cases setting them up for failure despite their best efforts. We as a community and a society can do better. We owe them more.
Why student financial health matters to me
Student financial health is an issue of deep personal significance to me because I’ve seen its impact up-close from many sides. As the first one in my family to attempt to go to college — and having spent my entire life up until high school graduation on public assistance — I struggled to try and figure out the process on my own, clueless about how I was supposed to pay for it. (This was back before computers were so common, and long before you could Google the answers to anything you needed to know.) I started school, while also living on my own and working two jobs to try and pay for rent and groceries. Not surprisingly, it didn’t go well. I was only partway through my third semester when I ended up dropping out for lack of money.
Years later, as the parent of several college students, I tried to help them navigate the myriad of forms, applications, bills and other documents involved. While the availability of quick answers via electronic devices simplified the process in some ways since my one experience, in other ways the journey was much more daunting. College costs have tripled over the past four decades, even adjusted for inflation. Just in the last decade alone, the cost has soared by 25 percent.
I have also watched with a sinking feeling in the pit of my stomach as shell-shocked students — most still in their late teens — stood in the bursar’s office in obvious desperation, having just gotten a bill that they have no ability to pay, with no clue how they are supposed to pay it. Even worse, in many cases these students are on their own with no parents or other support system. In some cases, their parents are in their lives but unwilling to help by even completing the financial aid forms, leaving the students unable to receive aid even if they would otherwise be eligible.
Young people are often overwhelmed, and set adrift with no life raft
There’s a popular meme going around social media that says high schools should have a mandatory class called “Life Skills,” where students would learn how to balance a checkbook, among other things like changing a tire and writing a resume. I love this idea. But given that many kids manage to graduate high school without knowing how to write out a check (let alone balance a checkbook), is it truly realistic to expect them to complete complicated financial aid forms on their own?
Having personally completed many college applications, tuition bills and financial aid documents, I know firsthand just how intimidating and confusing they can be. Just completing the forms to request financial aid can be a major undertaking. The FAFSA has more than 100 questions. Its more thorough counterpart, the CSS Profile, is even more detailed, requiring information about not only the student’s (and parents’) assets and income, but also requiring numbers related to home equity, property value, business profits, alimony and a host of other things the student may not even know about.
The process can be overwhelming long before you face the sticker shock of finding out how much it will cost.
Struggling without support
Personal responsibility and a practical mindset are both critical parts of the process. I wholeheartedly agree. Encouraging young people to be well-informed about the costs of college and their (and their family’s) financial situation as it relates to being able to afford those costs is great, and is an important first step. But what then?
Many people strongly believe that college students need “skin in the game,” and that taking out loans or paying for tuition themselves via some other means makes them more appreciative, and ensures they will work their hardest to succeed. Even if you agree with that philosophy, exactly how much “skin” do they need to provide? Should we require a pound of flesh? Or more? What’s the going rate?
Many schools now have on-campus food banks because so many students are homeless and/or unable to afford food. These young people are already going hungry just to be able to afford their education. How much more can we ask of them?
They say it takes a village to raise a child. It’s a shame that this village seems to abandon them at one of the most critical and challenging points in their life — just when they desperately need support if they want to “launch.” Which is presumably the end goal of this village-wide child raising effort.
Financial literacy is important for college students, and for everyone else. It’s important for young people to be informed about a wide range of money issues so they can make smart financial decisions. But this knowhow cannot work miracles. Even the most money savvy students can only get so far if the system seems designed to throw obstacles in their path at every turn.
Here’s a sad and sobering fact: Uncle Sam has garnished the retirement benefits for many adults who owe student debt. In 2015, the government reduced Social Security checks for a total of 173,000 Americans due to student loans. These are adults who presumably were fairly knowledgeable about debt and finances. If they could run into such severe financial dire straits as a result of student debt, surely people many decades younger and lacking that level of real-world money experience would also find it challenging, especially as they face college costs that continue to soar.
What we can do
How can we help students navigate the process and, ideally, help them thrive at a college they can afford without lifelong debt? There are no quick and easy answers. But there are a few options that might help:
· The push for free public education has picked up considerable steam recently. While critics say it is a pipe dream that we cannot afford, proponents point out that the staggering amount of money the government currently handles in student loans could offset most if not all of that cost. Plus, it’s an investment we as a society make into our next generation’s future.
· Support a wider array of affordable education options. A traditional four-year degree isn’t the right path for everyone. We should do a better job of encouraging young people to consider a range of options, including trade school and programs that focus on hands-on training. And of course we need to help make those programs as affordable as possible, as well.
· Financial literacy programs to help educate young people about major money issues are a valuable tool to helping them make smart choices, so they don’t find themselves in financial trouble without even realizing it.
· Let’s invest in tools, resources and programs that will support our young people, allowing them some financial relief as they pursue their educational journey and whatever path they choose for their passions and careers. Don’t’ force them to bankrupt their future before it even begins just to get a public education that should be accessible to everyone.
We didn’t reach this point of a college affordability crisis overnight, and the solution won’t happen instantly either. But by working together to support our young people without saddling them with the burden of crushing debt, we can help them not only survive, but thrive and succeed, Which in the end benefits all of us.
