student loan debt

How much college debt is too much college debt?  The New York Times recently reported that the average loan indebtedness for the class of 2011 increased 5 percent to $26,500 — the previous year’s figure was $25,350.  We asked our College Coach finance experts to weigh in.  Here’s what a few of them had to say…

Laurie Peltier:  It appears that the average student loan debt is creeping towards the maximum four year undergraduate loan debt of $27,000.  That would mean, on average, undergraduate loan borrowers are choosing to borrow the maximum loan amount per year.  These debt levels would require a monthly payment of $305.00 per month if the student chooses the ten year standard repayment plan.  It is unclear whether students are borrowing the maximum because they can or because they have to meet the cost of college.  With the rising price of college it is more likely these loans are being borrowed in an attempt to meet these high prices.

Carl Buck:  While the average student-loan debt has increased 5 percent over the previous year, according to the Institute for College Access and Success’s Project on Student Debt, the real danger is the “Family College Loan” debt burden. When you combine a student’s loan with a PLUS loan, you now have a “Family Loan.” And that troubles me. PLUS loans are growing exponentially, even with stricter guidelines for approval.  Parents will do whatever it takes to support their child’s dream school, and that includes borrowing “whatever it takes.” Colleges need to be transparent with families on the full cost of borrowing over four to five years. Caution, you are about to enter into the world of debt!

Robyn Stewart:  If you are concerned about the debt your child may be taking on to finance a college education we suggest you always maximize federal loan opportunities first, before looking at other educational loan options. Additionally, asking about a school’s average student loan indebtedness (over the course of a student’s four to five years) is a great question for the financial aid office prior to enrolling at a college.

Robert Weinerman:  Remember, borrowing is a choice. If you think about how much your college will cost before you agree to enroll there, you may be able to graduate with much less debt than the averages reported in this article.  In general, colleges think that paying for an undergraduate education is primarily a parental responsibility. If you as a parent cannot pay, or choose not to pay, for your child’s education, you can always help your child choose an education for which he can pay with minimal debt. Few undergraduates can borrow the whole cost of their education without an adult co-signing some of their loans. If you don’t want your child to be deeply indebted, make it clear before she goes to school that you won’t back her borrowing.


Written by Zaragoza Guerra
Zaragoza Guerra is a member of College Coach’s team of college admissions consultants. Zaragoza previously worked as a senior admissions officer at MIT, Caltech, and The Boston Conservatory. Visit our website to learn more about Zaragoza Guerra.