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How to Avoid Excessive College Loans

This WSJ article Which Schools Leave Parents with the Most College Debt 12/3/20 pushes a strong case on why CPC's understanding of the family's EFC and financial parameters before developing a school list is vital. The Department of Education, for the first time, published Parent Plus Loans (vs. student loans) required for funding cost of attendance. Not a shocker, but the article references that parents are taking on more debt than they can afford, particularly since they want the best for their student, and there are minimal credit checks for these parent plus loans (think back to the days of the housing market bust?). Lack of balancing the college list in the fall leaves the family caught flat-footed in the spring and feeling the pressure to take on more debt than they should in the form of Parent Plus loans.

These loans are often tacked onto a student's financial package to "fill the gap" between the net cost of tuition after merit scholarships, need grants, and the amount subsidized or unsubsidized federal student loans. This screenshot below from the article is telling and validates CPC's approach and why we might not include such a school on our preferred list. We look closely at quality, on-time graduation, and students' ability to repay their loans by graduating and obtaining high paying jobs.

According to the article, "Poor and middle-income parents at hundreds of colleges have taken on substantial debt—amounts sometimes more than twice their annual income—to help their children through school, new federal figures show." With advanced planning, we can help parents avoid conflict over financial packages from an unbalanced application list.

Let's use this example:

  • Maryland State of Residence