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

  • A/B Student with above-average SATs but not in the 1300+ range

  • Parents can contribute about $20,000 a year, but their Expected Family Contribution as defined by the FAFSA is much higher so need grants aren’t in the picture

  • State Flagship School – University of Maryland – an unlikely admit due to selectivity

  • Preferred major not part of the Academic Common Market so can’t use that tool

  • Student does not want a regional school, wants to spread her wings a bit

With proper planning, we can help a student develop a balanced application list of quality schools as rated by their on-time graduation rates, investment in academics, and data on helping students procure high paying jobs after graduation.

So why doesn’t every family with this scenario jump at the chance? There is a long runway needed for students to consider options that aren’t part of the mainstream, even if those options are high-quality schools well known for great student experiences but not well known by their peers. From the map below, you will notice that most of these schools are not in high-cost urban areas. These schools can also lean a bit more to the mid-west, fly-over-part of the country. They hold excellent opportunities for your student to engage in high-quality learning, break out of the traditional mold, and learn to stand on their own two feet. We help students get there by discussing these topics early in the college dialogue and reinforcing the purpose of college and how to roam the country. Check out this list of quality private schools, generous with scholarships for A and B students and the average net price after merit scholarships is $40,000 or less.



Let's discuss a strategy here- schedule a no-obligation chat.

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