The Real Cost of Pizza
In almost seven years of assisting families at College Assistance Plus, I am always amazed about how little the average college family (parent(s) and student) understand about the mechanics of the student loan system.
Did you know that all federal student loans are non-collateralized and non-dischargable through bankruptcy? What about the fact that there are almost $830 billion dollars in outstanding federal & private student loans (according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com)? Compared to the sub-prime mortgage issue, this is a much larger financial issue facing the USA.
Much of the risk of outstanding federal student loans comes from the cavalier way in which most families approach the challenge of funding college. I have heard it said often that you can borrow for college but NOT for retirement, so you might as well borrow what you can. While this is factually correct, it hardly addresses the uncertainties of borrowing for college: (1) 50% of college students never graduate; (2) only 20% of graduates obtain “real” employment; and (3) the average college degree now requires 5+ years to obtain.
Not only do you have to deal with the questions of whether it is wise to borrow for college or not, but parents also have to ask themselves what their students are spending their loan money on. Many parents are surprised to learn that their sons or daughters have borrowed against their college loans for weekend party financing, understanding that those loans can be paid back over 20 years.
Add in the interest, and how much is that $10 pizza really going to cost you over the next 20 years? Is it really worth it?
About Paul Celuch
Paul Celuch has 30 plus years of sales and marketing experience with IBM, Burroughs, MCI, and various telecommunications companies. He also operated his own Lanier office products distributorship.
