How to Afford College

After a lifetime of a free K-12 education, many students and their families are not sure how they can afford college. Those price tags trigger the gag reflex — $30K, $55K, $70K — few people have spare cash in those numbers in their yearly budget. Kids who come from families with no college experience and lower/ lower-middle class families are particularly vulnerable. But I see kids from families in towns, like ours, making expensive mistakes as well.

The fear of the price causes some to miss out on opportunities. Some don’t fill out FAFSA forms and leave Pell Grant money on the table. They under-match, meaning they could be attending a more selective school. They don’t take advantage of the federal loans — a little loan is a good thing. They see people from their community who fail out of school, and it makes them even more nervous about investing in college. It’s possible to be too timid.

Others ignore the price tag and are too aggressive about their higher ed spending. They pay a lot for degrees that could be gotten for much cheaper at the community college. They attend private colleges, and won’t consider the in-state public college.

Graduate degrees are now responsible for 40 percent of the country’s $1.5 trillion student loan debt. Yes, a bunch of it goes to law and medical programs; presumably those students will be able to quickly repay that debt. But there are a whole lot of other masters programs, which don’t lead to huge paychecks — social work, hospital administration, criminal justice.

If a family hasn’t put away enough money in 529 over 17 years to afford a pricy private school and that family makes a dollar over the Pell Grant cut-off, then a public school is really the best option. (I’m assuming that we’re thinking about an average kid, not the student with 1,600 SATs or can run a 4 minute mile.) In some cases, it’s necessary to attend a community college for two-years and then transfer to a four-year college. Take a look at whether you can get to your career goals with an associate degree and skip the BA all together.

I don’t think that previous paragraph is ground breaking. And it’s not a tragedy. Public colleges are great right now. Sure, the kids are a little bit of a number and get an industrial-grade education, but for most kids, it’s fine. And many places, like Wall Street and Silicon Valley, like those public college as much, if not more, than Ivy League students. They have massive alumni base to give kids an edge in the workplace at least for first jobs.

While you and I might say that public schools are fine and good and make college affordable to just about everyone, a lot of people don’t know that. In part, it’s because we have guidance counselor crisis in the country. In Arizona, there are something like 700 students for every guidance counselor. If a student doesn’t get that info from home, then they apply to schools blindly. Young people aren’t capable of understanding money, so they either become too conservative or too aggressive in their higher ed purchases.

Since we’re talking about education reform, better education about college affordability should be on the list.

52 thoughts on “How to Afford College

  1. Laura said,

    “Yes, a bunch of it goes to law and medical programs; presumably those students will be able to quickly repay that debt.”

    Isn’t law school pretty dubious these days?


    1. Not as bad as it was during the depth of the recession, but yes. By and large, to make the big bucks in law, you need to get a job at a relatively large firm. Lots of law grads do, but lots more don’t. This article has a nice summary of the situation:

      The charts are helpful – but IMO the key point is that paying law school tuition anywhere close to the average is only really justified if you have a pretty high likelihood of obtaining a big law firm job. There are a lot less of those than there are students paying tuition as though they will get one.


    2. What I tell young people is that in order to justify going to law school (in addition to the debt, we are talking about three years of your life), you must have a good reason to believe that you are going to be in the top third of your class at a Top 14 law school, or in the top 10 percent anywhere else. So why do you believe that? Saying “The school is giving me a full merit scholarship” is a good answer, since they obviously believe you will be in the top of the class or they wouldn’t be doing that. Saying “I goofed off in college, but I’m going to work hard in law school” is a bad answer, since everyone works harder in law school than they did in college. Saying “My mother’s cancer was a big distraction and really impaired my performance in college, but now she’s dead and I’m ready to move on” (I did hear that once) is probably a good answer–at least the girl who said that to me did really well in law school and has a very good job.


      1. I just don’t understand what is happening to the more retail end of the legal market. People who do divorces for bartenders, defend those accused of DUI, incorporate laundromats, that kind of thing. Because the people I know who do those kinds of things make a reasonable living, especially given cheaper law schools back just a couple decades ago, but salaries for recent graduates doing more prestigious work are so low now, I can’t imagine that the retail-law salaries haven’t dropped even more.


      2. It’s a mix of things at the retail law level. Legal Zoom and similar services are a lot of the things that used to be retail law. Basic incorporations, wills, etc. Another factor is that the people you know have already built a practice. Whether they hung out a shingle, or started working for someone else, once you built a practice you start to get referrals. So that builds on itself.

        Depending on the practice it may be that a solo has a few repeat customers who send regular business – and they take whatever else comes in the door that’s related. Incorporate enough laundromats and one turns into a chain and sends you regular work. Then you take whatever other similar work comes in, and hope some of those turn into big repeat clients. It’s hard to turn those small jobs into a volume business without a regular source of referrals. I don’t know much about criminal or matrimonial practice.

        I agree with y81’s advice and give similar advice when people ask. It does imply however that maybe 80% or law students shouldn’t go. That’s probably high, if new law grads fell by 25 or 50% job prospects would be pretty good for all of them. As it is though, there still seem to be more grads than decent jobs.


      3. It does imply however that maybe 80% or law students shouldn’t go.

        Right. Which is obviously unworkable for the long term, though if it happened for a decade, salaries would shoot up enough that people would start borrowing $200,000 to go again.

        The same thing is clearly going to drive tech salaries to crash again at some point in the not-too-distant future. I think my work is close enough to that sector that it will be affected, but I’m getting old enough that I don’t view it as a personal catastrophe.


  2. I’ll just mix things up. This is a conversation starter, a provocation. There are a few ideas included.

    Student loan debt. The first thing that MUST happen, and could be done by the government TOMORROW would be to make student loan debt dischargeable in bankruptcy. That means that a judge would be able to free people from the sort of student loan debts that function as a debtors’ prison.

    As it seems most student loan debt is in the hands of the government, (my impression from reading about financial stuff), why in the world are we allowing the government to keep people in debtors’ prison constructed of interest due on student debt? The government is often the creditor. If it makes sense for the population to be educated, then the government shouldn’t be practicing usury. Give judges the ability to reduce the amount due to the government to the sum actually lent, rather than the sum lent plus compounded interest.

    (As an aside, it seems many young people are putting off marriage, house purchases, and starting families due to student loan debt. Our whole governmental system depends upon new taxpayers, i.e., children, entering the system. A delay of 10 years to pay back student loan debt means that many of the highest earning professionals, and people living in expensive regions, will never have families.)

    Make every tax refund apply automatically to outstanding student loan debt, until the debt is paid off. And do away with the unreasonable collection fees on paying back debt. It is apparently better to have the government seize your tax refund to repay defaulted student loans than to attempt to pay them off directly, due to the collection fees paid to collection agencies. See:

    This is getting long. Second comment will follow.


  3. Now to the provocative part. I realize that after the Flexner Report, it became accepted wisdom that the best way to educate young adults is for them to be taught by experts in various fields, engaged in serious research.

    However! That means that education is not professors’ primary focus, by definition. All well and good when the college students were from wealthy families who could afford years of polishing without producing income. Once the vast majority of the students come from families who are taking on debt for the experience, the old model becomes unsustainable.

    I’ve heard or read that some 70-80% of college instruction is now in the hands of adjuncts. Thus, to simplify, the majority of students are being taught by specialists in education. However, they are required to pay fees to support the colleges’ vast research apparatus. Well and good if they were all being taught by tenure track professors. After all, someone who has a good chance of curing cancer has other things she could be doing.

    However, charging students as if they were being taught by researchers, while they are being taught by people who are not researchers, makes students into cash cows for the colleges.

    And really, the college students of the 1910s were the equivalents of the graduate students of today. Is there really a need for college instructors to be researchers? The actual practices of many universities give the answer. (And my impression is that high school teachers are in much better financial shape than many college adjuncts, because the public high school system does not require high school teachers to devote the majority of their time to other things.)

    Decouple college education from research. It has already happened.


    1. The vast research apparatus is the cash cow at the big research schools. At my former employer, research funding was getting close to a billion. It doesn’t just keep the university strong, it’s how the city stays inhabited.


      1. There are large numbers of schools with no research at all, if that’s what people want. It doesn’t seem to be the growing trend.


  4. I don’t think tax refunds should be garnished for loans. It 1) punishes those who happen to not adjust their withholding and actually may need the money 2) only incentivizes under withholding. 3) has nothing to do with actual income/how much someone makes and could afford.


    1. Borrowing from the federal government is not like borrowing from a private lender.

      Apparently, tax refunds can be garnished for federal student loans that are in default. If loans are in default (not paid for 270 days), the entire loan amount is immediately due.

      According to the aei event podcast, borrowers whose tax refunds are garnished come out ahead of delinquent borrowers in default who try to pay the loans without garnishment, as the garnishment does not include the collection fees of, iirc, 25%.

      Consequences of defaulting:

      The consequences, which can be severe, include the following:

      The entire unpaid balance of your loan and any interest you owe becomes immediately due (this is called “acceleration”).
      You can no longer receive deferment or forbearance, and you lose eligibility for other benefits, such as the ability to choose a repayment plan.
      You will lose eligibility for additional federal student aid.
      The default will be reported to credit bureaus, damaging your credit rating and affecting your ability to buy a car or house or to get a credit card.
      Your tax refunds and federal benefit payments may be withheld and applied toward repayment of your defaulted loan (this is called “Treasury offset”).
      Your wages will be garnished. This means your employer may be required to withhold a portion of your pay and send it to your loan holder to repay your defaulted loan.
      Your loan holder can take you to court.
      You may not be able to purchase or sell assets such as real estate.
      You may be charged court costs, collection fees, attorney’s fees, and other costs associated with the collection process.
      It may take years to reestablish a good credit record.
      Your school may withhold your academic transcript until your defaulted student loan is satisfied. The academic transcript is the property of the school, and it is the school’s decision—not the U.S. Department of Education’s or your loan holder’s—whether to release the transcript to you.

      It would be a drastic measure, certainly. But it could be regarded as a form of forced savings, such as penalizing early withdrawals from retirement funds.

      The AEI event speakers pointed out that private industry (such as credit card lenders) often cut deals to settle outstanding loans, getting what they can. They make allowances for bad debts. When student loans are non-dischargeable, there’s no need for the lenders to do that. The federal government has offered different repayment plans, but defaulting makes the borrower ineligible for such plans.


    1. I’ve done a couple of article about first gen kids and getting them ready for college. Most aren’t getting this kind of info in their high schools and have no idea of how to find out.


  5. I just don’t know what to say to statements like that. I was a first generation to attend college and I found all this in the library without Google. And my high school guidance counselor was an asshole who actively discouraged me from going to college. Nobody told me, I just looked. Why is it they (the students) don’t feel able to just go look? Google how to afford college and these things come up. So, what’s going on?

    I also think there’s been a change in how girls seem more afraid of making a scene, or standing out. My friends and I had pins that said well behaved women don’t make history.


    1. It was probably the pins. Or maybe that the portion of economic growth captured by the wealthy has kept salary growth so low that it has greatly reduced the margin of error for kids starting out.


      1. “Or maybe that the portion of economic growth captured by the wealthy has kept salary growth so low that it has greatly reduced the margin of error for kids starting out.”

        Part of the lack of margin of error is caused by college costs.

        The more expensive it is, the more important it is to get things exactly right.


  6. If Dr. Phil doesn’t even know that Slippery Rock is a real university, maybe the kids don’t know either.


  7. I think that (i) the stated cost of college has risen dramatically, much more than inflation or average personal income or almost anything else and (ii) college aid has gotten more opaque–it’s like buying a car used to be, before the internet dramatically increased price transparency in that area. These factors, more than stagnant income growth, have made selecting and paying for college a more perilous enterprise.


    1. The cost of college has risen, which isn’t an exogenous variable. For the most part over the past several decades, wages and opportunities for non-college jobs have been worse than those for college ones. This has increased the demand for college, which has lead to higher costs. It’s all good to say that people are getting degrees they don’t need, but if the alternative is virtual certainty of making hundreds of thousands less over a lifetime, gambling four years and $100k in loans can seem like a better plan.


    2. But Laura is saying they don’t know where to look or how to start – why don’t they know how to start?
      Yes, the cost of college has risen dramatically. There has also been increases in the number of programs available to help. But she says they don’t even know where to look – why not? Why are they so helpless?


      1. I think it is at least in part because people with skills and talents that wouldn’t have been seen as suited for college are now looking at college because the other options look worse. They aren’t as good at looking for information in written sources because that’s not where their talents lie.


    1. It’s much easier to build a cell tower than to build a working university. Skilled labor, which is one way to characterize faculty, takes a long time to train.


  8. Yeah, they don’t know where to start. I don’t even know where to start in explaining what they don’t know.

    Alright, let’s just talk about the FAFSA form. it’s the main way that low income kids get access to Pell Grants and colleges determine financial aid for students. Students don’t know how to fill out the forms. Maybe their parents don’t speak great English. Maybe they make money under the table. Maybe it’s just the form itself that freaks them out. One study (I’ll find the link later) found that something 1/3 of the students who would qualify for Pell Grants don’t even apply, because they can’t figure out the FAFSA form. So, some schools are now hosting FAFSA nights where they walk parents through the forms. They fill them out there at the schools with counselors holding their hands.

    Some students don’t know the difference between two year colleges and four year colleges. They can’t fill out community college applications. They never heard of the names of decent, less competitive public colleges that would be just right for them. God, so much.

    Some students don’t know a single person in their community who has graduated from a four year college. They’re intimidated of talking to authority people to ask for help. They don’t know who to ask for help.

    I did an article on one school in Manhattan that spends six years getting the kids up to speed with stuff that comes naturally to us. I learned tons of stuff that didn’t make it into that article. I can share more, if you like.


  9. This doesn’t explain why they are afraid to just Google. They can find things out without talking to an authority figure. But fine, that’s one population.

    It sounds from the things you have written that the students in your town also are not willing to use Google. They seem clueless about anything but loans, they borrow huge amounts and then they don’t know about programs to help them pay them back. Why are they so helpless?


    1. Google is so clogged with nonsense and ads for frauds that I suspect the most uninformed students are using google. Research is a skill and the internet has had the effect of making those not very experienced with research more uninformed than they might have been otherwise. Like the elderly falling for so much nonsense on Facebook.


  10. Lots of reasons for why they take out all those loans in the first place:

    One, they are teenagers without full brain development. They have never spent more than $20 on a movie ticket, so can’t wrap their brains around the tens of thousands that college costs. To them, it’s Monopoly money.

    Two, they’ve been told over and over that they have to go to a “good” college. There is a lot of stigma around community colleges, which are an excellent way to keep costs down. They haven’t been told that they can shop around, and there are better options.

    Third, it’s too easy to take out loans for what seems like Monopoly money, and they don’t think what’s waiting for them when they graduate. Hell, I know PhD grad students who were shocked by the final loan amounts at graduation. Like bawling in the financial aid office right before graduation.

    Fourth, the parents aren’t holding them back because they want their kids to have the same options as the rich kids. They feel bad saying “no.”

    There are more reasons, but those are the biggies.

    Why don’t they know about loan consolidation and programs that can help them repay their loans? I haven’t talked with students specifically about that question, but I suspect that half of them eventually find out about those options. Maybe those programs aren’t great. We consolidated our loans when we got out grad school. That helped a bit, but we still had to pay back all that money. It took YEARS. I also know some fellow grad students who just sucked a real life stuff like money and never took those steps to make the process less painful.


    1. 1-3 don’t hold up. No matter what you say, the data shows the majority of students are not borrowing the huge sums you cite. They just aren’t, especially at the undergrad level. Even for people pursuing PhDs, the majority DO NOT borrow $100K or more. The students that aren’t borrowing that much also have underdeveloped brains, they have also been told they must go to a good school, but they didn’t borrow huge sums. So why did these?

      And any student who didn’t know the total they borrowed DIDN’T WANT to know. I had student loans. I’ve seen the statements. Every time funds were disbursed, it listed the total borrowed, it listed the interest rates, it listed the deferred interest. Anyone saying they didn’t know, couldn’t know is lying to you. They may also be lying to themselves, but they are lying.


      1. It’s not impossible that you are an exception rather than the normal standard to which everyone else should be held. Why are you so intent on blaming people for not accomplishing what you did instead of believing them when they say there were barriers and then reducing the barriers?


    2. Laura wrote,

      “Fourth, the parents aren’t holding them back because they want their kids to have the same options as the rich kids. They feel bad saying “no.””

      See: every middle class parent featured in an article whose kid should not have gone to NYU.


  11. We weren’t talking about why or whether students take out huge loans. We were talking about what students don’t know about college and money. I was talking in general about their confusion.

    Sometimes the problem is that they apply to colleges, but only apply to expensive colleges. They can’t afford it, so they don’t go at all (that’s not a middle class problem, but a lower/lower middle class problem). Sometimes the problem is that they under match, meaning that the price tag is so scary that they go to community colleges, when they might have gotten a free ride at a really good college. (Lots of research on the problem of “under matching.”)

    And PhD students do take out significant loans. Maybe not a majority, but big numbers. 22 percent of education Phds have more than 70K of student loans.

    I have friends who left with six figures of loans from my PhD program. They may be outliers, but they are still human beings and not just dots on a spreadsheet.

    I thought I was just talking about the confusion behind the college process.


  12. I agree with Laura on (at least) one point under discussion: many people, even well-educated ones, find the financial aid process, and the haggling and shopping it requires, both difficult and repellent. So it’s likely that they navigate it poorly. Here is an example of an educated woman (she has a graduate degree) in that situation. And closer to home, I recall Prof. Brighouse stating confidently that no middle-class person pays full tuition, only to be indignantly corrected by Wendy. So if people that smart and educated are confused, why is it surprising that so many other people are?


  13. I think student loans are one of those issues where the differences among affected populations is vast. Laura’s immediate environment contains a certain kind of student and family, living in an expensive area, but with aspirations for their children that feel like a norm, and are becoming more normalized with exposure to other lives (i.e. social media, etc.). These families are also hyperaware of what they see as a winner-take-all world. That’s my environment, too.

    These families have always been able to say yes to most of their children’s wants (summer camps, 100 dollar jeans and shoes, club sports, . . . .) because 100’s and maybe even 1000’s of dollars are well within the budget). $100,000, though, is a different number and a different budget. But, it’s not surprising that the 17 year old children don’t see that it should be a no and that even that the parents fail to see the economic reality. Especially true when the parents themselves had access because their parents were able to give it to them, or because college cost relatively less, or because they were in the cusp that received the aid they needed.


  14. On the other end of the spectrum, we have the poor kids taking out loans to attend school for what they hope will be an economically valuable degree (ranging from chef to hairdresser to education degrees, including in administration, law degrees, . . . .). Sometimes they have been aggressively, and directly sold a lemon (by the education dealer). Sometimes they have heard just what they want to hear. Sometimes they can’t do the work that would actually make the degree useful. Sometimes they have no other choices.

    Those two groups flawed investments in education have different causes and potentially different solutions. And they aren’t the only groups.


    1. bj said,

      “Those two groups flawed investments in education have different causes and potentially different solutions. And they aren’t the only groups.”

      Yes. There’s also student loans as DIY welfare during hard times, student loans taken out on purpose to support family, student loans taken out fraudulently by parents without telling kids, etc.


      1. Student loans stole by colleges, as happened with Argosy when they were perceptiously closed earlier this year.


      2. And, I’ll note, that expecting 17 year olds to protect themselves from all of these flaws in the student loan market was and will continue to be a disaster.


      3. bj said,

        “And, I’ll note, that expecting 17 year olds to protect themselves from all of these flaws in the student loan market was and will continue to be a disaster.”

        Right. And it’s not really fair to ask of an 18-year-old, either.


  15. “I was a first generation to attend college and I found all this in the library without Google. ”

    This brings up the Atlantic article on definitions of fairness:

    I don’t know that I would put this different beliefs about fairness on a conservative/liberal spectrum, but I do think that people have differing beliefs about fairness.

    I wasn’t a first gen, but I was a woman/person of color who spent a lot of time in spaces in which I was an only. A group of us at my undergraduate school (34 women graduated in my class) recently had a FB conversation in which we realized that we had found individual solutions for our environment for ourselves. Looking back, though, we wished that we had built a community and tried to help find more collective solutions as well as provided support for others who struggled on their own. We were all, to quote an article written almost 20 years later about a group of women at the same school, “fiercely courageous”. Now, we realize that shouldn’t continue to be a requirement to do what we had done.


  16. Oh FFS, expecting a 17 or 18 yr old to type “How do I afford college” into a Google search box is not expecting them to be “fiercely courageous”!


    1. I wonder what happens if you do type that as a person with a typical 17-year-old search history?

      What does the first page of hits look like?


      1. There are three Chipotle within a short walk from my office.

        My point isn’t that nobody can Google things, but that having to rely solely on googling things, instead of actual help from a person who knows things, will lead to much higher chances of failure.


      2. MH said,

        “There are three Chipotle within a short walk from my office. My point isn’t that nobody can Google things, but that having to rely solely on googling things, instead of actual help from a person who knows things, will lead to much higher chances of failure.”

        Nah, I’m serious.

        What if the first page of results for “How do I afford college?” for a person with a 17-year-old’s internet history is mostly scammy stuff or unhelpful content mill stuff? I also imagine that you might get a bunch of military recruiting ads.

        It’s worth doing as an experiment.

        I don’t know if it’s sellable as an article, but the question of, how do inexperienced kids or families acquire information (or “information”) is an interesting one.

        Laura, are there any surveys of college knowledge?


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