The New York Times ran an article in which student loan borrowers explained what they wish they had known before taking on debt.
Federal law makes debt counseling mandatory for first-time borrowers, but “because the topic is dense and the department’s content is devoid of anecdotes, it’s tough to make the lessons stick”. Most colleges use the Department of Education’s online counseling module, which apparently most students find difficult to navigate and comprehend. What type of counseling would work to make students clearly realize what they were getting themselves into before it was too late?
The ideas from the article seem helpful, but some of them, like requiring a course during the first year of college, are only applicable after the money has been borrowed. Plus that recommendation seems to be overkill and costly.
- Delivering supplemental counseling, ideally in a face-to-face setting, in order to help answer questions
- Providing sample budget sheets using local cost-of-living expenses
Ultimately, it is the student’s responsibility to take the time to fully understand the implications of college debt. Maybe students who borrow should have to pass a pre-entrance exam that covers practical knowledge about how loans will affect their personal financial situation.