Higher Education – Potential Financial Disaster for Students?

Last week, Kathy Kristof, writing for Forbes Magazine, offered one of the more honest looks at the cost of college today and the subsequent impact of those costs on our young people. In The Great College Hoax, Kristof notes that “higher education can be a financial disaster” for students “especially with the return on degrees down and student loan sharks on the prowl.”

As but one sampling of the current situation:

“The proportion of students who graduate with more than $40,000 in debt jumped sixfold during that period, to 7.7% of the 1 million grads in 2004, or 77,500 people. Most will struggle for more than a decade to work it off, assuming relatively low 6.8% interest rates, the Project on Student Debt says.”

In such an environment, it is critical that those seeking the dream of higher education have their eyes open. Unfortunately, the current lending practices and predatory marketing have benefited from students who lack the basic financial literacy skills to understand that the system is essentially taking them for a ride.

Under such prevailing market conditions, we call our readers attention to our sister site, GoCollege.com, where college students have access to a wealth of information related to the entire college finance process. GoCollege, helping students succeed in college since 1997, recently created a free primer, The Student’s Guide to Personal Finance, designed to provide students some of the financial literacy basics.

As our sister site notes, everywhere one turns these days we are exposed to yet another appalling story of college student debt. Because of those tales, it is imperative that our young people, already facing an uphill battle to establish their working future, not saddle themselves with debt-levels that essentially mortgage their entire future away.

And for a specific lesson as to how students can in fact manage their debt level while in school, The Digital Student Blog at GoCollege offers a Q & A with Kai Davis, a University of Oregon senior about to graduate this spring with zero debt.

Kirstoff notes that “Higher education can be a financial disaster” for students. But it need not be. Educated with the proper information, our young people can avoid mortgaging their entire financial future as they pursue their dream of a college education.