This chapter essentially goes over the total amount of loan debt students have accumulated throughout their years in school, which has now passed the 1 trillion dollars mark. Questions/discussion topics:
I feel as if Selingo is always pointing fingers at somebody but then he is a little bit hypocritical as he switches the blame. To explain, I guess I first have to say that I was a bit offended when Selingo called financial aid offices “another cog in the wheel” in the anecdote where he describes a high school student speaking with his counselor about the financial aid that is offered in the colleges. There was a question that the mother of the student asked that boggles my mind. She asked why the schools factor in loans as part of the offered financial aid instead of asking how much the parents are willing to contribute to the tuition payments. Selingo then makes it seem that the schools are almost forcing the loans on the students which I don’t believe it is true. Working as a financial aid representative, one thing I can say is that loans are “factored” in the package deal presented to students only because technically loans fall under the term “financial aid” which is offered. As for the offices that don’t “explain” things well enough for students, it’s not as if the students nor the parents don’t know that they are taking out loans. In fact, at this point in the story, Selingo introduces another student who he claims, like most others, is delusion and her judgement is clouded, unable to let the reality of taking on future debt sink in until it is too late and the only thing left for most students to do is to complain and file unsuccessful lawsuits. This is why I found him to be hypocritical almost. That said, who do you think is primarily at fault for the trillion dollar problem-the schools or the students for taking out those loans?
My second question of interest would be about financial aid offices. Selingo does not (or barely) discuss improvements that financial aid officials should make to improve student satisfaction. A biased part of me believes that it is because no evident changes can be made and that the problem is not at the offices. I feel that Selingo puts financial aid offices at such a bad light (maybe this is true for most of the schools, I guess but I really don’t like his sassy tone) that it almost seems like financial aid offices are the ones at fault for enticing students to take out loans when rather, students and parents are provided enough information to start with, and the offices are only informing them of all of their options, which includes loans. Students these days, and I know from direct experience with them, are taking out loans as if they are grants not to be paid back. There was a great anecdote in the chapter where a student could not afford to pay the deposit fee and the college had to advise the delusional mother that if the family could not even afford the deposit fee, how could they possibly afford to pay tuition or the loans back? If students don’t have the money now, what makes them think that they would have the money for repayment 6 months after they graduate with a bachelors degree? Cutting to the chase, my question is on what improvements should be made (if needed) to the financial aid offices at schools?
My third question is how do you think we should go about reducing the trillion dollar loan debt? Selingo does suggest that schools limit the amount of loans students can take out but as far as I know, at Brooklyn College, even if there is a limit to loans (and there is) students would still take out more alternative loans from private companies like banks to pay for tuition instead (and there is no limit to those, I think). Since alternative loans typically have a high interest rate, the students end up having to pay back more. In this case, the capping of federal loans as Selingo suggests is not a good solution. What do you think we should do to reduce the loan debt?
There is a section in the chapter about a hypothesis that was proposed to explain why tuition has been increasing. Basically, tuition is increasing because federal financial aid is increasing, driving the colleges to increase the tuition. However, one can argue that the amount of aid has been increasing because the tuition has been increasing (so the other way around). It is basically a vicious cycle that has no end in sight. What do you think we should do about it?
The last thing I have on my mind for this chapter has to deal with the delusional thinking Selingo is saying most students have towards loans and future debt. Paying for college is obviously an investment and taking out loans is really no different than paying with a credit card. My question is this: why do you think some students are “delusional” towards accepting the fact that they would have to go into deep debt for their college degree? Do you think it is because colleges tend to “distract” the students from this reality or could it be because of the student’s pride? Or maybe it is because taking out loans and paying off student loan debt is now considered part of the “essential” college experience along with dorming, a rite of passage, that students long for?
– Lindie
