Kohle Nixon, Ohio University '09, B.A., specialized studies. currently in $67,000 of school debt.
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Every little bit helps. But it's the bigger issues of which school students should attend and what they should major in that are much more difficult to address. Nanette DiLauro, who succeeded Rabil as Barnard's director of financial aid, recalls one student who wanted to go to Barnard--where the sticker price, including fees and housing, is $55,566 per year--so much that she begged the school to certify her private loans. The student, whose parents weren't willing to contribute, would have had to borrow $140,000. "That was a crazy amount," says DiLauro, who gave counsel with a candor that is perhaps all too rare. "I advised the daughter not to do it." The student ultimately chose to go somewhere else.
It's hard to tell teenagers to pass up their dream school and harder still to get them to make a serious effort to map out their future. Bob Giannino-Racine, CEO of ACCESS, a Massachusetts-based nonprofit that gives free financial-aid advice to students, counsels high schoolers to think about the long term. "If you have $50,000 or more in debt from undergrad, you will have a hard time paying for graduate school," he says. That might be helpful for aspiring bankers and lawyers to know. But what about the kids who can't see that far down the road?
Kantrowitz advises setting an undergraduate debt ceiling of $45,000 as a safe burden for someone who plans to earn a degree in engineering, computer science or business. He suggests lowering that cap to $35,000 for a student likely to choose a liberal-arts major. But he and other experts warn that the lesson is not to forgo college. It's, Don't go overboard. College grads still have roughly half the unemployment rate of those without degrees, and their median earnings are about $21,900 more per year, which translates into almost $1 million more over a lifetime.
Students also need to make smarter choices. Too many are committing to expensive schools or completing lengthier programs than they need to. Bill Symonds, director of the Harvard-based Pathways to Prosperity Project, worries that many policy advisers are fanning the college-for-all flames when vocational training or a two-year associate's degree would be a better fit. "If you go to a four-year college and get a degree and can't use it in the labor market, you're not getting much of a return on that investment," he says.
It's advice current debt holders wish they had heard earlier. Jeri Leigh McDowell graduated third in her high school class in 2006 and passed up a free ride to the University of Texas to accept a spot at New Orleans' more illustrious Tulane University, which offered her a $22,000 scholarship. How she would come up with the rest of the $53,000-a-year tab for tuition and living expenses was a problem for another day. The anthropology and history major skated through Tulane in 3 years, but she now struggles to pay back the $90,000 she owes.
The teaching job she thought she had found last October never materialized. Today McDowell lives with her mother in Burleson, Texas, while dodging calls from a collection agency. She works a $9.50-an-hour job at a hotel. "I wish to God I had gone to the state school," she says. "Everyone at my high school was super impressed when I got into Tulane, and I thought it would open doors. I was an idiot."