In a lawsuit fluke, a judge ruled that 800,000 students should have their student debt canceled. Researchers took the opportunity to compare outcomes of students with canceled debt to students who did not have their debt canceled.
Canceled debt improved student outcomes in all sorts of unexpected ways. More of them got married and had kids, for example. They earned 12% more than their indebted peers because without debt the students could take risks –– they could relocate, change jobs to improve their career, protect their credit score.
I understand the benefits of graduating without student loans. But I decided there was no way I could save enough money to pay for my kids to go to college. And since I couldn’t save enough, I didn’t believe most parents in my generation could save enough either. It felt like a safe decision.
But now there are hard choices. I had to tell my kids if they can’t get a full scholarship they have to go to a really cheap school. They might have to work their way through school.
And I started telling my kids really early on that they have to get a full scholarship.I thought that would make it easier. But now we’re applying and it’s not feeling easier.
Ivy Leagues and other private schools will calculate how much money you and your parents have. Including the value of your step-parent’s second home or your non-custodial parent’s sixth car even if it’s leased in their brother’s name –– it’s a very thorough questionnaire. And the school will determine how much is reasonable for your family to contribute. The school will cover the rest. For Harvard, for example, if your family earns less than $65K a year they probably won’t have to cover any tuition.
It’s a very fair system that is set up to attract low-income kids to a group of schools that typically attracts kids from families in the top 1%. I’m not saying the whole college system is fair. Believe me. It’s not. But the Ivy League financial aid system is pretty fair.
If your parents can’t pay what the Ivy League thinks is fair then the best situation you can hope for is a merit-based scholarship. But those scholarships aren’t that common at top schools. Top schools can attract top students without giving merit scholarships. So for the kids who need more help than the financial aid office thinks they should, this means they have to go to a school that is not the best they can get into.
And if you can’t do either of those things –– and let’s face it, both those things are hard to do –– then you are going to have to take out a loan.
My older son in particular didn’t realize how much pressure he was under to perform well on tests. Because when he was 13 or 14, I didn’t tell him how high he’d have to score to get in at a great school. I kind of assumed he wouldn’t score that high, so I didn’t really introduce the possibility of a great school.
But then his scores came back high. And other people started telling me he should go to a great school. I was sort of devastated, really. I had to tell him that he has to get a scholarship. I had to tell him he might have to take out loans. I had to tell him how much easier it is for kids who can just pay.
He’s still applying. So now we are waiting and hoping.