Note: This is an analysis to some of the answers I’ve received from interviews and surveys. For privacy sake, I have redacted some details by using […] to signify when something was cut out or replaced to promote privacy for the person answering the questions. Rest assured that these answers are from a real person whose life aligns very closely to the subject of this blog.


a perfect illustration of the system that has created the massive student debt crisis


 

Do you recall what they told you about grants and loans?  

I was told how to apply for and how to receive my loans. At that time, we didn’t have entrance or exit counseling and there was not a financial literacy / loan course available at [private college]. You were just encouraged, shown how to apply and how to receive student loans, apply for scholarships, financial aid, etc. I did not pay close enough attention to the large sums of money in loans that were being paid towards my tuition, books, etc and I needed lots of reimbursement to offset my living expenses since I was newly married, moved in to my first home and had a baby my senior year. I ended up with not realizing the extent of how large my loans were till after graduating and accepting my first job.

What was the experience of getting student loans like?  Was it difficult?  Were there lots of disclaimers?  Did they explain what your payment situation was going to be like when you graduated?  Did they discuss what would happen if you dropped out of school without a degree?

The experience of getting a loan at that time was easy. You filled out a few sheets of paper at the office after submitting your FAFSA application that year. You received your reward letter and then your reimbursement. There were not a lot of disclaimers until after I graduated and started receiving payment notices. They did not explain the payment situation after I graduated or what would happen if you dropped out of school without a degree. Part of the students at [private college] come from wealthy families or wealthy [private college] alumni families and their parents pay for their schooling and living expenses so only those minorities that the school accepts due to maintaining minority representation at the school (demographic purposes – low income, other religious faiths, racial, cultural, etc.) take out the big loans and receive full financial aid. [private college] is a private […] university and has strict rules..

Did the grants and loans help pay for your living expenses or was it just for tuition?

Both. Keep in mind that I had no familial support and I was considered an out of state student my first year at [community college].

Analysis: The original analysis from part one of this interview touched on the point that the system didn’t really discuss the benefits of the education.  The student was simply enrolled into whatever they wanted to do and there was no serious and multi-faceted lifestyle outcomes discussion on their chosen career path.  The benefits of the education were simply assumed by the students and those that advised the student.

The second step from that point is paying for the education.  The theme of lack of disclosure continues.  Big beautiful buildings at private universities are simply not inexpensive.  Eating for two to three years is not inexpensive.  Paying the salaries of PhD’s and other educators at private universities is not inexpensive.  The way to pay for all this is through the students, and students who don’t have high paying jobs and who come from families with modest means have limited options for paying for school.  Yes, there are always grants available, but the ease of which loans were fostered on to this student is a perfect illustration of the system that has created the massive student debt crisis that exists today.

In a perfect world this student would have been given a very strong initial overview of their earnings expectations and projections of how their debt load would impact their lifestyle.  These models would regularly be revisited and updated over the course of their time at the school.  As much thought as possible would have been put into learning exercises resulting in having the students truly understand the reality of their situation.  This is a high end university with the best instructional design professionals in the region.  They could easily do this.. Sadly, this is not a perfect world.  There is no way a private university would ever put together such a program as it would undermine a huge chunk of the recruiting efforts of the school as many students would realize the cost benefit of the school was out of balance.

Ivy is inexpensive, the brick the Ivey clings too is not.

I hope to collect more stories like these and analyze them.  If you would like to share your stories, then you can start with our education survey:

https://www.surveymonkey.com/r/3X3BHNH

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Posted by Mike Peluso

Mike Peluso writes is about the collision between between the business / professional world and life. He also writes about the journey involved with the Peluso Presents efforts including the Blog, Books, and Podcast so that others may benefit from his efforts. Read the Blog: www.PelusoPresents.com/ Listen to the Podcast: http://pelusopresents.libsyn.com/ Support the Effort: https://www.patreon.com/pelusopresents

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