College, Family, Student Loans
June 18, 2020
Now that some colleges have begun to announce that they will continue to keep campus closed this fall and deliver classes only online, families with college students are rightfully wondering what to do.
Deciding what is best for your student and your family is highly personal. I have some thoughts that might help you work through the decision.
I want to be clear that the value of college has not changed. The long-term benefit is clear. A study from the Federal Reserve shows that a household with at least one college graduate earns, on average and over decades, about 100% more than a household without a college degree.
The question is how best to proceed.
Here are some questions to help you work through your decision:
How much do you need in-person classes and labs? Let’s start with the academic angle. After this past spring semester, what did you learn about your capacity and interest in on-line learning? If you found it dull, hard to concentrate, and you couldn’t fully engage in lectures through a screen, that’s some important learning you did---about yourself.
If you are pursuing a degree that involves lab work, how was that/will that be impacted?
There is no easy, one-size-fits-all answer for how to proceed. But as a first step, you should think hard about whether you are a good candidate for on-line learning.
Will you be a freshman? If you will be entering college in the fall, it might make sense to wait a year if you are eager to have an on-campus experience. That said, taking a gap year is not to be a vacation. Make it a priority to find some work/volunteer work or projects that keep you engaged and busy.
Will you be a senior? If you are eager to get your degree, then that’s an argument for staying enrolled come this fall, given how close you are to graduating. I don’t have to tell you how frustrating it will be to lose out on all the valuable parts of college that have nothing to do with classes: the friendships, the gatherings, and yes, the parties. The coronavirus crisis is causing us all to reassess and make new choices based on tradeoffs that work for us. This is yours to make.
Is the tuition cost still a value (and affordable) to you? Most colleges that have switched classes from campus to on-line have yet to reduce their tuition. Assuming you will be “attending” school from your family home, you won’t have room and board and other fees to pay, but that tuition bill needs to be carefully considered.
If your family’s income has taken a hit due to the crisis, you need to work as a family to decide how to proceed.
The first step is to contact your school’s financial aid office and ask them how to apply for more/new aid given your family’s loss of income.
If you have any parents who have lost a job, they are not to use a penny of savings for your tuition. If your parents don’t yet have an eight-month emergency fund, they are not to use a penny of their savings for your tuition. I understand that they may have helped over the past few years. That’s irrelevant. You need to help them stand in their truth of their financial life right now.
Some good news is that federal student loans for the coming academic year will have the lowest interest rates ever. Paying a fixed rate of 2.75% for a federal loan is a seriously good investment in your future. And I want to clear up a common mistake: every household is eligible for federal student loans. There is no income test. That said, your family needs to fill out the FAFSA form to apply for federal aid. Your school’s financial aid office can help guide you on the process.
How much do you value being on campus? We all know that there is plenty of learning and growing that happens outside the classroom. For those who attend college in person (vs. on-line) it’s not just where you learn, it’s where you grow into an adult and form lasting bonds with classmates and faculty. That’s obviously trickier in the on-line model. And cost becomes more of a consideration: If you’re missing out on those social aspects of college, does a school with a less expensive tuition make more sense?
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