Jill On Money: Student loans — Past and present

Jill Schlesinger on Apr 17, 2024

During this period of time, I encourage families to have realistic conversations about the large financial investment that they are about to make.

It is imperative that borrowers, their parents, or their grandparents avoid signing up for a plan that could effectively impoverish them if things go astray.

What could possibly go wrong? You ask. Maybe the student won’t graduate, maybe the post-graduate job market will be lousy, or maybe the graduate will choose a profession with a low starting salary.

After the candid (and yes, difficult) discussions and armed with all of the financial offers in hand, it may be worth having the student contact the college to appeal a decision, especially if something has changed (think: job loss, illness) since the application was submitted.

With all of these hoops, are you wondering if a four-year degree is worth it?

The answer is yes, with a caveat. The data show that college graduates have lower unemployment rates, earn more money over their careers and are able to build a larger net worth over their lifetimes. But if you borrow too much money, those advantages start to narrow.

One last note: The Biden Administration recently rolled out more plans to reduce debt on some outstanding federal student loans, subject to income limits. If the rules stand up to the expected legal actions, they will assist borrowers by potentially canceling the debt of those who:

— Owe more than they did at the start of repayment.

— Are otherwise eligible for loan forgiveness through plans like Saving on a Valuable Education (SAVE) Plan, Public Service Loan Forgiveness, or other programs, but have not yet applied.

— Have had undergraduate debt for more than 20 years and graduate student debt for more than 25.

— Are experiencing hardship paying back their loans.

— Have enrolled in low-financial-value institutions or programs that failed accountability measures.

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(Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at askjill@jillonmoney.com. Check her website at www.jillonmoney.com)