Indebted: A Cautionary Tale
If you want a peek at the Other Side of paying back student loans, have I got a book for you!
Indebted: How Families Make College Work at Any Cost by Caitlin Zaloom piqued my interest last year while researching ways to AVOID as much college loan debt as possible. It doesn’t touch that, but it follows 160 families through their decisions on which college to attend and the impact of indebtedness on students and parents alike. After all, Dr. Zaloom is a cultural anthropologist at New York University or N.Y.U.
In The New Yorker article dated 9/12/2019, author Hua Hsu writes about this phenomenon and the book’s cultural anthropology quest. I have lifted portions of this article to share with you. Below each quote, see my response under the title, MYTHBUSTER.
“Zaloom considers how the challenge of paying for college has become one of the organizing forces of middle-class family life. She and her team conducted interviews with a hundred and sixty families across the country, all of whom make too much to qualify for Pell Grants (reserved for households that earn below fifty thousand dollars) but too little to pay for tuition outright….Part of Zaloom’s fascination with middle-class families is the larger cultural assumption that they ought to be able to afford higher education.”
MYTH BUSTER #1 - Hsu nails this dangerous cultural imperative of we “ought” to be able to pay for college. How does that make sense any more when college costs have far outstripped the average families’ income? The best thing you can do for your student and family is to be real about the money situation. If you can help your student pay for college, do so. Even better, help your student find the best, most creative way to get where they want to go at the best possible price! Parents should NOT dump their 401(k)'s or borrow against their home to finance their students' college wishes. Remember what the authors of the Motley Fool said- “There are no scholarships for retirement”.
“These days, paying for college poses another potential for crisis. The “Indebted” are thoughtful and restrained, like the generically respectable characters conjured during a Presidential debate. Zaloom follows them as they contemplate savings plans, apply for financial aid, and then strategize about how to cover the difference. Parents and children alike talk about how educational debt hangs over their futures, impinging on both daily choices and long-term ambitions.” (Italics and bold added for emphasis).
MYTH BUSTER #2 - Over-sized college loans can be a big black hole. I like the astronomy definition of a black hole; a region of space having a gravitational field so intense that no matter or radiation can escape. The loan payment comes every month, regardless of employment status. Ask the 31 million former students who have loans but no college degree. They are paying off a loan with nothing to show for it. For some students, they may be paying off their college loans while their children are borrowing for their education! Unreal!
“Zaloom argues that the financial-aid process encourages families to ‘maintain silence about the challenges they face in sending their children to college.’ Sometimes, during her interviews, parents would ask Zaloom not to disclose the details of their finances to their children…at times the families sounded as though they were in denial.”
MYTH BUSTER #3 - I may step on some toes here, so apologies right upfront. How can we expect our students to learn financial responsibility if they don’t learn the basics from us? I do NOT think you show them your paycheck- instead, show them the bills. Show them the mortgage/rent bill, the electric bill, the heating bill, the CELL PHONE bill. etc. I started doing that in my daughter’s Junior year in high school. She was most surprised, and, it helped her be more thoughtful about all things money.
“For Zaloom’s families, the specter of debt impedes the children’s transition towards self-sufficiency. One of her subjects is Clarice, an N.Y.U. undergraduate who grew up near Buffalo. Clarice’s mother, a social worker, and her stepfather, a retired military man, had to take on substantial debt to cover thirty-six thousand dollars ($36,000) they owed on her first year, despite her large merit scholarship. For the remaining three years, Clarice took out loans in her name totaling around sixty thousand dollars ($60,000) Her mother recalled a conversation they had when deciding on colleges. “ You’re making decisions today, Clarice that are going to affect your whole life.”
MYTH BUSTER #4 Exactly. Even our most level-headed students are unable to understand the impacts of their college loans on their financial futures. When a pandemic hits, they may need to come home and live in your basement. When a medical crisis attacks, they may have to move home because they have no reserves. They have no reserves because their TWO largest expenses are the rent and their Student Loans. It is an incredible financial burden that delays their launch to adulthood and often hobbles their parents’ plans for retirement. The best way to fight this is to NOT go the traditional route. I offer plenty of money-saving alternatives in my book, ENOUGH! The College Cost Crisis. There’s nothing like starting life debt-free with your hard-earned degree or certification!
Indebted is a modern-day morality play like that High School English tome, Dante’s Inferno. Do you recall the many levels of hell described therein? You might say the more you borrow the deeper your level of hell will feel.
There’s a lot more to The New Yorker article which you can read on the magazine’s website. I believe you get my point. Do the work you NEED TO DO, to stay away from these black hole decisions for the ones you love the most—- your students! Saving your student’s financial future is real superhero work.
Until next time,
All my best,
Bonnie Burkett
