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 Looking Ahead: Student Debt and the College Admission Process

According to data compiled by the College Board for the 2011-12 academic year, the average debt for students who borrowed money for college was $23,800 at public, four-year colleges and $29,900 at private, non-profit colleges.


“I suggest to families that early in the process that parents talk to their kids about what kind of planning they’ve been doing for college finances and whether they feel comfortable that they’re going to be able to handle whatever the kid comes up with,” said Vicki O’Day, an independent counselor in Menlo (CA) who focuses on college affordability. “I worry if people haven’t done any of that kind of thinking before they launch into the whole college application process because then you get into sort of impossible scenarios.”

College affordability has been a national topic of discussion for at least 30 years. During times of both prosperity and economic downturns, prospective and enrolled college students have been able to count on rising costs. When a recessionary economy forced millions of families to reexamine their financial situations during the past several years, anxiety over college prices intensified. Through a survey conducted during the 2008-09 school year, NACAC found an increase in the number of students abandoning plans to attend a “dream school” in favor of a more affordable option. Many students became eligible for financial aid, but the recession had also affected the financial health of colleges and universities. “We have a lot more kids that are more eligible now, but we have a lot of schools that are not meeting need,” said Stephen Williams, a college counselor at Eagle Rock High School (CA). “And frankly, if [colleges] don’t meet need with us, it’s virtually impossible.”

Some students responded to the fiscal crisis with more applications. By applying to more schools than was previously necessary, students hoped to increase their odds of finding a generous financial aid offer. The wounded economy coupled with a competitive admission process appeared to require more applications. Many counseling offices, however, advise against this behavior and sometimes forbid it. Students can apply to less than 10 schools and still find affordable, best-fit schools with solid financial aid opportunities. In addition to the traditional number of target, reach and safety schools, add another school that you can safely secure admission to and afford. During your search for a financial safety, be mindful of the institutional category each school fall under. Public, private non-profit, and for-profit schools range dramatically in average tuition costs.  

In your college search, one of the most important factors to consider involves life after college. When creating a list of potential colleges, academic and social factors often carry more weight than other practical concerns, like your anticipated debt load. Before day-dreaming about studying string theory (or throwing a Frisbee) on the quad, learn your financial limitations early. As Steps to College previously noted, a dedicated research effort will help you find out if a particular school is unaffordable. “The time to find that out is before they apply, not, in my opinion, when they are waiting to hear back and disappointed in the spring,” O’Day said.

The recession has been introducing more families to the nation’s financial aid system. Almost 90 percent of colleges reported an increase in financial aid applications in the NACAC survey. Fortunately, the presence of these financial aid opportunities has had an impact on college costs for many borrowers. A new report from the College Board found that while tuition and fees increased between the 2005-06 and 2009-10 academic years, the overall price of attending a college actually decreased on average due to financial aid opportunities. 

Once you have a list of potential colleges, discuss possible scenarios that allow you to pay for each one. O’Day calls these “affordability stories.” In the affordability story, include any types of financial aid. Student aid includes “gift aid,” like scholarships and grants that do not have to be paid back, as well as work study programs and any federal aid or private loans.  Federal aid offers lower interest rates and is typically safer than private loans. Fees and high interest rates, often included in private loans, will greatly increase your risk of generating a large debt load upon graduation. Private loans are nearly impossible to discharge, even in cases of bankruptcy, and should only be used after all other options have been explored.

O’Day advises students to stay away from private lenders completely. “Don’t go outside the federal loan program,” she said. “They would absolutely love to lend you money on very little more than a signature, but don’t do it.”

To find out more about student loans, ask your college counselor about any informational programs offered by your school district. Many high schools hold evening sessions on borrowing for college that will help you and your family map your financial path to college. Stephen Williams works with his district to offer unbiased borrowing advice to his students. “We try to keep them away from anybody that’s going to sell them something,” he said. Private lenders may try to offer attractive loan products, but remember to read any contracts closely before you sign them.       

Before making assumptions about your financial aid eligibility, fill out the Free Application for Federal Student Aid (FAFSA). This form is the most important document to remember when filing for federal student aid. The FAFSA is available online, and recent updates have made it even easier to apply for aid. Visit the FAFSA Website for a helpful introduction to this form, and remember to use the FAFSA4caster to see a preview of your financial aid eligibility. The US financial aid system has evolved over time and is always changing, so fill out the FAFSA even if you are doubtful you will receive the federal assistance. 

Recent changes in federal law are designed to make it easier for students to pay back the loans they take out for college. Links to the U.S. Department of Education and Consumer Financial Protection Bureau on this page can lead you to helpful resources as you consider the cost of going to college.


Student debt can become a serious problem if left unchecked. Before agreeing to any loan terms, consider your potential for debt. Federal loans are always a safer alternative to private loans, but any loan requires a careful eye and an understanding of financial limitations. Financial planning for college can begin before signing a loan agreement, and even before filling out the FAFSA. Have a conversation with your family about college costs at the beginning of your college search to ease stress and frustration later in the process.

Published 2010. Updated 2013.