The risings costs of higher education have led students to take on risky private loans with high interest rates. In a recent Huffington Post article, authors Manisha Thakor and Sharon Kedar offer those looking to pay for college a few tips. One guideline of note that they propose, is that students should not take out a total amount of student loans that would exceed their income within 10 years of graduation - or, in simple terms, if you expect to make an average annual income of $50,000, you should not take out more than $50,000 in student loans. Thakor and Kedar even account for taxes and savings, but note that this is not a strict formula to follow, and is flexible at one's own discretion.
Schools must continue to make financial aid a priority as well as streamlining budgetary costs so that tuition payments can more realistically be met. Further, they must consider the implications this crisis has on minority and low-income students in their pursuit to make college more affordable. These loans students are paying with represent a risky investment, and as we have learned, risky investments can have disastrous consequences.
Articles referenced:
Kevin Prior
INeedAPencil Summer Associate
Harvard College 2011
