As students pile up ever-increasing education loan tabs, some colleges and universities are starting to question whether they should be counseling these young borrowers — before they end up with debt that will take them decades to work off.
Educational institutions have not seen financial counseling of students as their responsibility, although many students have little understanding of debt and their own personal finances. Most schools focus solely on getting students the funds needed to graduate, skirting discussions about the risks of credit even as a typical debt load soars into the tens of thousands of dollars.
“There has been no discussion about whether this might be to the detriment of the student,” said Mark Oleson, director of the University of Missouri’s Office for Financial Success, which counsels student borrowers. “It has always been assumed that staying in school is all that matters.”
“Education has never been thought off as an investment that involves risk, but it does,” he said. “Just like the stock market.”
Kristen Overmyer, a University of Missouri student in journalism, didn’t take out enough student loans during her freshman year and so turned to credit cards, compounding her debt. She then borrowed $22,000 in 2006 and $23,000 this year from private banks but still needs several more years to complete her degree and anticipates similar loans each year.
“When I started taking out the loans, I didn’t realize what I was getting into,” said Overmyer, who said she hopes to be out of debt by the time she is 40 years old — 19 years from now.