Colleen O’Brien: Is the FAFSA loan worth the degree?
Apr 21, 2024, 11:29 AM | Updated: 11:57 am
Empty desks at Twentynine Palms Junior High School in Twentynine Palms, Calif., Aug. 18, 2020. (File photo: Gregory Bull, AP)
(File photo: Gregory Bull, AP)
There have been a lot of mishaps happening in the student loan arena, so we called up CBS Business Analyst Jill Schlesinger to help clarify how families can navigate the complicated system. The federal government just revised the Free Application for Federal Student Aid — or FAFSA — forms to make them less cumbersome. Questions on the form were reduced from about 100 to just 30, but the rollout of this new form at the start of 2024 was less than ideal with technical glitches stopping many from completing it.
“They fix those problems. But now we have a new problem. And that is that some colleges said they received incorrect information from this government FAFSA form, the department of ed said, we get it, we know we have problems, they’re correcting these errors. Most of these problems should be resolved by the end of this month. But that leaves a lot of families sort of in limbo waiting to hear,” Schlesinger told Seattle’s Morning News on KIRO Newsradio.
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May 1 is typically the date to choose a college or university, but without answers on whether a prospective student got the financial aid needed, there’s no way to declare that. Some schools have extended the deadline by a couple of weeks, which helps, but there is no clear deadline on when FAFSA issues will be resolved.
This opens up the opportunity for a larger conversation, according to Schlesinger, that should start freshman year of high school but may still be valid at any point: Is your degree worth the loan?
“I think the biggest problem that we have seen maybe in the past 20 years or so, is that people are had been assuming loans and huge loans. And they said, OK, well, I’ll get a great job, I’ll pay it back. But what we have found out is that, of course, many people are really struggling to pay down this debt, because they’ve gotten jobs that didn’t support the amount of the loan that they took out,” Schlesinger said.
So, I think people need to have very frank conversations. This has to be a conversation where we are talking to one another about what this family as a total family can afford? What will that do to whoever is paying these loans back? How will we balance the need for us to plan for our retirement and send you to college, all these things are really important,” she continued.
Schlesinger said college degrees are still valuable. Research has shown college graduates earn more money over their careers, but borrowing too much money means their advantage will begin to narrow.
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Schlesinger has developed a rule of thumb for student loans: Limit the borrowing for the student to what you believe will be their first-year salary. That may sound tough to calculate, but there are plenty of websites out there that offer a peek into salary ranges.
You can hear the entire conversation with CBS Business Analyst Jill Schlesinger on the April 19 Seattle’s Morning News podcast, where Colleen O’Brien and Travis Mayfield ask her about President Joe Biden’s continued efforts to eliminate or reduce student loan debt.
To listen to the podcast, go here.
Listen to Seattle’s Morning News with Dave Ross and Colleen O’Brien weekday mornings from 5-9 a.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.
