Balancing Acts: How High School Counselors View the Risks and Opportunities of Student Loans

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Balancing Acts How High School Counselors View
the Risks and Opportunities of Student Loans

• Melissa Clinedinst
• Assistant Director for Research
• NACAC

Mari Luna De La Rosa Research Consultant Project
on Student Debt
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Purpose of Survey

• School counselors self-assessment of preparation
  to advise students about borrowing for college
• School counselors opinions about loans as
  college financing option and debt burden
• School counselors assessment of how fear of debt
  burden affects student/family decisions

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Methodology/Analysis

• Supplemental section on NACACs 2006 Secondary
  School Counseling Trends Survey
• Mailed to 10,000 high school counseling offices
• 1,552 NACAC members 8,448 randomly selected
  public high schools (CCD)
• Option to complete on paper or online
• 1,508 responses received (15 percent)
• Descriptive analysis correlation and crosstab
  (public/private FRPL-eligible enrollment
  student/counselor ratios college attendance rate

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Survey Respondent Characteristics
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School Counselors Self-Assessment of Preparation

• Good News
• 80 at least somewhat prepared to discuss loans
• 62 easy to advise whether should borrow
• Cause for Concern
• 76 difficult to advise how much to borrow
• 66 difficult to advise what type of loan
• 66 difficult to advise what happens if cant
  repay
• Unexpected Finding
• Counselors at public schools and lower-income
  schools find it easier to answer these questions

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School Counselors Opinions About Loans

• Generally Agree Loans are Good Investment
• 83 agree at least somewhat good 37 very good
• 89 agree help low-income students attend college
• Widespread Concern About Student Debt Burden
• 86 concerned about the amount of debt
• 97 agree that student/families need a lot of
  help
• 85 believe students from their school will be
  able to pay back loans (65 at lower-income
  schools vs. 88 at higher income schools)

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School Counselors Opinions About Loans (cont.)

• Particular Concern for Low-Income Students
• 69 agree good investment for all income levels
• Counselors at low-income schools more likely to
  view loans as a risky investment
• 37 think that low-income students should avoid
  loans because of consequences of default
• 14 of counselors at the lowest-income schools
  strongly agree that low-income students should
  avoid loans

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School Counselors Opinions About Loans (cont.)

• Particular Concern for Less Academically Prepared
  Students
• 74 think that students who are not well prepared
  should avoid loans
• 35 of counselors at lowest-income schools
  disagree that even well-prepared students can
  afford borrowing for college

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School Counselors Opinion About Debt and
College-Going Decisions

• 77 agree students should attend college that
  best meets their needs even if it requires taking
  out loans
• 41 agree better to attend community college or
  attend part-time to avoid loans (47 public vs.
  17 private)

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School Counselors Assessment of Student
Decisions

• 78 think that concerns about debt burden
  moderately or strongly affect college-going
  decisions (82 for public vs. 58 for private)
• 56 of counselors at lower-income schools think
  that concerns about debt burden strongly affect
  college-going decisions

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Recommendations

• More training, resources, and support for school
  counselors that give particular attention to
• Tradeoffs between strategies for avoiding loans
  and the likelihood of completing a degree
• Costs and risks of different types of borrowing
• Options available for borrowers who have
  difficulty paying back loans

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Recommendations (cont.)

• Fair and manageable loan payments
• Limit loan payments to percentage of income
• Recognize that family size affects income
  available for loan repayment
• Protect borrowers from high interest charges
  during hardship situations
• Cancel remaining debts after 20 years of regular
  payments
• Provide Direct Loan and FFEL borrowers with easy
  access to all repayment options and protections

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For More Information

• Visit NACACs Web Site www.nacacnet.org
• Contact Melissa Clinedinst
• mclinedinst_at_nacacnet.org
• 703-299-6854
• Thanks for your attention!