6-22-07 High School Counselors Face Challenges When Advising Students about Borrowing Money

Volume 20 For Publication Date: June 22, 2007 No. 14

High School Counselors Face Challenges When
Advising Students about Borrowing Money

According to the Project on Student Debt, a 2005 college graduate in California will have more than $15,000 in student debt. The reality of increasing higher education costs and reliance on student loans has high school counselors facing particular challenges when advising students about borrowing money to pay for college.

“Balancing Acts: How High-School Counselors View Risks and Opportunities of Students Loans,” a new study released by the National Association for College Admission Counseling (NACAC) and the Project on Student Debt takes a close look at this new role for high school counselors. While some counselors agree that loans can help needy students, some are advising against them because of the default risk these students may face. With the widespread concern about student debt, many more college graduates are coming out of institutions financially strapped before they can begin careers.

The findings of the NACAC survey reveal that counselors are serving dual roles of encouraging students to pursue college opportunities when they have no real resources except loans to pay for it. Counselors acknowledge that, while they advise, they are also asking students to take on debt. According to the report, “Although decisions about whether and how much to borrow are ultimately made by students and their families, high school counselors are a critical source of information about loans and other forms of financial aid.”

Throughout the study, there was variation in how prepared counselors feel to answer typical questions about student loans and their view of the costs and benefits of borrowing. According to NACAC, the key findings of the study include:

§ 86% of high school counselors are concerned about the level of debt students are taking on to pay for college

§ 78% of high school counselors say that students’ and parents’ concerns about loan debt affect whether and where students go to college

§ 56% of counselors at schools with a majority of low-income students are much more likely to say that fear of debt “strongly affects” college choices compared to 34% of counselors at schools with fewer low-income students

§ 97% of high school counselors say that students and families need a lot of help making decisions about student loans

§ Approximately 80% of high school counselors feel “somewhat prepared” to discuss loans with students and families, while 25% feel “very prepared” to have that discussion

§ 62% of counselors find it at least “somewhat easy” to answer questions about whether to borrow to pay for college

§ 76% of counselors find it at least “somewhat hard” to advise students and families about how much they can afford to borrow; and two-thirds say it is hard to answer questions about what type of loan to take (66%) and what happens if borrowers cannot pay back their loans (64%)

§ Most high school counselors believe student loans are a good investment for a typical student at their school, while 83% believe loans are at least a “somewhat good” investment and 37% believe they are a “very good” investment

§ 89% of high school counselors say that student loans help low-income students attend college; however, more than one-third of counselors (37%) believe that low-income students should avoid student loans because of the risks of default

High school counselors have an important role in guiding students through the college admission process, yet that role is largely becoming more of a financial advisor rather than a career advisor.

NACAC is an education association of more than 9,800 secondary school counselors, independent counselors, college admission and financial aid officers, and organizations that work with students. For additional information about NACAC and a copy of the study go to: www.nacacnet.org.

—Jamillah Moore, Ed.D.