Can College Students Handle Their Own Finances?

America's student loan debt is more than one trillion dollars, according to government agencies. Now, a former professor says high schools and colleges need to do more to help students manage their debt load. Host Michel Martin speaks with writer Laura McKenna about her online op-ed for The Atlantic.

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MICHEL MARTIN, HOST:

Now we turn to matters of personal finance. The national debt has been a big issue in the presidential campaign, and that's important, but there's another kind of debt that affects the lives of millions of Americans every day, and that is student loan debt.

Americans owe more than one trillion dollars in student debt currently. That's right. One trillion dollars, according to the Consumer Financial Protection Bureau and the U.S. Department of Education. And on this program we've been talking a lot about how this happened and why this happened.

Our next guest says schools themselves can do more to help students manage their finances. Laura McKenna is a former political science professor and she writes regularly for TheAtlantic.com, and she's with us now from our bureau in New York.

Professor McKenna, thanks so much for joining us.

LAURA MCKENNA: Thanks so much for having me, Michel.

MARTIN: So there's a personal story at the center of this piece. Could you tell us a little bit about Lisa and how she got you started thinking about this?

MCKENNA: Well, Lisa is our babysitter/tutor. She comes to our house every Saturday morning and works on reading with my 10-year-old son, who's on the autistic spectrum and needs a little extra help. And after she finished working with Ian, we would sit back and chat and over a few weeks her story unfolded and she told me that she's currently at her third college and by the time she graduates with a degree in special education, she'll have spent eight years in college.

MARTIN: I mean first of all, eight years in college, number one, and number two she's training to be a teacher.

MCKENNA: Right.

MARTIN: So she's not looking, at least in the initial years, at being very highly compensated. And you were saying that the financial aspect of this did not seem to loom very large in her thoughts.

MCKENNA: It didn't. She's a kid. She's a kid and kids are putting themselves into a great deal of debt without enough thought. I mean they're 18 years old. We don't let them go into a bar and order a beer, but we let them go $100,000 in debt without enough supervision, without a little bit of guidance.

Now, Lisa made a series of decisions that ultimately has cost her time in college. She transferred colleges. She switched majors. And transferring colleges, particularly if you don't transfer within a particular state, ends up meaning lost credits, because schools don't accept credits from schools outside the state very often.

MARTIN: Now, the scenario that you're talking about involves a lot of personal choice.

MCKENNA: Right.

MARTIN: In your research for this article, is that typical or are there other factors that are contributing to students not graduating on time?

MCKENNA: Well, what I did is I spoke to faculty members and I asked them what they were seeing, and they said that there was a whole range of different reasons. Sometimes it was having to do with transferring and changing your majors. Sometimes it had to do with deciding to triple major because they were so concerned about the job market. Sometimes it was because they made silly decisions like they wanted to spend an extra semester and get access to the football tickets. It was really a wide range of reasons that kids were staying for a long time.

MARTIN: And you make the point in your piece that this is where faculty advice can really make a difference. Talk a little bit more about that, if you would.

MCKENNA: Well, I mean it is the only contact that kids have with a grownup at the college, and they can tell the kids, no, don't spend an extra semester so you can get an extra major. It's not going to help you. And they are doing that, but there's a limit to what they can do.

You know, the advisors that I spoke to said they really don't feel comfortable getting into the specifics about finances. They say they're not trained in these matters. They said that the students themselves aren't bringing it up as a conversation. They're just not mature enough to really have a sense of what it means to be $30,000 in debt.

MARTIN: If you're just joining us, we're talking about the student debt issue with Laura McKenna. She's a former professor and she's written about this for TheAtlantic.com. She makes the argument that students need more guidance in minimizing this debt, in part by making better choices about how they spend their time academically.

On this program, we have a regular parenting roundtable, and one of the guests in our roundtable is a woman named Aracely Panameno, who's talked a number of times on the program about being a first generation college-goer and all the various factors that led to her daughter having trouble finishing college in four years, and this is one of the things that she was troubled by, is that she said that the faculty and other school officials at her daughter's first college, which was the University of Virginia, she felt did not send a strong message about the importance of college completion, or at least college completion on time. Here's a clip.

(SOUNDBITE OF ARCHIVED RECORDING)

ARACELY PANAMENO: When we first got to UVA, my flags went up because the very first message I heard during orientation when we got to campus was the staff was telling the students: have fun. You don't have to graduate within four years. And you know, that concerned me.

MARTIN: Yeah. What about that? Do you feel that perhaps, even among the faculty who are, in some cases, themselves struggling with, you know, extensive debt or perhaps that they are living in a different era when it really wasn't that big of a deal?

MCKENNA: I think there's more pressure on faculty and administration to get kids done in four years. When I talked to an administrator at the University of Texas about this issue, she said this was a top concern at their school because only 50 percent of the kids graduate within four years at that school and it was leading to other problems, other than just bad publicity. It was leading to overcrowding problems.

I'm not sure what's going on a UVA. That might be the case, but the faculty that I spoke to said that they consider that their job, to get the kids done.

MARTIN: Why isn't anybody talking to kids about this? Is there a sense that that's a counselor's job or that that's somebody else's job or that's the parents' job?

MCKENNA: Yeah.

MARTIN: What is that? What did you...

MCKENNA: I think there's a lot of finger-pointing. I mean the faculty didn't get into the finances. They assumed that the financial aid department was doing it. The financial aid department says that they don't have the staff for that. It's a black hole of advice. Yes. They've got the faculty who are giving them the advice to get it done in four years.

But they need more than that. They need the tools to understand, what does it mean to be $30,000 in debt? How is that going to affect my future? They need to know about career planning and making good choices in their undergraduate years so it'll pay off for them career-wise. This needs to happen somewhere. I'd like to think it should happen in high schools, before they even go to college.

MARTIN: You also make, though, the point in your piece that the biggest student loan default rate comes from the for-profit sector.

MCKENNA: Right.

MARTIN: And you also point out that the college debt is not spread out equally among all students, that it's concentrated in certain colleges, like the for-profit schools. It's also concentrated in certain populations, like kids who don't have the top SAT scores, those who don't have financial resources from home, and it's often the first time college-goer.

MCKENNA: Right.

MARTIN: So what does that suggest to you about the kinds of interventions that need to take place?

MCKENNA: I want the interventions to target those kids. I mean I talked to a professor from Swarthmore and he says student loan debt isn't a huge problem here because either the kids are wealthy or they've done super well on their SATs and we want them to come here and we offer them grants.

The problem is - is in, you know, certain sectors, and those kids really need the help. Middle class kids, they - you know, and wealthy kids - they get a lot of advice. They get advice from their parents who went to college and from, you know, just the community itself. There's a lot of working class kids who are first generation to go to college who are making some expensive mistakes.

MARTIN: I'm wondering if, now that you are a former professor - you're not teaching at the moment, I take it. But do you - when you think about the work that you've done now on this piece, are there conversations you wish you had had when you were teaching?

MCKENNA: Yeah. I mean, there's - you know, some kids need some tough love and maybe now that I'm a mom, I know how to give out tough love a little bit better, but - yeah, they really do. They need to be told to get done quickly. Get those - you know, go to an affordable college, you know, instead of spending $35,000 to get an associate's degree at a for-profit school, go to a local community college that costs $8,000.

MARTIN: Laura McKenna is a former political science professor. She's a blogger and a contributor, a regular contributor, to TheAtlantic.com and she wrote about student loan debt.

Thanks so much for joining us.

MCKENNA: Thanks so much for having me.

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