From Debt to Distress

Navigating the Financial Burden of Higher Education

​Financial stress is a pervasive issue that affects people of all ages and backgrounds. However, it can be particularly challenging for young people, especially those pursuing higher education. The rising cost of college tuition, coupled with the increasing burden of student loan debt, can lead to significant financial hardship and emotional distress.
 
According to the Education Data Initiative, the average annual cost of college in the United States is $36,436. This means that over four years, a student can accumulate a college debt north of six figures. In fact, the total student loan debt in the U.S. is now around to $1.77 trillion.

The financial burden of higher education can have a detrimental impact on students' mental and physical well-being. A study by the Jed Foundation found that 54% of student loan borrowers report that their emotional well-being is directly correlated with their debt. This stress can lead to symptoms such as fear, shame, despair, trouble sleeping, low energy, substance misuse, and even suicidal thoughts or behaviors.
 
In addition to the emotional toll, financial stress can also negatively impact students' academic performance. When students are worried about their finances, they may have difficulty concentrating on their studies. This can lead to lower grades and an increased risk of dropping out of college.
 
The Role of Higher Education Institutions
 
Colleges and universities have a responsibility to help their students manage the financial burden of higher education. There are a number of things that institutions can do to support their students, including:
 

• Providing financial aid: There are a variety of financial aid options available to students, including scholarships, grants, and loans. Colleges and universities can help students understand and access these resources.
• Offering financial counseling: Financial counselors can provide students with personalized advice on how to manage their finances, budget effectively, and avoid debt.
• Partnering with local businesses: Colleges and universities can partner with local businesses to offer students discounts on goods and services.
• Providing access to basic needs resources: Colleges and universities can provide students with access to food pantries, laptop programs, and formal clothing banks.
• Offering health insurance: Health insurance can help students offset the costs of medical care, including mental health care.
• Offering tuition insurance: Tuition insurance can cover a student's fees if they have to withdraw due to a medical or mental health condition.

 
Financial Literacy Education
 
One of the most important things a family can do to help their child is to provide them with financial literacy education. This education should teach kids about a variety of financial topics, including budgeting, saving, investing, and credit management.
 
Financial literacy education should be incorporated into all aspects of both the high school and college experience. It should also be tailored to the specific needs of students, such as first-generation students, low-income students, and students with disabilities.
 
Conclusion
 
The financial burden of higher education is a serious problem that can have a significant impact on students' lives. However, there are a number of things that parents can do to help support their child. Teach them how to manage their money. Learn how financial aid for college works. Search for colleges that fit your budget. Enroll in a financial literacy course or go to an expert if necessary. Doing this, coupled with what colleges and universities are trying to do, your child can achieve their academic goals and thrive financially in the years to come.
 

Did you know?
Our online Road to Academic Success includes a course on Financial Literacy. This course is designed to help your child understand how money works, how to manage their money, how investments work, as well as insurance and credit.