Singletary: Don't sentence your child to decades of debt

In one way it's fitting that May 1 is the day that many colleges require students to make their decision and send in a deposit to secure their place in the fall freshman class.

It makes me think of the term "Mayday," an internationally recognized radio distress signal used by aircraft and ships. In four, five and more likely six years from now, parents and graduating students will be crying out for help after they realize that the amount of education debt they've signed up for will create financial distress for decades.

My husband and I have been where you are now. We've faced the college selection deadline — three times. We told our three children they could apply to any college they wanted. But, we stood fast to one rule — no debt, no matter what.

For about 20 years we saved in 529 plans for each of our children. Because our eldest received some scholarship money for undergraduate studies, we had enough to pay cash for her master's degree. Our son took five years to complete his math degree. He was only offered federal loans, which we turned down. Our youngest will be graduating from Towson University this spring. We paid for her first year, and she received a full ride for the remaining three years. She'll walk into her future as a teacher with no education loans.

Providence, prudence and planning helped us get them through college debt-free.

Yet, I get it. You may feel you have no choice but to borrow. You long for your children to prosper, and debt is the price you and they are willing to pay. However, if you want to avoid a Mayday financial distress signal in years to come, here are some points to consider as you weigh your child's college choices and the prospect of using a lot of debt to help them get a degree.

Don't leave the decision up to an 18-year-old.

The protests go something like this: "What can we do if that's where he wants to go?" or "We can't disappoint our child. She's worked so hard."

You have a choice if they need you to take out loans. You can say, "No, we can't afford that particular school."

When it comes to choosing a college, all too often the desire of the student trumps the financial common sense of selecting a school that doesn't require the accumulation of debt that will take several decades to pay off.

Don't let the ability to borrow a lot of money dictate your decision.

Lenders and the federal government make it too easy to overspend on a college education. Look at the cost of room and board this way. Outside of college, would you think it was reasonable to apply for multiple loans over four to six years to pay for rent and food?

Don't ignore the long-term drag of student-loan debt on your monthly budget.

The problem with student loans is that the monthly payments don't start to make an impact on your budget until a future date. This makes it hard for students to realize how painful the payments will be once they graduate — or drop out without a degree.

Even with income-based repayment plans that can reduce the monthly cost, borrowers still bemoan having to manage student loans with all the other monthly obligations that come with living on their own.

Don't assume you're only on the financial hook for four years.

You may be planning to just take out loans for four years. But consider this: The national six-year completion rate for students who started college in the fall of 2015 was 62.2 percent, according to a report from the National Student Clearinghouse Research Center. The completion rates account for all students enrolling full-time or part-time at two-year or four-year institutions and include transfer students.

Put the college choice in perspective. A prestigious public or private institution with a hefty price tag doesn't guarantee greater employment opportunities or crucial job connections.

Yes, there are certain companies or hiring managers who pretentiously recruit from prestigious schools. But that alone is not a reason to take on unmanageable student loans. There will be other jobs.

Think about your place of employment. Maybe you went to college, maybe you didn't. Your co-workers, assuming they did, likely graduated from a variety of higher education institutions, from community colleges to Ivy League universities.

Don't forget to plan for the cost of graduate-level studies.

If your child is studying in a field where a graduate degree may be necessary for employment advancement, don't rack up a lot of debt for their undergraduate studies.

The average amount of student loans is just shy of $30,000. But that statistic leaves out a lot of folks who are living a student loan nightmare of payments. As of March 2021, about 1 in 5 borrowers were in default, according to the Pew Charitable Trusts.

I've got a reading assignment for you. Go to pewtrusts.org and read: "Borrowers Discuss the Challenges of Student Loan Repayment."

Although focus group participants talked about their gratitude for getting a college education, they also shared their frustrations with paying back their student loans because — guess what — life got in the way.

Their best-laid plans to handle payments were interrupted by income volatility and financial shocks, Pew found.

"If your car breaks down and it needs repair, are you going to get your car repaired, or are you going to do your student loan?" one Detroit borrower said.