In the U.S. approximately two thirds of Bachelor's degree recipients receive student loans from public or private lenders. In the early 1990's only about 45% of graduates borrowed money from any source, including family. The average debt for student borrowers last year was approximately $23,300, 10% of student borrowers owed more than $54,000 and 3% owed more than $100,000.
Federal law requires schools to provide basic "entry" and "exit" loan counseling. However, many schools market themselves to students without explaining the actual cost of attendance. Additionally, financial aid letters often blur the distinction between loans and grants, making the school look like a better deal than it really is. Also, once students are enrolled they are generally not receiving any counseling during the years they are enrolled, while still borrowing money every year.
President Obama's administration has proposed rquiring colleges to clearly disclose costs in a standardized "shopping sheet" that would allow students to see the aid they are receiving and the debt that they would incur. Later in the year the administration plans to post an internet "scorecard" that rates each college nationally on affordability and value, which are defined by graduation rates and whether graduates earn enough on average to repay their debts.
Additionally, a pending bill in the Senate would require colleges and lenders to educate students about the differences between federal loans and riskier, pricier private loans, and their borrowing choices. However, I think there is always more than can be done to help students and potential students to truly understand how much college is going to cost and how much debt they are going to have after graduation, including how long it will take them to pay it off. As a reminder, student loans are generally not dischargeable in bankruptcy. Please leave any questions or comments you may have.
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