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The Student Loan Trap

Core Facts

Monday, March 11, 2019

Getting a college education is something that many aspire to, but is it worth it?

For some, the dream of going to college is being turned into a nightmare. The fact that you have a diploma or degree from an education facility might sound amazing, but spending money you don’t have is never a good plan.

However, if you believe it’s an investment in your future and that a degree will improve your fortunes, you may be willing to do so.

Before you choose a college or university, do your due diligence. Take a close look at their fee structure, and see if you can find one that delivers a first-class education at an affordable price.

Some for-profit schools, marketing to veterans and low-income students eligible for the maximum amount of federal financial aid are being accused of fleecing the American public. They charge 80 percent more than similar programs at for-profit schools that don’t have access to federal aid.

This means that their students have borrowed a large sum of money to enroll in the program, but they leave saddled with crippling debt. The latest research shows that 88 percent of people graduating from for-profit colleges had loans averaging just under $40,000 and account for a full 35 percent of all student loan defaults

Another factor to consider is how long the college been in business. Over 95 percent of all the colleges that have closed their doors since 2013 have been for-profit. Unfortunately, if the school does close, hardly any of the class credits are transferrable to other schools or community colleges.

Do as much research as you can before you sign up for anything. Find out if your job opportunities are going to improve enough for you to spend the money.

Get advice from someone you trust, and don’t blindly believe a recruitment advertisement if it promises job placement.

There’s ample research that shows graduates do make more money. Just find the right university or college for you, so you can graduate with a bright future ahead, not one crippled with huge student loans.




Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Lawrenceville, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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