Case Studies    

Consider the case of Chris Gonzalez. Chris borrowed $218,000 over the course of 5 years for a bachelor’s degree in engineering from Embry Riddle. He fell behind on his student loans after he got cancer.

The federal government cut him some slack. The state of NJ, however, sued him for $266,000.  That includes $188,000 for the original state loans, $34,000 in interest, and $44,000 in collection fees.

Unfortunately, this is part of a growing trend in NJ where the loan program has been dubbed “state-sanctioned loan sharking.” Remarkably, one NJ family racked up $800,000 in state debt—five times more than their house is worth.

As these examples show, failure to take into account how much college you can afford can end in total and utter financial ruin.

Bottom Line

Just because you can borrow enough money to cover the entire cost of attending your dream school doesn’t mean you should. Use EFC and net price calculators to develop a college list of schools to apply to that will give your child the most scholarships and grants. You’ll be glad you did!

What’s your biggest challenge? 

Please share your thoughts in the comments section below.

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Related Videos

Think it’s too soon to get started? Think again! In these two videos, you’ll learn everything you need to know about Expected Family Contributions to help you get started.

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Reading Corner

New Jersey’s Student Loan Program is ‘State-Sanctioned Loan-Sharking’: “The loans have extraordinarily stringent rules, aggressive collections and few reprieves, even for borrowers who’ve died. The head of the loan agency was appointed by Gov. Chris Christie.” ~Annie Waldman

New Jersey Legislators Move to Reform Aggressive Student Loan Program: “The move is the latest action to rein in the agency, whose loans have left families financially ruined.” ~Annie Waldman

Smart Money Smart Kids: Raising the Next Generation to Win with Money:  “In Smart Money Smart Kids, financial expert and best-selling author Dave Ramsey and his daughter Rachel Cruze teach parents how to raise money-smart kids in a debt-filled world.” ~Amazon

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