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[nnn]

I have read so many " average indebtedness" after college ( four year
undergraduate) .
It seems to be so low........$18k-24k.............Even at a $35k plus a year
school they still clam this .

My daughter is looking at $35k a year plus an estimated 4k in
extras...........Lets say $39k a year. She may be awarded $15 k a year in
academic scholarships. ( So far has $10k )
This brings us to $29k or $24k if she gets the other $5k.
We will give $40k to each of our three children for college. ( 18,16,12 )
This leaves our first daughter with 39k x 4 = $ 156k-60k( awards) - 40k
(parents) = $56k

How does everyone get the average indebtedness so low?

[Steve Blank]

I've always been skeptical about these averages. You would have to ask
each college how they came up with their numbers.

From my vantage point most students receiving financial aid probably
have taken the maximum Stafford loan each year, $2,625 for freshmen,
$3,500 for sophomores, and $5,500 for juniors and seniors. That alone is
$17,125. Then there's the Perkins loans that could add several thousand
more.

But I suspect that the averages quoted are for all students, including
those who didn't receive need-based aid or didn't even apply. So all
those zero-loan students will pull the average down.

The problem with averages is that there may be nobody who is average. If
half the students took $17,000 in loans, and the other half took none,
then the average is $8,500 but nobody actually has that and every
student who borrowed really owes $17,000.

I also figure that these loan averages are only loans taken out by the
student, not any taken by the parents.

My philosophy is that averages are nice, but what's my student actually
going to have?

--
Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761



nnn wrote:

[Sarath Perera]

I recently realised that average indebtness is most useless and often
misleading term. Colleges that do not offer 100% need just give
stafford and their average indebtness becomes lower than total
stafford (lower because not everybody takes stafford). Colleges that
try to helpout little more by offering Perkins endup higher in average
indebtness. In either case most parents endup borrowing lot of money
just to cover the EFC, and these go unrecorded. Colleges that use CSS
profile can calculate your EFC higher and push more towards these
unrecorded loans.

Sarath.