The WSJ’s Guide to Student Loans: Navigating College Debt Myths and Misunderstandings

With chapters on a range of undergraduate and graduate programs, as well as for borrowing parents and people who have taken out loans before, the guide provides valuable information on how to measure the potential gain of various degrees before borrowing and how to manage debt that is already unpaid.

As college costs have skyrocketed and higher education has become a must for many careers, borrowing has become a standard way to pay for education. More than 43 million borrowers collectively owe about $1.6 trillion in federal student loans. A pause in payments and an interest freeze during the coronavirus pandemic provided relief to borrowers, but those moratoriums are set to expire later this year.

Some Democratic politicians have made further student loan forgiveness a priority policy issue, although sweeping forgiveness measures seem dead for now. Any effort to ease the burden on borrowers is likely to push the federal loan program deeper into the red, a cause for concern for many taxpayers.

Colleges, on the other hand, benefit financially from easy student loan money. A series of Journal articles in 2021 explored how wealthy private colleges are leaving graduate students and parents eligible for unlimited federal loans with heavy debt. The series further explored how prestigious private schools leverage their brands to charge top dollar for graduate degrees that offer paltry earnings prospects.

Expanding on these reports, the Journal’s new guide takes a broader look at how colleges offer financial aid to students and parents, and which degrees offer the best and worst financial outcomes. Among the discoveries:

• Many wealthy schools offer generous undergraduate financial aid, but not all of them. At some colleges with large endowments, students from low-income families owed as much after scholarships, on average, as students from more affluent backgrounds.
• Fields that typically required a master’s degree had a lower median annual salary in 2020 ($76,800) than those that typically required a bachelor’s degree ($78,020), according to the U.S. Bureau of Labor Statistics.
• In some cases, graduate programs at public universities have resulted in higher salaries than programs at prestigious private schools in the same city. Yet private college students ended up with a lot more debt.

This guide includes answers to common questions about student debt and step-by-step instructions where families can find additional information about income prospects for specific programs and other financial aid resources – sometimes difficult documents. to find. The Journal analyzed publicly available federal student loan data to compile dozens of graphs that show which programs leave students with high debt relative to their salary, which offer borrowers good value for money, and much more. .

In addition, the guide contains brief case studies of borrowers, advice from financial aid experts, checklists to help you navigate the borrowing process, and a glossary of commonly used terms. The guide’s digital format allows readers to easily click from section to section. The guide was reported and written by Andrea Fuller, Melissa Korn, Rebecca Ballhaus, Tawnell D. Hobbs and Rebecca Smith, with data analysis by Ms. Fuller.

Getting into debt can be one of the most important financial decisions borrowers can make in their lifetime. With The WSJ Guide to Student Loans, readers can make more informed decisions before taking on debt that can linger for decades.

Visit this link to download the WSJ guide to student loans.