11/15/2012 10:29 am ET Updated Jan 15, 2013

The Pig is a Viper: College with Too Much Debt is Not Worth It

Never have the stakes been so high in college admissions. One mistake can condemn a student to a lifetime of debt. We can argue about the root cause of the student loan mess, but families must do something now to protect their children.

It all comes down to saving, the opposite of borrowing. If families begin to save when their children are young, they can make a significant dent in college costs. This is especially true for low-income families, which have access to need-based scholarships.

If a family is poor enough, it can run the table on financial aid, picking up federal and state grants along with work study and college discounts. Altogether, these aid programs amount to almost enough to pay for tuition and fees at any four-year state school. On average, parents and students would be required to contribute about $2,000 per year from their own savings. And two-year schools are much cheaper, with grants sufficiently covering college costs.

This is not to trivialize college costs. Not only are the tuitions of private schools stratospheric, and out-of-state charges for public schools too high, but college life is very expensive. And these costs are rising fast. Over the past decade, the cost of public four-year colleges rose by 68%, much faster than inflation.

To accumulate savings requires time. Parents must start building their children's college accounts years before college. Unfortunately, we provide parents with little awareness and no incentive to save. Scholarships are awarded at high school graduation, after all the grades are in and only a few months before college begins. We miss a huge opportunity by not marketing these scholarships at the beginning of high school, when their possibility can motivate parents to save and students to perform.

And let's also challenge parents to get some skin in the game by matching what they save for college with federal grants that replace scholarships, or at least supplement them. Matches are in fact more powerful than scholarships because they give parents the opportunity to get involved in the college game. Besides, our tax dollars will go a lot further if we match.

But saving is not enough. Families must educate themselves about the college access process. Many Americans spend more time buying a car, yet the risk of a lemon is nothing compared to the risk of shackling their children with debt.

Families cannot afford to miss out on learning about college costs, scholarships, the differences between schools, the importance of networking and the dangers of too much debt. One of the most dangerous decisions we make is to pick an expensive school that requires loans over a cheaper, often public, school. We buy into the belief that whatever lays ahead in the future, our children can repay their loans as adults. We bet too much. Even if loans of $50,000 or $100,000 could be repaid, the repayment will take too long and prove too burdensome. It's a sucker's bet.

Ever since the amount of student debt passed one trillion dollars, our awareness of the crisis at-hand has grown. We have learned that five to six million people are in default for more than $90 billion dollars in student loans, and that an even greater number have deferred their loans because they cannot meet payments. The default and deferment rates are growing fast, and now surpass the highest rates of homeowner nonpayment during the mortgage crisis. Not surprisingly, hundreds of thousands of students have signed an online petition for a bailout.

As things stand today, families sending young adults to college risk "buying a pig in a poke." Our society tries to sell them on the necessity of going to college and the wisdom of taking out as many loans as necessary to do so. But armed with sufficient savings and knowledge, families can look into "the poke" and see the pig is really a viper. Now more than ever, they must search for colleges their children can afford.