How to avoid excessive debt

Daniel Pinch, dean of enrollment at Emerson College, spoke to Globe higher education reporter Marcella Bombardieri about how college students and their families can stay out of financial trouble. Pinch has worked with financial aid and financial services at Emerson for 10 years. He has also put six of his own children through college and still has one left to go.

Q. How do students figure out if they will be able to able to afford to pay back their loans?

A. I usually say if the student can graduate and owe one year's tuition, they should be okay. I'm talking private school's here [and not counting room and board.] Publics are a bit of a different game. At Emerson it's about $25,000. If you can graduate and owe less than $25,000, you're in a reasonable range. We hope for less than $20,000, and we average $18,000.

If you have Perkins and Stafford loans, you could borrow around $24,000, and you'd be paying back around $200 a month, depending on the rates.

Previous to this year, a lot of students were able to locked in at two percent interest. Now it's much higher -- over six percent. Over the long haul that's a lot more money the student ends up paying.

Now there's a value, so it comes down to: do you think that education is worth that money? If you're going to pay a couple hundred dollars a month in loan payments when you graduate -- is that too much? It depends on whether you get a job right away or how much you're making.

Q. But you see students trying to borrow a lot more than that.

A. Usually the problem is if [the school determines an] expected contribution from the parent and the parent is not going to do it. So the student is trying to take out an additional loan to pay the parent contribution. If somebody is borrowing $20,000 year, that's $80,000 at the end of four years, and they're not going to be able to pay the $800 a month.

This is when I would say this is not for you. You try to be compassionate about it because the student obviously wants to come, but the school has to be responsible and say, 'Honest to God, this is not right for you. We want you to come and we think you could do well but the numbers don't work out." Maybe you could counsel them on going to another school for two years and then transferring -- a state school, with lower tuition, and then come in for the last two years. You still graduate from Emerson but you didn't pay for four years.

Now we can't stop somebody form borrowing, but we can advise. We want to keep someone from getting into a mess. When someone is 18 years old, they don't know they are going to be 23 and have creditors chasing them to the point that they can't answer the phone.

Q. What should students or parents do if they think their college has made a mistake and is overcharging them for tuition, room and board, or other fees?

A. I've dealt with a lot of schools as a parent and worked at five schools.

If you think your charges are wrong or they didn't credit something properly, first, email student accounts or the bursar's office with detailed information on what you think is inaccurate. Hopefully you'll get a response that'll clear that up.

If you don't, my next step would be to contact by phone, or in person, the supervisor or vice president who runs the bursar's office. I'm fairly confident by that point you will have some resolution. It could be the school is right, it could be they are wrong. One thing I've found is that whenever the school is incorrect, they'll make it right.

I find people who are unsuccessful let it go for a long time, then the call the main line and they don't get to the right person. The frustration level gets higher and higher. You are so upset by the time you do get someone you've already hit the afterburn. It's hard to get any information from somebody's who's just spewing.

Believe me it's a stressful thing, it's a lot of money involved, it's your kid. Things happen. We get two million pieces of mail a year in the financial aid office. Let's say a half a percent of the mail gets lost. Is that acceptable? If it's your mail there's no acceptable percent. No school is going to tell you that nothing ever got lost.

Q. What should graduates do if they can't make loan payments that are due to their alma mater, or to the government or a bank?

A. I would call the school, even if you're already out [and even if the money is due to another institution.] Loan services handle millions of loans. It sometimes get difficult to negotiate through that system. People don't know where to make a payment, they moved, they can't get an answer. If you contact your school, the financial aid office will find out where your loans are, contact the people for you and talk through whatever the problem is.

If you can't make a payment, they will help you set up a deferment or forbearance. We don't drop you when you graduate. The alumni are part of our mission, also. Utilize that free service. Somebody else will do the legwork. They'll get somebody on the phone and have them contact you, or they'll be able to give you the information themselves.

If you've lost job, or you're in job transition, you can get a forbearance, which means you don't have to pay anything for a year but the loan is still accumulating interest. If you go back to graduate school, you can get a deferment, and you don't [usually] have to pay interest.

The worst thing you can do is not contact anybody and just let it ride.

Here's my reason -- they report you to credit bureaus. Then five years form now you go to buy car, or buy a house, and you can't. If you just contacted them, they'll either give you a deferment or forbearance or just give you a reduced payment plan. Why get into bad credit when just talking to them, you can work out something?