The month of March is always exciting for college-bound high school seniors. Acceptances arrive via applicant portals, email, US mail, FedEx, UPS, and there may even be a follow-up phone call somewhere in the mix. The adrenaline rush from getting into a favored school, especially a first-choice "dream" school, is something to be cherished, a memory for a lifetime.

In many cases, along with the "Yes!" news comes a financial aid award statement detailing the assistance colleges are offering admitted students. For those families with exceptional incomes and resources, there may not be an aid package because they fall into the "full-pay" category.

However, the vast majority of incoming students need some level of assistance to meet today's sky-high college costs. That adrenaline rush I mentioned can easily cloud a family's judgment about evaluating an aid package's realities, specifically the reality of loan debt.

Consider This Example

To show you what I mean, here's part of a response I wrote some years back to a gentleman who sent me a copy of his granddaughter's financial aid award letter, which she received from a local four-year liberal arts college. He asked for my opinion. My response surprised him:

John, this is part of the problem for today's young people: student loan debt. Kaleigh and her parents (cosigners) will be on the hook for $19,660 of loans just for her freshman year. Take that number times four (if, in fact, she can graduate in four years) and Kaleigh (and Mom and Dad) will graduate with $78,640 of loan debt that, assuming she doesn't go to graduate school, will begin to come due six months after she graduates.

Now, that almost $80K of loan debt could be more, due to something called "front loading." That's what colleges do to entice admitted students to enroll. They offer a "decent" (which this one isn't) aid package for freshman year and then gradually DEcrease the aid over the next three years, increasing loans. The student is "trapped" at the school and has committed to a degree program. If they choose to transfer, they may lose credits and need to go an additional semester or even a year to make up for lost time and requirements.

[College name] isn't known for its aid, as you can see from this package. Frankly, most college grads who accumulate $80K in loan debt never get it paid off because their employment income does not allow for making sufficient payments to overcome the advancing interest. This is a huge problem nationally and one that I have written about a number of times.

My suggestion? I would tell Mom and Dad to take Kaleigh to the financial aid office and say, "Sorry. If you can't do significantly better than this, then Kaleigh won't be able to attend." Then, throw those debt numbers at the aid officer. They'll probably do a little better, but my guess is that instead of $20K per year in loans, they may whittle that down to $18K or so. Still, a very lousy deal.

Options: Kaleigh could take a so-called "Gap Year," where she stays at home, works a meaningful job, matures a bit, and then reapplies this fall to schools that have a much better endowment that enables far better financial aid. I know nothing about her academic and EC profile, but I'm betting that she could probably get accepted into a school that's not too far from home that offers a better deal than $80K in loan debt.

Just my professional opinion, John. I hate to see deals like this. These colleges should be ashamed to offer lifetime debt disguised as "aid." ...

I see these kinds of situations all the time. There's a great older thread on the College Confidential discussion forum entitled The Answer is No! No, it's not worth it to borrow large amounts for: The poster who started this thread continues:

1. Premed ~ particularly for an OOS public, even if it's a UC

2. Prelaw

3. NYU

4. All or nearly all engineering programs, including biomedE

5. Education degrees

6. Nursing degrees

7. MOST degrees….but especially: theater, film, psych, biology, sports mgmt and marketing.

Check the many responses that follow about not taking on enormous student loan debt. I'm not the only one preaching about this.

Understand the "Front-Loading" Concept

Let's take a closer look at front-loading. Here are some helpful links. I'll highlight one of them with these excerpts from Front-Loaded Financial Aid – How Will You Know? by Wendy Nelson:

Have you heard about front-loaded financial aid? This is where a college attracts your student by offering a great financial aid package for the first year and then drops aid off for subsequent years. Is this something you need to be concerned about? If you can't afford to pay full sticker price for your student's college, you need to understand and be concerned about colleges front-loading financial aid packages!

Why does front-loaded financial aid happen? According to Mark Kantrowitz, senior vice president at Edvisors, in an article on The Hechinger Report, "institutions offer more to first-year students and their parents as a kind of "leveraging; they're using financial aid as a recruiting tool." Colleges are doing whatever they can to recruit students they are interested in. In many cases, throwing extra aid at the target student will increase the chances he or she will ultimately select that school …

Tips to Avoid Front-Loaded Financial Aid

Understand what part of the financial aid package offered by a college is income dependent – This would be need-based scholarships and grants. Anything that is not strictly based on "merit" (GPA, ACT/SAT scores, class rank) has a need-based component.

Ask questions about anything labeled a "grant" – These can be vague and hard to find listed on the college's website. Questions to ask include – What is the grant based on – need or merit? Is the grant renewable or is it for the first year only?

Make sure you understand the renewal qualifications for any scholarships offered to your student – Does the student need to maintain a specific GPA in college? Is the renewal automatic? Does the student need to request the scholarship each year or fill out any paperwork in order to renew it?

Think about what might change in your financial picture over four years of college – Are there years when you will have more than one student in college and years when you will only have one? This will make a big difference in financial aid eligibility. Make sure you run a Net Price Calculator for each potential school with each different scenario that may occur. This will give you a preview of how your financial aid eligibility may change.

Ask direct questions about front-loading – Don't be afraid to question the financial aid office. Make sure you are talking to someone in a position of authority, like the Financial Aid Director. Ask straight out if you are guaranteed the same amount of aid for your student's second year and beyond. You may not get a direct answer, but you can gauge a lot by how much of an attempt is made to avoid answering the question!

Front-loaded financial aid can make a college look really attractive for the first year. Make sure you know the full story so that you can avoid any surprises for the second and subsequent years. Know what aid is renewable and know what is one-time only ...

Students and parents: Look closely at financial aid awards. Don't assume that everything you're offered for your first year will be available in coming years. That's the unfortunate reality of front-loading and loan debt.

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