How to Get Recruited Guide

Student Loans and Your College Investment ROI

Many of you parents have been chasing the dream of a college athletic scholarship for years. Some of your children will receive a full ride scholarship, but full rides are few and far between. If your child has already been offered a full ride – Congratulations! You can skip the rest of this article.

The rest of you will be paying for college while your child competes as an athlete. Many athletes will be awarded partial athletic scholarships that will help cover the price of college. Every little bit helps. But when all of the scholarships and grants have been deducted from your tuition bill, your family needs to figure out how to pay the remaining balance. The easiest solution provided by colleges is a student loan package. I’m telling you: Don’t take out more in debt than your child can afford to repay.

Too Much Debt

First, a few facts. Don’t breeze over these. Look into your child’s future as they begin their career and family.

Price Waterhouse Coopers and George Washington University did an in depth study on young adults, 23 to 35 years in age, and created the Millennials & Financial Literacy Report. Here are some of their findings:

  • 81% of college educated millennials carry at least one long term debt.
  • 54% are worried about their ability to repay their student loans.
  • 34% are very unsatisfied with their current financial situation.
  • Nearly 50% said they could not scrape together $2,000 in an emergency.
  • Nearly 30% are overdrawing on their bank accounts.
  • 53% have carried a credit card balance in the past 12 months.
  • 28% of millennials who have a college degree have used services such as payday loans, pawnshops, auto title loans, tax refund advances and rent-to-own products.

How do young men and women graduating from college end up struggling to financially survive?

Net Price of Education

With each financial aid package a wondrous sleight of hand takes place. It does not matter if the schools you are looking at are $10,000 or $45,000 a year. When you receive the financial aid packages, there is a long list of figures which will tell you definitively, “You can afford our school!”

The colleges send a slick package that looks something like this for a school with a cost of $45,000 per year:

  • Achievement scholarship       $6,000         
  • University grant                     $2,000
  • Federal Pell Grant                  $5,500
  • Federal SEOG Grant               $2,000         
  • State Grant                            $2,000
  • Athletic Scholarship               $4,000
    • Total Gift Aid                 $21,500
  • Stafford Subsidized Loan       $3,500
  • Stafford Unsubsidized Loan   $2,000
  • Parent Plus Loan                   $16,000
  • Federal College Work Study   $2,000
    • (this is a minimum wage job, and one you are not guaranteed.)
    • Total Self-Help Aid       $23,500

Side note: College tuition is currently climbing 4-5% per year. This translates into $500 per $10,000 of tuition price. A $40,000 school will be $42,000 next year and approximately $46,000 in year four.

Woohoo! $4000 athletic scholarship! Is that all you see?

These numbers vary depending upon the college’s sticker price and what they believe your family can contribute. Higher wage earners should expect to pay more out of pocket. In my hypothetical example I just gave your son/daughter a financial aid package of $45,000. The award letter is clear, you can afford that education. And what’s better, it won’t cost a penny from your pocket. How can you refuse FREE education?

College grads are looking back in horror as they realize they were duped. The college was not handing out free money. That $23,500 of “Self-Help aid” in my hypothetical example is $21, 500 of debt that you or your child will pay back every penny of, with interest. This is just the freshmen year. There are three or four more years to come. Your child could graduate with eighty to one hundred thousand dollars in student loan debt.

Easy money during college becomes crushing debt afterword.

Even more sobering, the statistics say that fewer than 50% of those who enter college will graduate in four years and just over 50% will graduate in 6 years. Imagine being in the 50% who don’t graduate, yet do have student debt.

I know you’re thinking, “Not my child.” But statistics don’t lie, it’s true for about half of your children. Realistically many college athletes need more than four years to complete their degree because of the time commitment to the athletic program.

Ask the Right Questions

Matt Bell of says, “The use of debt has become the assumed, unquestioned way of paying for college.” I believe it is our job as parents to protect and advise our 18 year old. Don’t be afraid to have the difficult conversations, infusing realism into what can feel like a dream world when your athlete is chased by college coaches for their teams.

All of this doesn’t mean you can’t afford private or state schools. It does mean, do your research and understand what exactly is being offered and how much you will actually have to pay now and repay later.

Let’s jump back to the post college side of life for your child. Matt Bell offers these helpful questions.

  • What is the average salary for your intended career?
  • Project out how much money you will owe in student loans if you go to this school?
  • What would the monthly payment be when you graduate? For how long?
  • How does that payment fit into a budget for your working self?

A college education is an investment, and with every investment you can calculate your return on investment (ROI). Forbes has a great article, 5 Steps to Calculate Your College ROI, that I highly recommend. As a general rule, try to keep your athlete’s total student loan debt less than their projected annual starting salary. This ratio will allow your child to repay their student loans in about 10 years. Even better, keep student loan debt lower and pay it off sooner.

Tip: Do an internet search using the name of a school you are interested in and the words “Net Price Calculator.” You should end up on a page with a form created by the financial aid office. In about 10 minutes you can get a rough estimate of how much it will cost your child to attend that school.

As coaches begin to call and recruit your child, get a rough idea of the net price of each school. When you look at the award letter, recognize that student loans are not a reflection of how great an athlete your child is. Student loans are a debt you are responsible to fully repay. Make sure the loans are worth it.

If you have been chasing athletic scholarships and only end up with student loans, you have been duped.

Do not let these realities discourage you. There are good financial packages to be found at Division 1, 2, 3 and NAIA schools. You have to spend the time finding the right school with the right total financial package. I would encourage you to find the best value you can, at a school you like.

Only 7% of all high school athletes are able to experience the life changing experience of college athletics. If your passion is to play in college, you need a plan to get there.

How to Get Recruited: Got Talent. Get a Plan. Get Recruited.

How to Get Recruited


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