For some families, new student loan caps are a big factor in college decisions

Ever since Donovan Scott was about ten years old, he’s known he wanted to go to a historically Black college or university.

He was drawn to depictions he saw of them in movies and TV shows. Plus, he said, “a lot of my family went to historically Black colleges, like my father, my grandmothers, my auntie.”

Now 18, and just through the long saga that is the college search and application process, he’s bound for an HBCU in the fall. First though, high school graduation, in just a few weeks.

“This year rushed by really fast,” said Scott, who lives in Savannah, Georgia, with his mom, dad, and three-year-old brother. “I kind of wanted to enjoy it a little bit more. And I did enjoy some parts, but it just slipped by me, like water.”

Scott’s parents started taking him to look at colleges back when he was a sophomore. HBCUs mostly, with good mechanical engineering programs and marching bands. His mom, Toni Gray, said they started talking to him about finances then, too.

“I was always big on telling him kind of like, well, ‘Hey, you go where you’re wanted,’” she said with a laugh. Meaning: to a school that gives you money.

“Big names are great. And I actually wanted a big name school for him,” she said. “But at the end of the day, just with how the economy is … we're going to go whatever leaves us with less debt. So he understood that going in.”

Money was always going to be a big part of the decision for Gray, Scott, and their family. But it became an even bigger part once Congress approved new caps on federal student loans for both parents and students.

Starting this summer, parents will now only be able to borrow up to $20,000 a year in federal Parent PLUS loans, and will have a lifetime max of $65,000 per child. The annual amount undergraduate students can borrow from the government hasn’t changed, but there is a new lifetime cap on how much they can take out for undergrad and graduate school combined: $257,000.

At many private colleges and universities, the cost of attendance can easily exceed the new federal loan caps. The only other option for students enrolling this fall will be private loans, which not everyone will qualify for, and which don’t have as many protections.

Gray talked about all of this with Scott as he was narrowing his list of schools down last fall, but encouraged him to apply everywhere anyway, and see what kind of aid and scholarships he might get. So he did.

“He got into pretty much every school he applied to,” she said. “We sat down with the numbers and did the cost. So that was the hard part.”

Hard because he got into some top schools, including Howard University, Morehouse College, and North Carolina A&T State University, but none of them gave him much aid.

“My number one school, A&T, as much as I loved the school, realistically, there was no way for us to afford it without putting myself and my parents in crippling debt,” Scott said.

Looking at the numbers, Gray said they realized they would hit the new cap on federal student loans, and would have to take out private loans, too.

“I kind of explained the new loan rules to him,” she said, “exactly how much this would cost not just him, but cost us. And just being realistic about what we could do and could not do, or what we also didn't want to take on.”

Even Scott had known that before he applied, it was still hard to hear once he’d gotten in.

“If I'm being honest, I was sad at first,” he said. “Because, you know, no one wants to hear that you can't go to your dream school. But I've accepted it now, because, if I'm being realistic, there was no way for me to really do it. Well, if I did, it'd be a pretty not good financial decision.”

In a way, the new federal loan limits made it easier for Gray to say, “no, we can't do this,” she said. “If we didn't have the cap, it still probably would have been the same decision, but it would have been a lot harder, a lot more guilt.”

In the end, Scott decided to go to Savannah State University, an HBCU nearby, and live at home, at least for his first year.

“I’m excited,” he said. “I've toured campus, it looks really cool. I think I'll have a good time when I'm there.”

And with a state merit scholarship and a band scholarship, he’ll get to go for free.