According to the latest survey results that were just released by Sallie Mae, here’s how the average American student pays for college: students borrow 23 percent, parents borrow 16 percent, 15 percent comes from grants or scholarships, 10 percent comes from friends/relatives and 32 percent comes from parental income.

So, on average, students and parents borrow 39 percent of the cost of college.

Unfortunately, it’s no secret that our buy-now-pay-later philosophy may not be such a great idea after all. Excessive debt has overwhelmed ordinary Americans and sunk the greedy institutions that not only lured us into borrowing more than we could afford but convinced themselves that betting on burdensome debt was a no brainer.

The whole sub-prime mortgage fiasco was predicated on the idea that housing prices will always increase in value and that those who can’t afford the adjustments on their adjustable rate mortgages can always sell their house to repay the bank. Unfortunately, we now know what happens when the value of your home plummets at the same time as your no-money-down home loan skyrockets.

Could the same thing happen to students loans?

As college keeps getting more expensive (according to the most recent data from the College Board, tuition and fees continue to outpace inflation, rising by about 6 percent each year at four-year colleges), is it possible for students to reach a point at which their debt is bigger than the value of their education?

Here’s the good news:
Since most experts estimate that four-year college graduates will earn approximately $1 million more than high school graduates over the course of their lifetimes on average, it would be pretty hard to rack up more debt than the value of a college education. In 2007-08, average room, board, tuition and fees for a public four-year college was $13,589 a year. The average full-time student at a public four-year school receives about $3,600 in grants and tax benefits, which lowers the average annual college cost to just about $10,000 or $40,000 over four years.

Even if a student borrows the entire $40K and we factor in interest on that loan, that’s still way short of the $1 million value-added benefits of a college education.

This “good news” aside, I thought that the most interesting stat from the Sallie Mae report revealed that 70 percent of students and parents said that a student’s expected post-graduation income did not make a difference on their borrowing decisions.

Part of me understands this philosophy. Just because you’re not in the Future Business Leader of America club doesn’t mean that you’re not entitled to attend the college of your dreams, right?

But then I wonder if this isn’t the same kind of thinking that has us destroying our own financial systems.

All I’m saying is that it seems a little reckless to completely disregard the potential risk of any investment–especially when the latest numbers from the Department of Education reveal that student loan default rates may be starting to rise. Because the fed has a really skewed way of reporting default rates, I’ll give you some numbers instead of percentages:

204,507 borrowers who had been due to begin repaying their federally subsidized loans in the fiscal year that ended September 30, 2006, defaulted within two years

So we are talking about hundreds of thousands of new graduates who simply could’t afford their federal debt right off the bat.

And sit down for this: these figures don’t take private student loan debt into account.

Everyone seems broke these days. Even the Federal Pell Grant program, which gives low-income students relatively modest grants for college, is $6 billion short because 800,000 new students qualified this year, according to the latest numbers (blame it on the bad economy creating more “low income” students and adults who are going back to school).

Maybe we’ve become a nation of whiners because we have so much debt to complain about.

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Kidz Today is a column about youth and education by Joie Jager-Hyman