Loans Weighing Students Down

According to a Pew Research Center study, 19 percent of the nation’s households owe student debt.

Mark Moore, professor of finance, said students usually have a problem with borrowing too little or too much.

“Some forget they are going to school to prepare for their future career,” Moore said. “Instead, students get overly focused on the job they are using to pay for tuition.”

Moore said this adversely affects students’ grades, which should be their number one priority. If their grades dip, he said, students should take out a loan to take off some of the burden.

Adam Kirsch, a junior university studies major from Spring, Texas, said dealing with tuition has been stressful, but he has still been able to maintain good grades despite having two jobs.

Claudia Gillespie, an adviser at the Office of Financial Aid, said a helpful alternative to working outside school is work study because the students work on campus with a flexible schedule.

Moore said students need to be realistic about how many loans they take out and understand the consequences of borrowing money.

“If a student uses a bunch of loans to get through school to become a teacher, they are going to have a difficult time paying those loans back,” Moore said.

Kirsch said repaying the loans will not be too difficult because students do not have to begin paying those loans until six months after graduation. Kirsch said he is using two loans to pay for the entire school year.

According to the Pew Research Center, having to repay student loans has made it more difficult for 48 percent of those who used loans to get through college to pay other bills.

Gillespie said students do not always take advantage of the federal assistance, such as the Free Application for Federal Student Aid.

“Every student should make it a must to complete their scholarship and FAFSA applications before the deadline,” Gillespie said. “This is especially important for the state and institutional grants because they are first-come, first-served.”

Moore said the lack of financial literacy also might be a factor in the difficulty students face paying for tuition, but a mandated financial aid course would not address the problem.

“The course would not be helpful to students because they would not see how it is relevant to them,” Moore said. “Maybe have the course given when financial aid is due, so students realize the importance.”

Kirsch said he has no trouble with his money because he tries to be as frugal as possible with purchases.

However, it is unrealistic to avoid loans unless a student is consistently getting scholarships of more than $3,000 along with grants, Gillespie said.

“More than money, time needs to be budgeted properly because students think they are Superman,” Moore said, “but the reality is there are only 24 hours in a day.”

 

by Dawit Haile
Contributed to The Hub by Jour 2410

 

About Dawit Haile
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