The Exponent - columns


04-01-2005	Previous edition: 03-31-2005

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Student loans intensify graduation stress

I can tell it’s almost that time.

The weather is getting warmer, resumes seem to be the only documents spewing from my printer and senioritis has kicked in.

Oh, and there’s the mailbox that’s filled to capacity each day with student loan consolidation information and other miscellaneous graduation mail leaving me and many other graduating seniors asking the same anxious questions: how are we going to pay for the best four (or five … or six) years of our lives?

Getting into college seems to have been the easy part compared to what lies ahead. Uncertainty about jobs and income are only fueling upcoming graduates’ anxiety toward the future. Is approaching our post-collegiate years as daunting as a task as it is made out to be?

I think that all depends on how well we prepare for what’s next. I’ve seen the student loan payments my brother has been paying and it’s hard to imagine how I won’t be drowning in debt for the next few years, especially on a teacher’s salary. I’m not the only one either. According to finaid.org, nearly two-thirds of undergraduate students graduate with some debt, and the average federal student loan debt (ex. Stafford and Perkins) totals $16,888.

There are some viable options that can help soon-to-be graduates. As you may already know, interest rates for certain loans are at an all-time low. But starting July 1, 2005, this is about to change. Specifically, Stafford loan rates are expected to increase, according to the Division of Financial Aid at Purdue. Seniors should consider locking in a record low interest rate through a federal loan consolidation prior to any increase in rates. Joyce Hall, executive director of financial aid at Purdue, suggests that students contact Sallie Mae, which is the University’s loan servicer. Most students have borrowed under the University’s preferred lender program, but for those who did not choose one of the University’s four preferred lenders, then you would have to contact the lender that you chose. For those students who did choose one of the four recommended by Purdue, you can contact Sallie Mae regarding loan consolidation at 1-800-448-3533.

You may be asking about all the junk mail that you’ve been receiving from random companies claiming to be able to consolidate your student loans for a low rate. And the fact of the matter is that these mailings are, for the most part, junk.

Hall said Sallie Mae is the largest loan consolidator in the country with many years of experience in the loan industry. They offer an online application, and it appears as though they are the most reliable and knowledgeable company to take on the task. While many graduates and future graduates are most appreciative of the low interest rates, you have to wonder if there is more that can be done to make college more affordable and accessible to the nation’s students.

Students already have a grace period in which they are permitted to defer student loan payments for six months after their graduation. But is this really enough time for college graduates to start paying back four years of debt? It seems that with the job market and economy as it is, many recent college graduates are finding it more difficult to find a steady-paying job right away than before. I know many graduates who are still struggling with their professional decisions and are often second-guessing their career choices. While the responsibility of paying back student loans is necessary, a grace period of a year should be created, in order to ensure that graduates are able to fulfill their financial obligations without having to do anything drastic, such as filing for bankruptcy.

The fact that students are taking out so many loans these days is a result of increasing tuitions and a lack of grant money keeping in pace with such costs. The cost of higher education is increasing across the country but the federal government has done very little to maintain and increase federal grant aid. Many universities are trying to offset the lack of federal aid by raising more money for student scholarships, but this doesn’t have the same impact on students as federal support would. Isn’t it a little ironic that our government doesn’t place enough emphasis on educating the masses? Providing more aid would allow more students to go to college, and this would eventually result in a greater economy. Until then, it is up to college students to take out student loans and find any means possible to pay for college. In the mean time, a little consideration should be made to those who are trying to find a job, pay off loans, all while adjusting to a life full of responsibility.

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