Many students pay for college by taking out student loans. Currently, the number for national student loan debt is estimated to be over $1.2 trillion, according to FinAid statistics.
Last Tuesday, the U’s Personal Money Management Center sponsored a presentation entintled “Borrow Wisely” as a way to help shed light on the growing problem with student debt.
Sumiko Martinez, a Ph.D student at the U and the speaker at the event, said students tend to get loans without sufficient understanding of the loan process.
“I didn’t have a lot of this knowledge when I was an undergrad,” Martinez said. “I walked into a lot of things blindly.”
Of the 25 people who attended the presentation, nearly all admitted to having taken loans out to pay for school. However, only two of these students said they knew the exact interest rate of the loans.
Chelsea Day, a sophomore in recreational therapy, attended the presentation. She said she had never taken out loans for school, but the presentation had provided valuable information if her situation ever changed.
“I think it can be really easy to just get a bunch of loans, buy a car, take a loan out for tuition, even if it’s federal,” Day said. “It’s important not to go overboard.”
Martinez said the pros and cons of a student loan depend on the person, situation and school. Her advice is to avoid taking out a loan if possible.
For students with loans, Martinez said the best action is to pay off interest while in school, as it will save money overall.
Tuition prices are rising, according to the National Center for Education Statistics. As a result, student loan debt is going up as well. For this reason, student loan debt is being referred to as a national crisis.
A factor of this debt is the price difference between in-state and out-of-state tuition. Although student loans are supposed to make an expensive college possible, loans can actually prevent some students from leaving their home state, such as Charlie McDonald, a freshman in pre-business.
McDonald said student loans affected her decision in which college to attend.
“I had to give up my top choice school and stay in state,” McDonald said. “That was kind of a bummer. It sucks because your whole life growing up you are told that you need to get a good education to get a good job. And in order to get a good education, you end up having to take out loans.”
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