Money burning a hole in your pocket? Not college students. More and more of them are having to take out loans to pay for school.
The number of college students who take out loans to pay for school has steadily increased in the past six years.
Missouri Western, however, is well below the national average. At Missouri Western, 56.42 percent of students have loans, with an average amount per person of $6,535, as of the 2010 school year. The total amount of loan money taken out by Western students is $21,782,317.
National Postsecondary Student Aid Study (NPSAS), a nationwide study conducted by the U.S. Department of Education every four years that determines how college students pay for school reported that “At public universities, [(such as Missouri Western)] average [student] debt was $20,200” in 2008, which is much higher than Western itself.
The most common student loans, federal loans require no co-signer. They do not require a good credit score either. Federal loans have a grace period of six months after the borrower’s date of graduation or six month after they drop below the status of a part-time student. 12 credit hours is the lowest amount of hours a student can take to be considered a full-time student.
Alternative types of student loans are private student loans. Private student loans have a higher interest rate than federal loans. According to campusgrotto.com, these types of loans have become increasingly popular. They reported that “Last year, students borrowed $18.5 billion from private lenders, up 6 percent from the 2005-2006 school year, and now equal to 25% of all student loans in America.”
The terms of student loans can be found under Title IV of the Higher Education Act of 1965. Concerning the payments of loans and defaulting on loans, the website reported that “[Title IV guaranteed] repayment to the lender if a student defaults. Because the loans are guaranteed by the US Government, they are offered at a lower interest rate than the borrower would otherwise be able to get for a private loan.”
The two different types of federal loans are subsidized and unsubsidized. While the borrower is in school, the government pays all of the interest on unsubsidized loans, making them the better of the two choices if one must take out a loan to pay for school.
There are many ways to avoid student debt, or at least lessen it, if one learns to manage their money wisely.
According to George Mannes’ article “Earning a Degree in Debt”, when it comes to student loans, the borrower should set limits on the amount they take out and when it comes time to pay the money back, make payments early and make them often.
FinAid.org advises taking out no more than what is needed to pay for school when taking out a loan, take out federal loans before private loans, choose to attend a less expensive school, cut unnecessary costs, work a part-time job, talk to your financial aid department and consider saving for college by investing in the 529 College Savings Plans.
Concerning taking out loans and paying for school, one business major wishes she would have done things differently. “If I had it to do all over again, I would not have taken out student loans no matter what,” said sophomore Lisa Clifford. She advised that students find their books as cheap as possible to help save money. “I would have bought my books online, from the beginning, instead of at Missouri Western’s bookstore,” said Clifford.
Another student had a rather comedic view of student loans. “Student loans are like S.T.D.’s,” said freshman Mike Nagel. “You don’t know if you’ll get them, you don’t know how much and when or if you can get rid of ‘em, but it’s a risk you have to take [to get through school].”
The number of college students who take out loans to pay for school has steadily increased in the past six years.
Missouri Western, however, is well below the national average. At Missouri Western, 56.42 percent of students have loans, with an average amount per person of $6,535, as of the 2010 school year. The total amount of loan money taken out by Western students is $21,782,317.
National Postsecondary Student Aid Study (NPSAS), a nationwide study conducted by the U.S. Department of Education every four years that determines how college students pay for school reported that “At public universities, [(such as Missouri Western)] average [student] debt was $20,200” in 2008, which is much higher than Western itself.
The most common student loans, federal loans require no co-signer. They do not require a good credit score either. Federal loans have a grace period of six months after the borrower’s date of graduation or six month after they drop below the status of a part-time student. 12 credit hours is the lowest amount of hours a student can take to be considered a full-time student.
Alternative types of student loans are private student loans. Private student loans have a higher interest rate than federal loans. According to campusgrotto.com, these types of loans have become increasingly popular. They reported that “Last year, students borrowed $18.5 billion from private lenders, up 6 percent from the 2005-2006 school year, and now equal to 25% of all student loans in America.”
The terms of student loans can be found under Title IV of the Higher Education Act of 1965. Concerning the payments of loans and defaulting on loans, the website reported that “[Title IV guaranteed] repayment to the lender if a student defaults. Because the loans are guaranteed by the US Government, they are offered at a lower interest rate than the borrower would otherwise be able to get for a private loan.”
The two different types of federal loans are subsidized and unsubsidized. While the borrower is in school, the government pays all of the interest on unsubsidized loans, making them the better of the two choices if one must take out a loan to pay for school.
There are many ways to avoid student debt, or at least lessen it, if one learns to manage their money wisely.
According to George Mannes’ article “Earning a Degree in Debt”, when it comes to student loans, the borrower should set limits on the amount they take out and when it comes time to pay the money back, make payments early and make them often.
FinAid.org advises taking out no more than what is needed to pay for school when taking out a loan, take out federal loans before private loans, choose to attend a less expensive school, cut unnecessary costs, work a part-time job, talk to your financial aid department and consider saving for college by investing in the 529 College Savings Plans.
Concerning taking out loans and paying for school, one business major wishes she would have done things differently. “If I had it to do all over again, I would not have taken out student loans no matter what,” said sophomore Lisa Clifford. She advised that students find their books as cheap as possible to help save money. “I would have bought my books online, from the beginning, instead of at Missouri Western’s bookstore,” said Clifford.
Another student had a rather comedic view of student loans. “Student loans are like S.T.D.’s,” said freshman Mike Nagel. “You don’t know if you’ll get them, you don’t know how much and when or if you can get rid of ‘em, but it’s a risk you have to take [to get through school].”
Journalism 202
Enterprise Story - Student Debt
November 9, 2010
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