America’s Student Loan Terror

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America’s Student Loan Terror

Photo: The Century Foundation

Photo: The Century Foundation

Photo: The Century Foundation

Photo: The Century Foundation

Larry Jia, International/National News Editor

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Almost a decade ago, America’s student loan debt exceeded domestic credit card debt for the first time. Since then, four-year college tuition has only continued to rise. Today, student loan debt totals over $1.5 trillion, averaging approximately $39,500 per student in 2017. Studies indicate that approximately one in six marriages end in divorce because of student loan debt. Many American teenagers, including those at Maggie Walker, struggle with this fundamental issue: how am I supposed to pay for college? From parent aid, Virginia529’s, and working part-time, students continue to find it difficult to cover a $60,000 per year tuition without taking loans. Below are some tips that might be useful.

It is not too late to start saving. By accumulating a buffer before college even starts, students can reduce their debt load. Even $100 per month into a reasonable savings account or mutual fund can save a substantial amount of money that does not have to be paid back with interest. Work a part-time job during school and consider a full-time job over the summer to begin saving money for college.

Alternatively, consider applying for scholarships. Many scholarships have no application fee and only consider need, essays, and academics. Resources are linked below this article for scholarship searches. The applications may only take a few hours but can help significantly in paying for college. Some schools will reduce the amount of need-based financial aid with the addition of scholarships, but many colleges will maintain the aid and allow the student to reduce their total amount of debt.

Some colleges have a “no loan” policy in which they offer substantial need-based financial aid packages to students. If the tuition is still unreasonable, consider attending a different school or starting at a community college. Many community colleges allow students to transfer to four-year colleges after meeting certain requirements.

If loans are required, apply for federal student loans first, which offer lower interest rates and better repayment requirements. The Stafford, Perkins, and PLUS loans are good places to start. Also, sign up for FAFSA, a free service that connects students to state and federal scholarships and grants for free.

In college, consider student spending habits as essential to student loan management. At the end of a ten or twenty year repayment period, every dollar of student loan money spent will accumulate in approximately two dollars in repaid money. A four dollar Starbucks drink would cost approximately eight dollars including interest. Borrowing more than $10,000 per year in loans may lead to default, which will impact one’s future ability to buy a house, pay for reasonable insurance, and even find a job.

The student loan situation in America is a crisis. Students are borrowing more and more in debt as the cost of higher education continues to rise. Without a major change in government funding towards secondary education, students and families will have to be more self-sufficient in accruing enough funds to pay for college. Generous programs and scholarships are available, but as students, we need to be proactive in looking for these opportunities. Maggie Walker counseling also has great resources available to all students- utilize them as a resource for further help.

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