By Toma Lynn Smith
Students have a lot to think about when financing their education.
Many student loan lenders provide their borrowers with information.
The University of Louisville requires students to complete counseling by reading materials and passing quizzes online. Although this is done, many students aren’t aware of the consequences.
Citibank states in the article, “Explore Your Funding Options” on http://www.studentloan.com, “government and school sponsored funding” as well as “tuition payment plans” for paying for college are a good idea, U of L offers these services.
The tuition payment plan means students pay a third of their tuition with a $25 processing fee, then pay the balance in two payments before the semester ends in the Bursar’s office.
Citibank stated that credit cards should be avoided because, “This option is typically not the best choice for students or their families as the interest rates on credit cards tend to be high.”
Jasmine Butler, a freshman sociology major, turned to student loans. “I didn’t have a choice,” Butler said.
Butler did not qualify for financial aid such as scholarships and grants, nor did she have the income to fund her college education.
Elaina Pitts, a senior sociology major, said the reason for borrowing money is simple. “The cost of education has skyrocketed, tuition goes up every single semester.”
Heyward Boyce, a junior communication major, recently visited U of L’s financial aid office for the first time to get assistance for his education. Boyce said, “Honestly I just want free money, if it’s going to be a student loan, I don’t think I’m going to do it.” He said he could keep getting assistance from his father if student loans were all he qualifies for. Boyce wants to avoid the expensive pressure of dealing with paying back student loans.
Students should research their options.
Knowing the difference between subsidized and unsubsidized is crucial.
The Guide to Federal Student Aid (2007-08) stated that subsidized loans are based on need and interest is paid by the government while in college, whereas an unsubsidized loan’s interest is paid by the student and isn’t based on financial need.
In addition to the type of loan chosen, students should always stay on top of how much is being borrowed, and the total that will be expectd to be paid back after college.
“It is recommended that you limit your borrowing so that your monthly payment is no more than 10-15 percent of your monthly gross salary,” stated The Student Loan People.
For example, if a student’s expected salary is $40,000, the manageable debt they could handle is approximately $27,000. The “maximum manageable monthly payment” on that is $333.33, which can be avoided or reduced with careful planning.
Meet with a financial aid counselor or go to the many Web sites provided on the U of L’s financial aid Web page to get advice for managing your finances before it’s too late.
