Student News >> Browse Articles >> Financial Aid
Student Loans Are an Expensive Reality for Many
McClatchy/Tribune via Yellowbrix
August 05, 2009
Getting the first loan seems a little bit like magic. For students who can’t afford the school of their choice, student loans are a viable alternative. Apply for a loan and the money seems to appear as if out of thin air. But after the second one, it begins to sink in. At some point, the money has to be paid back. All of it.
“Even though right now I’m set on going into a secure field, I still constantly feel the weight on my shoulders,” said Cecilia Wright, a pre-med student at Yale University. “Knowing that I will automatically owe money when I graduate is daunting.”
Between the 2000-01 and 2006-07 school years, the College Board Trends in Student Aid report estimated 60 percent of recipients of bachelor’s degrees borrowed money to pay for their education, with an average debt of about $22,700.
In the current economic environment, paying for school is a more difficult issue than ever, and no one feels it more than students whose parents are unable to provide a helping financial hand in their college years.
“The U.S. Department of Education has reported that more than a million more financial aid FAFSA (Free Application for Federal Student Aid) applications were filed during the first quarter of 2009 compared to the first quarter of 2008 _ a 20.8-percent increase,” said Allesandra Lanza, public relations manager for American Student Assistance (ASA), a loan guarantor that now serves as a source of information for students as they go through the loan application and repayment process.
But FAFSA, which uses a household’s financial information to estimate your Expected Family Contribution (EFC), does not always cover all college costs. Many students must take out loans for what FAFSA does not cover.
Lisa Westermann, a spokesperson for financial services company Wells Fargo, said they had given a total of $30.5 billion in student loans by the end of 2008, serving 2.4 million families. According to its Web site, Wells Fargo originates more than $4 billion per year in private and federal loans.
College students across the country must answer the same question _ how are they going to pay it all back?
With the current economic crisis at hand, current students face an unsteady job market, and loan repayments could be more difficult than ever
“We are certainly starting to see a rise in more people having difficulties repaying their loans because of the economy,” Lanza said.
Lanza said a projection from the Department of Education predicts the cohort default rate, which tracks loan recipients in their first two years of repayment, will rise to 6.9 percent from last year’s 5.2.
Henry30
3 months ago
Just further evidence here of how the economic system is rigged to keep rich people rich and maintain enough Serfs for future contributions. As a working parent with one in college, I believe two years of community college saves a ton of money. Too bad we didn't opt for this from the start...
StephanieW424
3 months ago
What are the government doing to help us with repaying the student private loans and will the government implement some type of new law which will drop all accured interest and force the finacinal institution to accept affordable payments base on your income?
RashaanG2
3 months ago
I am a single mom with an 18 yr old son who went off to a very expensive private university and ended the year with failing grades. Now I am bankrupt I cannot cosign any loans for him so his only option is to move back home and try to attend community college. It is sad that our children can no longer attend college without the burden of student loans. I fear what is happening to our education,and the idea of financial aid is a joke.
JessicaK1595
3 months ago
My daughter will be a college freshman this fall. The experience so far has been a royal pain!!
Waiting forever for acceptance or not, applying for scholarships, and now the nightmarish loan
process!!!!! Since when is a "Financial Aid Award Letter" just a loan notice?
She interviewed at her schools career day with several different colleges, most of them where
in state. She was told there would be scholarships offered. LIERS!!!!!!!!! God knows we've been
all over the internet applying for scholarships,nothing!!!!
Even the school we've chosen no scholarships available at this time. I seriously question this.
How about some information on here about loans we could all really use.
NikN2
3 months ago
Dear Fikiri,
Are you insane? Please take down this scam. As to the article -- tell us something we don't know, like what is in the works to break up this usurious system. My son is just entering college and my wife works at a university, so we see the scam, the heartbreak, and the manipulative tactics of those who claim to be helping students with "financial aid." Calling usurious loans to kids who work at Subway "financial aid" is like calling having no job being "between opportunities." It is all a venal way to convince young people that they are serving their hope rather than destroying it by taking out loans that will burden them for the rest of their lives. Obama clearly is a better friend to students than GW was, but he is a better friend yet to the banks. Forget "cash for clunkers." How about "cash for college?" I weep for the kids and I gnash my teeth at the system that somehow has gotten put in place that indentures them to a bank in order to get a college education. What the hell is wrong with my country?
NullN464808
3 months ago
I would like to know if there is a way for a young person to have student loans cut down or make smaller payments. My sons loans have come due & he doesn't have the income to pay it. We as his parents are all ready paying some of it. Now it's getting difficult for us too, as my husband has been laid off for 3 months now.My email shortykins@gmail.com
HelenW
3 months ago
The biggest problem is the word FinancialAide it's advertisement ,,,people think it's only free money to go to school , when really these are loans that have to be paid back. , unless you get grant money to cover it all The only people i hear get full grant money for school is always people from other countries. I'm a homemaker which mean i don't work . just got Divorce and needed to go to school ,,, They still trying to add my ex husband income to be my income ,which is making me have to borrow more to go to school . this is not right ,, I'm telling these FA people i don't work . so i'm not trying to borrow all that money , I know a person who live in philadelphia low income got 9 kids and they have to pay for their daughter loan for school. certain things in this country is just not done right ,,,when it comes to education. my daughter lost her job , and owe student loan and when she apply for unempolyment they took more than half the money from her . she didnot have enough money to live off of . she lost her car she lost her apartment ,. if they didnot take so much of the unempolyment check ,she would have at least been able to keep her car to keep looking for another job...
FloreliaS
3 months ago
I have a loan of 13,800 for my A.S. degree and another 32,000+ for my bach. Good luck for me in the future. The only thing that I keep in my mind is that it is worth it for my education. I'm first generation in my family to go to college.
RenealdB
3 months ago
Help??? I have a student loans from 1989-90 started out at $3000.00 the school closed and tried it again $3000.00 and it payed off. I have paid off one of the loans yet through the balance has been lingering to to loss of jobs -a bout with illness and have paid into the load as well as for the last ten years they have taken my taxes.. I still owe $15000 to this loan-it is being sold in this manner-1 taxes are taken for the amount then applied to the interest only-at which point the loan is sold to a sister company and then the 25% interest fee is added again to the loan I have tried to get this worked out -- What do I do - I am 49 years old ?
TysonM56
3 months ago
For some people this is the only way they can afford school.
NullN438854
3 months ago
Avergae3 debt of $20k, yeah right. The other half parents financed. My poor son is $46k in debt already from PITT - 2 years in. I tried to explain to him (an 18 year old that time), his college education is worth every penny, but that there are cheaper options to the exorbitant amount some of these colleges are charging. If you child is not serious, don;t send them to expensive schools, and thank God I did not finance his first 2 years of "barely passing" grades. He has 40 years to pay off his potential $100k education bill, I have 20 years to retire. Retirement comes first for me. Education comes first for him. He has woken up, switched to a cheaper school.
FikiriK
3 months ago
i m a FIKIRI KILIMO from TANZANIA i may loan
FIKIRI KILIMO
POBOX 25120
DAR ES SALAAM
TANZANIA