By Christian Trinh
The Cure for Student Loan Debt
In America, the student loan debt is over $1.5 trillion. Based on this statistic, many students have been carrying a financial burden. However, there are ways to dig out, no matter how badly you are in debt.
Tanya Keenan, assistant director of enrollment services at Delaware County Community College, said there are ways out of debt. But students must know, “It is a long process.”
Keenan knows about student loans, and the debt students take on because she has worked in this field for a decade. She had loans when she was in school, so she empathizes with students who have loans today.
Keenan offered answers to help students better understand debt and other financial advice.
Where should students get their loans?
Students should always fill out the Free Application for Federal Student Aid form. It’s the best place to get loans because it offers cheaper rates than private lenders. Private loans require credit that most students don’t have, so you would need a cosigner.
What percentage of DCCC students receive financial aid?
A good portion! Sixty percent of students get the Pell grant from financial aid.
What’s the typical lending rate for government and private loans?
The federal rate is always the same. The fixed lending rate of 3.73% will never go up. Private loans come from banks, and they dictate the rates. The school does not get involved with private loans, so we don’t have information on them.
What is a “should not do” when applying for student loans?
Never take out the maximum amount of money. Never take out more than you need because the loan money can run out. Make wise academic decisions like going to an affordable college while taking core classes. Always take advantage of free money like Pell grants and scholarships.
When is the most appropriate time for college applicants to get student loans?
There is no specific time for FAFSA. However, if there is a deadline for a loan, get it done before then.
Is it recommended to work more than one job to pay off extreme student debt?
You should maintain a balance when paying off extreme debt: mental health, school work, and financial work. If you work a lot, then take fewer classes to compensate.
Should a student drop out of school to pay off loans or continue enrollment?
It’s better to finish school because loans are deferred if you are struggling to pay FAFSA loans.
Why do you think the student debt problem is so prevalent in America?
First, the cost of education went up. There also are other expenses you have to worry about, not just school. The school itself might not be expensive, but everything around it might be.
What’s the worst-case scenario when you default on a loan?
Defaulting can lead to penalty fees. They can add up to double the amount to pay off the loan. It also affects your credit score, making it hard to get loans. Specifically, if you default on federal loans, the government can garnish wages from your job.
Are there any typical behaviors when students are about to go into loan debt?
Leaving school without graduating or transferring increases the chance of going into default. There can also be changes to job status, leaving people unable to pay off loans.
If students want to refinance preexisting loans, what should they do?
Contact their loan servicer or private lender after first checking with the federal servicer. If they don’t like the options, they can turn to a private lender instead.
Do you have any advice for students with existing loan debt?
Prepay loans and make extra payments. If you have an extra $50, put it towards one of the loans, you will pay off first.” Pay the minimum amount for each loan.
Is there anything missing that you would like to add?
Students should use the finance offices at colleges. They are a free resource that helps students with their financial needs. Use the advice given there more regularly rather than last second.