Student loans are beginning to be more and more of a business for companies. The low interest rates (although they aren’t as low as they were 3 years ago) and the accessibility of the loans have made them a lucrative option for students. Many students see these loans as a better option than credit cards, as they should.
As costs go up to attend college and to live away from home, companies are capitalizing by partnering with universities and colleges to fund these loans.
According to FinAid, few students can afford to pay for college without some form of education financing. Two-thirds (65.6%) of undergraduate students graduate with some debt, and the average federal student loan debt among graduating seniors is $19,202 (Stafford and Perkins Loans).
The Chronicle of Higher Education states, concerned about the deals that some lenders have struck with financial-aid administrators to win student-loan business, U.S. Education Department officials may bar colleges from recommending fewer than three lenders to students who must borrow to pay for college.
Department officials also may rewrite regulations that forbid student-loan providers from offering certain inducements to colleges to secure applicants for federal loans. The current rules are vague, and the agency would like to be clearer about what types of activities are banned.
The blog Simple Kind of Life has an interesting post about student loan consolidation becoming big business now-a-days. It couldn’t be any more on point. She describes her experience as she got her AA degree.
If you are a student, do your best to limit the amount of loans you take out. If you don’t need that money, it’s probably better to take it out when you really do need it. It’ll save you from interest accruement and a lot of heart ache after graduation.
4 thoughts on “Be Cautious With Student Loan Debt”
True true. I have to say that the structure of tuition/loans is a sham. I have completed a BA, MA, JD and PhD (as of may) and my loans, as you can imagine, are substantial. Almost all of my debt stems from law school where tuition is raised to substantial levels despite the fact that the faculty is not paid THAT much more than any other department. In law, and medicine it is seen as desirable to put students into major debt so that they are obliged to log serious hours working for the highest bidder afterwards. Were the education cheaper, dear god, lawyers and doctors might not work 100 hour weeks.
Bitter on this end. But nobody put a gun to my head!
Ive read your commnets about having a substancial amount of debt due to student loans. Here is a bit of advice before beginging to pay back your student loans, make sure that your lender sends you the promisory notes for your exsisting loans. Also ask for the dispersement notes, to see how much money was actually sent to you. I have a friend who also has a substantial amount of loans that need to be paid back. Her lender decided to send more money than was actually asked. She has, on numerous occasions, asked for copies of the promissory notes and they refused. She has contacted the U.S dept of education as well as laywer.
I’ve gone mad and decided to move to Ireland for 2 years for grad school. I’ve taken on loads of student loan debt this year, but I am looking for a good paying job this summer in Dublin in public policy so I don’t have borrow as much money for next school year.
i am doing a story for my local news station about people paying too much for student loans. does anyone with this problem live in the dc, northern virginia, maryland area?