Whether you're a young high school graduate, displaced worker, or just a person who wants to climb the economic ladder, going to college seems like the perfect resolution to the lack of job availability in today's recession.
However, do you really understand the financial aid system? Did you know when you sign student loan papers that it could lead you to a future of financial and economic crisis?
Charles Madriaga counselor for Career Services and Counseling Center at LBCC, expressed his concern about the absence of communication and education between the college and students, especially in regards to the financial burden that the student will be assuming with grants and student loans.
Madriaga and financial aid advisor Michael Butke recently offered a workshop at LBCC answering many questions surrounding financial aid.
However, with the lack of funding available for college-student communications, many students were not aware of this much needed workshop.
Madriaga says, "Some of the biggest problems students face today is that they have a lack of understanding of what grant and student loans are used for. How they the student should budget their money, what they will have to pay back and what the ultimate cost of their college degree is."
Both Madriaga and Butke believe that every student should meet with counselors before signing for student loans, especially when it comes to the cost of their education. They say the students need to learn to budget and understand the variety of options available to them.
For example, did you realize the cost of an Associates Degree at LBCC if you factor in tuition, books, personal and living expenses can be up to $29,000?
In many situations, students have a combination of different loan options available to them.
For example, a dependent student with a high financial need who received the maximum annual loan limits for two years, would have to repay $8000 in subsidized loans and $4000 in unsubsidized loans. The total repayment over 10 years would then be the following:
Subsidized: Monthly Payments $92.06, Months in Repayment 120, Total Amount Paid: $11,047.20. Unsubsidized: Monthly Payments $50, Months in Repayment 107, Total Amount Paid: $5343.75.
So this student would be paying up to 10 years at a rate of $143 per month for an approximate total of $16,400.
One must realize if you fail, do not keep a 2.0 or higher GPA, or drop out of school, you still have to repay the loans you already received.
If you default on your loan, it can destroy your credit. There are programs that allow you to defer payments if unemployed but the interest continues to accrue often doubling the payback amount.
Kristi Murphey 46, instructor at LBCC has over $100,000 in student loans that she is paying back over the next 30 years. She said "I am actually considering going back to school and getting another doctorate so that the payments of my loans will stop for a while." However she will still be paying the interest which alone is $300 a month.
Jason Nash, 44, of Albany received a bachelor's degree in 1988 at Oregon State University. When asked about the comparison of the college of yester-year, he made a valid point when stating, "Today many are using college as a form of unemployment but at what cost? When I went to college I was required to take a class that made me aware of my personal financial cost of college.Today most students do not realize they are getting into major debt to obtain a college degree. It is the next recession bubble it will eventually burst and add to the already growing destruction of our economy!"
In the current state of the economy there is not a guarantee of job placement with an associates, bachelor's and even with a master's degree. So what can a potential new or current student do to avoid becoming one of the governments 7% or higher who default on their loans and end up in such a financial crisis that their lives are destroyed?
Educate yourself! Think about the amount of loans you are getting compared to your earning potential when you graduate.
Ultimately you are responsible for your own future. This article may have you rethinking your decision to either stay in or drop out of school. Either way it is imperative to understand your price of admission or face a potentially disastrous financial future after you graduate!
Financial aid tips for students:
1. Make an appointment with a financial aid counselor and career service counselor to help assist you with your financial future as a student
2. Have a voice and get involved! If students ask for more financial aid workshops and get the word out about the critical need and importance of these issues then there maybe be more funds allocated to bridge the knowledge gap. Contact the Student Life and Leadership.
3. Don't delay, currently there a large budget cuts happening at LBCC. The Career Center will be limited in counseling accessibility and times.
Apply for as many scholarships as you can and keep applying.
Financial Aid Center at LBCC , for help and drop in times call: 541- 917-4850
http://www.linnbenton.edu/go/financial-aid:
Counseling Center at LBCC, appointments 541-917-4780
http://www.linnbenton.edu/go/counseling
Repayment of loan options,
http://www.direct.ed.gov/RepayCalc/dlindex2.html.
Repayment of loan calculator,
http://www2.ed.gov/offices/OSFAP/DirectLoan/RepayCalc/dlentry1.html
Important Reads:
CNBC "Lots of Money for Student Loans—But at What Cost?" http://www.cnbc.com/id/40681252
CNBC "The Debt That Won't Go Away"
http://www.cnbc.com/id/40680905
