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opinion
Loans leave college
students in debt
By Adrienne Figueroa
On-line Forty-Niner
Approximately 39
percent of U.S. college students who take out school loans
experience unmanageable levels of debt after graduation, with
their monthly payments exceeding 8 percent of their monthly
incomes, according to a recent report issued by the California
Public Interest Research Group.
The analysis, provided by the student-operated, public interest
advocacy group indicates that the average national student
loan debt has almost doubled since the 1992-1993 school year
to $16,928.
Meanwhile, at CSULB, the student loan debt from July 2000
to July 2001 was substantially lower, averaging about $5,875,
said Financial Aid Loan Coordinator Lorraine Perez.
In an effort to minimize debt, the financial aid department
advises students to only accept money that they think will
be necessary to fund the semester.
"We try to encourage them to only borrow what they need,"
Perez said.
Furthermore, the department is required by federal law to
provide financial counseling before a student takes out a
loan and before he or she graduates. The service is designed
to furnish the borrower with information on deferment, payment
plans and other details on debt, Perez said.
Availability of these options is crucial because more students
rely on loans than on grants to fund their education. Last
year alone, CSULB dispersed $50 million in loans, Perez said.
Graduates, undergraduates, independent or dependent students
may all apply for grants, which are based on financial need.
However, not everyone is eligible.
When students do not qualify for grants and the maximum amount
on a school loan is not sufficient for educational as well
as daily costs, oftentimes they will turn to credit cards
for assistance, said Laura Kerr, director of governmental
relations at the California State Student Association.
This decision can prove to be of detriment to cardholders
for several reasons. First, the interest on a credit card
is typically a great deal higher than the interest on a school
loan, and many students find they are unable to make the monthly
payments. Students also may have to decline internships in
their fields of study that may benefit them later because
they need to work at a job to pay off the debt now. In the
worst case scenario, students may have to file for bankruptcy,
Kerr said.
"It's really tempting in our society to buy that new
CD or go on a trip or go out to dinner," Kerr said. "Live
within your means."
Another repercussion of student debt is that students may
have to reconsider the line of work they are planning to enter
if the pay is not very high, said Merriah Fairchild, higher
education advocate at the California Public Interest Research
Group.
"That's a tragedy not just for those students, but for
the country overall," Fairchild said.
Although it is unknown how many CSULB students have had difficulty
with debt after leaving the campus, the loan default rate
is very low, Perez said.
"So far, they've been pretty responsible," said
Perez of students making their loan payments.
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