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Loans
become big-time debt after graduation
By
Lauren Nelson
Online Forty-Niner
Staff Writer
With
the cost of living rising and the free money
for school remaining stagnant, Cal State
Long Beach students are taking out more
student loans than ever before as they decide
to rack up debt now and worry about it later.
By the time the average student graduates
from CSULB, he or she will have acquired
$11,200 in student loans, Director of Financial
Aid Dean Fulju said.
Based
on a 2003-2004 report, CSULB has one of
the best rankings nationwide. Data from
2002 shows the national average of student
loans in undergraduate public schools is
$17,100. CSULB students are taking out $5,900
less than their peers nationwide.
With
these averages being based on students who
do not take out any loans along with students
who take the maximum limit each year, many
students can incur a debt of $18,000 or
more, depending on how many years they are
enrolled.
For
three years at CSULB, 2004 graduate Nicole
Morasca incurred a student loan debt of
$18,000. Morasca used loans to pay for rent,
car insurance, food, bills, tuition and
a social life.
"I
didn't have any complaints when they were
giving me the money, but it sucks now that
I have to pay it back," she said.
Fifty
percent of CSULB students—about 17,000
people—receive some kind of financial
aid through loans, grants or scholarships.
One-third—or 11,000—take out
student loans.
According
to Fulju, CSULB administers $115 million
in loans each year, with $55 to $60 million
of that being loans to students.
"More
students are borrowing because of fee increases.
In my world of financial aid, grants are
not increasing," Fulju said. "[Aid]
has shifted from grants to loans."
Even
with the increase in loan debt, studies
show that CSULB grads are able to manage
when it comes time to repay borrowed money.
The default rate—the percentage of
people who don't repay loans—is below
the national average that lies around five
percent. CSULB only has a default rate of
2.9 percent.
To
repay the $18,000 she owes in loans, Morasca
will pay $163 per month for the next 10
years, a price that she says is annoying,
but well worth it.
"I
have no regrets…it was a good experience.
I got to study abroad and became more independent,"
said Morasca who believes taking out loans
offered her a better life experience. "I
did it all on my own and nobody helped me."
Fulju
agrees that students and family should look
at loans as an investment that pays off
later in life.
Besides
scholarships and grants, there are several
types of student loans—Federal Perkins
Loan, Federal Family Education Loan, Subsidized
Stafford and Unsubsidized Stafford Loans.
Though
the federal government pays interest on
a Subsidized Stafford while a borrower is
in school, interest on an Unsubsidized Stafford
starts accumulating when the loan is received.
Each
loan offers a different amount of money
depending on a student's class standing.
Students decide which bank they want to
use as a lender.
When
many students at CSULB receive their annual
award notice that allows them to accept
or decline all types of financial aid, some
sign up for new loans and lenders, forgetting
they already have loan accounts.
A
grad student at CSULB, Desiree Torres says
she is "just wracking up money"
with her loans and plans to consolidate
her debt upon graduation because she hasn't
kept track of the money she is borrowing.
"[By
graduation] I'll have seven years of loans
from different lenders, she said. "It's
so confusing and stressful," said Torres.
Before
receiving a loan, students are required
to take a one-time loan workshop that explains
disbursment, lenders and payback.
The
Stafford Loans are the most popular and
change limits each year. Freshman can only
receive $2,625 while third and fourth year
students can receive $5,500 and graduate
students can receive $10,000 per year if
need is proven. With the 2005-2006 CSULB
financial aid estimates of the price of
living in an off-campus apartment being
$15,612, even taking out the maximum amount
of loans is not enough to suffice.
Jennifer
Schwalbach receives $10,000 per year in
loans while she works on her M.A. Though
loans are stressful, she says the hardest
part is dealing with the financial aid office
and their discrepancies of not "activating"
a loan or overlooking a student's amount
of units that can double or divide a student's
award.
"You
can't really know until [it] happens to
you," says Schwalbach who is waiting
to receive her check, which she depends
on for living, after the financial aid department
wrongly thought she needed another class.
"It's not a problem with the loan,
it's a problem with the university."
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