One of the suggestion that I give during my college financial survival lecture is to only take out what you need with respect to students loans. Do not use student loans to fund your lifestyle.
Many of my students told me that the financial aid office wants student to take the maximum amount, regardless of whether the student needs the money or not.
Are you kidding me?
Before you start telling me that I am being naive, don't worry, I get it. College's make the money of the loans. The more the student takes out, the better.
This is just wrong.
Here we are in a credit crisis and we are handicapping students from jump. They are told not to worry becuase the money is not due until six months after graduation (in some cases).
Sure, you can pay it back...if you have a job! And if you don't, it sucks to be you. Sure, there is deferment and forbearance, but the interest still accrues. And student loans are not discharge in bankruptcy.
Makes you wonder who is looking out for the students?
About Me
- Seeking Solace
- I am a college professor who is fumbling through the chaos of academia, rheumatoid arthritis, working on my PhD and just being a 40 something woman. I used to be a lawyer, which made me a snarky little person. I have a wonderful Husband and a German Shepherd named Junior. They help keep me sane.
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4 comments:
I did, but didn't use it all. I put it in an account that accrues interest. The reason I took as much as they'd give is that my grad university (I don't have loans from undergrad) will only allow us to receive financial aid for a set number of semesters. The number is significantly less than the average time to completion.
So, while I didn't use all of it at the time, I took it so that I could use in later semesters. Granted, this takes a bit of self-control and planning. What isn't used will go towards my first loan re-payment. That is the only reason I took what they would give me.
Sadly, many people do not follow the sound plan that you have. Most people see it as free money.
It makes it hard when one cannot get financial aid for doing what society expects. It makes me sad when I hear that students cannot return to school becuase of all these problems.
Yeah, I recall a couple particularly cringe-worthy moments when I heard not one, but two friends describe taking more loans as "living off the government this summer." I wanted to say, "No, you're living off your future income plus interest."
I think one of the advantages of taking time off before grad school is that I did have to deal with the grown-up, money part of life. I've had to explain to people what an IRA is. That's just sad.
I couldn't believe the number of people I knew in college who were living on loans. My husband and I feel very blessed to both have graduated with no debt, and we're a lot further along now.
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