2008 Woodie Awards
Officials: Research all loan options before choosing
By: Meredith Mayberry
Issue date: 2/20/08 Section: News
College students have more to worry about than classes and grades.
They have to worry about debt.
Debt is on the mind of every student who has taken out one or more federal or private loan to pay for schooling. Lenders may have to start increasing the amount borrowers put down to obtain a loan, according to cnnmoney.com.
"You may see fee increases on both federal and private loans. Interest rates on private student loans could increase up to 1 percent," the Web site states.
Loan programs such as MI-LOAN, an affordable state loan program, was put on hold because a lack of available capital to fund the program. The possibility that student borrowers will not be able to repay their loans is the cause of the crisis.
Stephanie Forest, a CMU financial aid assistant director, said students have to start thinking about the amount of money they get through a loan.
"Students need to think about what they need versus what they want," Forest said. "They have to start borrowing responsibly, getting money for education, not for a lifestyle."
According to Financial Aid's official Web site, finaid.org, 61.7 percent of students attending a four-year public university borrow money from lenders. Of that 61.7 percent, the average cumulative debt per borrower is calculated at $17,277.
The average cumulative debt per borrower of four-year universities in public and private is calculated at $19,202.
Student borrowers might not be looking toward such sums of money when they take out their loans, Forest said.
"Students dive into these decisions and don't realize the impact when they are out of school and have to pay them back," Forest said.
A major problem students face when choosing the right loan is where to start, said Kristin Herndon, a CMU financial aid specialist.
Forest said the first place students should look is to government loans.
"Ask what you can get from the government before you turn to private loans," she said.
Herndon said when in doubt, contact CMU's Financial Aid Office.
"We can tell you your options and make sure you take full advantage of federal and state money," Herndon said. "We can even give you a list of lenders that we know the most about."
Herndon said building good credit also is important when getting a loan.
"Students haven't had a chance to build credit," Herndon said. "They don't have bad credit, but lenders see no credit as bad credit."
Without a credit history, students can get loans with a co-signer, such as a parent.
Myrichuncle.com is another source for students without credit. The site has a system that analyzes academic history, work history and GPA in order to extend credit, according to cnnmoney.com.
news@cm-life.com
They have to worry about debt.
Debt is on the mind of every student who has taken out one or more federal or private loan to pay for schooling. Lenders may have to start increasing the amount borrowers put down to obtain a loan, according to cnnmoney.com.
"You may see fee increases on both federal and private loans. Interest rates on private student loans could increase up to 1 percent," the Web site states.
Loan programs such as MI-LOAN, an affordable state loan program, was put on hold because a lack of available capital to fund the program. The possibility that student borrowers will not be able to repay their loans is the cause of the crisis.
Stephanie Forest, a CMU financial aid assistant director, said students have to start thinking about the amount of money they get through a loan.
"Students need to think about what they need versus what they want," Forest said. "They have to start borrowing responsibly, getting money for education, not for a lifestyle."
According to Financial Aid's official Web site, finaid.org, 61.7 percent of students attending a four-year public university borrow money from lenders. Of that 61.7 percent, the average cumulative debt per borrower is calculated at $17,277.
The average cumulative debt per borrower of four-year universities in public and private is calculated at $19,202.
Student borrowers might not be looking toward such sums of money when they take out their loans, Forest said.
"Students dive into these decisions and don't realize the impact when they are out of school and have to pay them back," Forest said.
A major problem students face when choosing the right loan is where to start, said Kristin Herndon, a CMU financial aid specialist.
Forest said the first place students should look is to government loans.
"Ask what you can get from the government before you turn to private loans," she said.
Herndon said when in doubt, contact CMU's Financial Aid Office.
"We can tell you your options and make sure you take full advantage of federal and state money," Herndon said. "We can even give you a list of lenders that we know the most about."
Herndon said building good credit also is important when getting a loan.
"Students haven't had a chance to build credit," Herndon said. "They don't have bad credit, but lenders see no credit as bad credit."
Without a credit history, students can get loans with a co-signer, such as a parent.
Myrichuncle.com is another source for students without credit. The site has a system that analyzes academic history, work history and GPA in order to extend credit, according to cnnmoney.com.
news@cm-life.com
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