HawkCent$ Raises Awareness About Student Loans – The Hawk Newspaper
A dozen students attended a Hawk Cent$ conference on March 30 to learn more about their student loans.
Hosted by the Financial Aid Office, the conference titled “Managing Your Student Loan Debt and Finding Outside Scholarships” was led by Michael Maloney, Financial Aid Specialist at the Financial Aid Office. Maloney’s presentation covered types of loans, repayment plans and tips on how to manage student debt.
Although student loans can seem intimidating to some students, getting familiar with the loan process earlier can save students money in the long run, Maloney told the audience.
Danielle Ray ’25, who attended the conference, said her biggest lesson from the presentation was to learn about different types of loans and repayment plans.
“I found it surprising that most people pay off their loans in 10 years and federal repayment plans last 10 years,” Ray said. “But you would need a plan.”
According to a 2021 College Board report, “Trends in College Pricing and Student Aid,” total education borrowing is down for the 10th straight year. But the loans still represent $95.9 billion in aid. Of that amount, about 87% comes from some type of federal loan and 13% from non-federal loans, which include state and institutional loans and those issued by banks, credit unions and other lenders.
Jay Fleischman, a New York-based student loan attorney who runs “Money Wise Law,” a financial resource website, said paying for college “is probably the second financial investment an individual will make in this stage, right after the price of buying a house and taking out a mortgage.
“The average undergraduate gets their bachelor’s degree and has an average of $36,000 in student debt,” Fleischman said. “That may not seem like a lot, but it is.”
Yet most students don’t even know how much they owe in loans. In a 2022 Student Voice survey for Inside Higher Ed, of the 1,550 undergraduates surveyed who said they had student loans, one in five were unsure of the amount of their student loan debt, and nearly the half were unsure of their monthly payment amount. after graduation.
“What I’ve found is that many students don’t even know what the terms are, what the interest rates are, what the monthly payments will be when they graduate,” said Todd Erkis, visiting professor of finance. “I think the first thing is to find out what exactly you have. It’s hard to manage debt when you don’t really understand it.
Erkis, who will co-teach a new financial literacy course in the fall with Viktoriya Lantushenko, Ph.D., an assistant professor of finance, said that while students may not know how much they’ll earn after graduated, they should still have an idea of what their monthly payments will be.
“If I’m in my second year and I’m going to borrow a certain amount, what will the monthly payment be when I graduate?” Erkis said. “I don’t think many students do that. And I think it would be helpful if they put into perspective how much they’re borrowing and what the actual obligation will be.
Fleischman said students with private loans should pay particular attention to what loan repayment will look like after graduation.
“While you’re in school, it’s good to familiarize yourself with what your options are going to look like,” Fleischman said. “Once you get out of school and once you’re on your way to repayment, the biggest problem is presented by private student loans, the vast majority of which require co-signers and guarantors, often parents, grandparents – relatives with income and credit ratings, credit history. They create the biggest financial problem. When it comes to federal student loans, it’s important to understand what the repayment options look like in broad strokes.
One piece of advice Maloney suggested during the conference was that students should pay the interest on their current loans, rather than waiting until after graduation, which would save them thousands of dollars later. .
“[Pay interest in school] if you can,” Maloney clarified with The Hawk after his presentation. “I know there are a lot of students who don’t have that ability or those resources, not me. If your family has the ability to pay the interest, this avoids compounding. So at the end of the capitalization, you will have less principal.
Ultimately, Maloney said student lenders can be a helpful resource in determining which repayment method works best. Loan officers want their money and will work with students to help them make regular payments, Maloney said.
“You can call them, work with them, and they’ll work with you,” Maloney told the audience. “Trust me, they want their money. So however they can help you make sure you can make consistent payments, they will do it for you.
Fleischman said the more students know and understand their loans now, the better off they are in the long run.
“I think it’s important to have a plan for managing your student loans,” Fleischman said. “A plan that allows you to stay in good standing and be able to live your life at the same time.”