College Takes Four Years, Loans May Last A Lifetime
Credit card debt gets the most attention, but student loans are on the rise
For Immediate Release: September 5, 2002
ROCKVILLE, Md. — After graduation, a college student has many things to look forward to - a new job, a new place to live and quite often, thousands of dollars in student loan debt. "While students are going to have to take out loans to cover college expenses, many don't realize that the amount they are borrowing might end up being a huge burden when they graduate," said Mike Kidwell, vice president and co-founder of Myvesta, a financial health center. "College students often think that their first job out of school is going to give them a great paycheck that will cover all their expenses, but many are shocked to find out how far that paycheck actually goes."
As college tuitions have steadily increased over the past few years, the amount borrowed to receive a college degree has risen as well. According to the U.S. Department of Education, the average amount borrowed to attend a four-year public institution was $16,100 in 2000. That number is up 35 percent from $11,950 just four years earlier. The amount borrowed to attend a private school rose 26 percent, from $14,290 in 1996 to $18,000 in 2000.
"Taking out student loans to attend college can be a good idea, but rushing out to buy a new car and renting an expensive apartment as soon as you graduate isn't," Kidwell said. "We urge graduating seniors to sit down now and figure out what their expenses are going to be and how they are going to pay for them before making any major purchases. You may have a six month period where you don't have to pay your student loans after you graduate, but that six months goes by fast."
If you are having trouble paying your student loans, Kidwell recommends you talk to the holder of your loan as soon as possible.
"There are many options available for people who are having a hard time making their student loan payments," Kidwell said. "The most important thing is to contact the lender as soon as possible and work out an arrangement you can afford. Most student loan holders, especially federal student loan holders, are very accommodating for special needs. Just make sure you act quickly before you default."
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MyvestaSM is dedicated to helping people create healthy financial lives. The organization provides a wide range of materials to inspire and inform people so that they can break down their barriers to financial and personal success. For more information visit Myvesta.org online.