Student loans: A push forward or a shove back?

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She left college with a job, a bright hope and a plan to pay back student loans.

Betsy Miller, a 2010 Seattle University graduate, fell into trouble with student loans a few months following graduation. Miller received thousands of dollars in federal grants, but loans were needed to cover the rest of expenses. Her job fell through after a few months, and she spent countless hours knocking on business doors and filling out applications to no avail. Without a sufficient income and with looming loan repayments, Miller had no option but to move home.

Sallie Mae and America Saves released a tips sheet on Nov. 6 that provided graduated students with information on how to effectively pay back student loans. A few of their tips include knowing how much is owed each month, updating the loan’s services with any changes in contact information and being cautious of scams that tell students they can help lower interest rates.

Professionals at Sallie Mae feel it is doable to pay back loans in an efficient manner while still moving forward in life.

“Most student loan customers successfully manage their payments particularly since those with a college degree continue to earn more and have higher employment rates than those without, especially in this economy,”  said Patricia Christel, vice president of corporate communications at Sallie Mae, in an email. “We recognize that a job search today may take longer than it used to, and we work with our customers to identify solutions to assist (with payments).”

Statistics about college graduate employment are stark. About 53 percent of U.S. college graduates with bachelor’s degrees were either unemployed or underemployed last year, according to the Associated Press. In October, the U.S. Department of Labor reported 7.1 percent of college graduates ages 20 to 24 are unemployed, with the statistic at 19.1 percent for the same age group who were not college graduates.

After moving home, Miller said she swallowed her pride and picked up any position she could find — retail jobs similar to what she’d had in high school. But the loans and their interest still stared back at her. “Recently I was taking a look at my billing statements, and I did the math: I am paying $2.13 a day in interest for my student loans, and that is not a number I can decrease. I have to pay that interest; it doesn’t go away,” she said. “It’s really depressing. I think this is something kids don’t understand when they first sign up for student loans. You’re so desperate for an education. People just sign up for loans because they think it’s what they are supposed to do.”

Miller is not a graduate of BYU, but that does not mean her situation is not applicable. BYU students still take out loans. The financial aid office in the Smoot Administration Building helps students understand their options if they cannot afford school. Whether it is a subsidized, unsubsidized or short-term loan, there are options fitting for each student. But students must be aware interest rates vary across the board depending on the type of loan, who provides it and how much it is for, among other things. BYU holds one of the lowest defaults on loan percentages in the nation, according to the National Student Loan Data System.

The biggest pincher for Miller is not necessarily the loans themselves but the interest she has to pay back to the U.S. Department of Education. Even though Miller has successfully paid her bill every month, the interest continues to increase. “They want you to take 10 years to pay off your debt because the longer it takes for you to pay it off, the more interest you are paying in the long run,” she said. “That is what they make their money off of.”

Miller said she felt it was good for people to seek higher education, but she wondered if it was worth it to go into debt for education if it does not help a person secure a job. With the help of grants, Miller’s loans are lower than many other students, and that is something she is grateful for.

Others feel loans are more of a push in the right direction instead of a hindrance. Carri Rice, family life major from Arlington, Texas, will end this semester with her degree, her wedding and student loans. While she received various scholarships and grants, loans were also needed. “I would try and work during the summer if I could, but the students loans were what made it possible for me to come to school,” she said. “I don’t think I could have done it without.”

Six months after graduation, Rice is required to start paying back her loans, as is the usual amount of time for any U.S. student. Rice said she was not too worried when asked whether the looming payoffs — structured into a ten-year payment plan — were of concern. “I’ve tried to do everything I could before taking loans out, so I have a lot less than other people I’ve known,” she said. “My payments won’t be too crazy. It might be a stretch sometimes, but I am not too worried.”

Miller has never defaulted on her loans and never missed a payment, but at the end of the day, they still control her ability to be independent. As she finished explaining her frustration, she broke down into tears. “I constantly feel like I am a failure as an adult,” she said. “I am going to turn 25, and I can’t get a job. I am stuck at my parents’ house. I just want to get this debt out of my life.”

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