Since I deal with Financial Aid every day sometimes I forget
how in the dark some students are about student loans. It can be a confusing process for students
to determine how much they will need to borrow and what options they have for
student loans.
Today, I was brought into a class to answer questions that
high school bound seniors had about student loans.
We talked about taking out the Federal Students Loans, or
Stafford Loans, first before almost any other option. Freshman in college are eligible for
$5,500. First $3,500 could be
subsidized which means the interest doesn’t start accruing until 6 months after
a student graduates or drops below half time.
We also talked about when repayment begins. Federal student loans repayment begins 6
months after a student graduates or drops below half-time. It is important to note the “or drop below
half time”. We have had some students
who take just one class their last semester before graduation and since they
are below half-time now, their repayment began about the same time as
graduation.
We talked options beyond the Federal Loan if they would need
more student loan money. PLUS Loans for
parents and Private loans where students would more than likely need a
cosigner. When parents don’t want to
take out the loan in their name, a private loan may be the only option. Most high school seniors would need to get
a co-signer. Many private loans now
have an option to drop the co-signer after so many consecutive payments on
time.
We discussed keeping their student loan debt throughout
college equal or lesser than what they can expect to earn for starting salary
out of college. If you expect to make
$35,000 as a STARTING salary out of college, then don’t borrow any more than
that amount. Too many times we have
students borrowing double or even triple the amount of what their starting
salary will be and all their money goes to student loans. Not the way to start life after
college.
There were other conversations we had as well but it really
got me to thinking how overwhelming it has to seem to an 18 year old, especially those who may not have much
parental help at home.
If you need to talk to someone please contact us at ICAN at
877-272-4692 or schedule online at www.icansucceed.org/scheduleapt. We can help to navigate you through this
daunting task.
Erick Danielson - ICAN Ankeny Center
