Options for repaying student loans

Four months after getting her acceptance letter, freshman Sarah Briggs received something else in the mail: the matching price tag.

In a crisp white envelope sporting the SPU insignia, Briggs found a financial aid offer enclosed, displaying a list of possible funds she would need to cover the $43,000 prospective students face.

Briggs’ list of options to pay for her higher education included an institutional grant in addition to $21,000 in loans. With those, Briggs would join the multitude of students who have to borrow money to pay for school.

Briggs always knew she would need to borrow money to pay for a nursing degree, but that didn’t make it any easier to take on the full $21,000 debt, which is just a fraction of what she’ll need to borrow over the next four years.

“How do you put a price tag on your future or a monetary cap on your dreams?” Briggs asked. “You don’t — you find a way to pay for it.”
Briggs is not alone.

A recent report by The Institute for College and Success (TICAS) concluded that the national average debt for students graduating in 2012 was $29,400 in federal loans. According to a press release, TICAS collected data about borrowed federal loans voluntarily from only public and private nonprofit colleges, not including for-profit colleges and private loans.

In comparison to the national debt figures, the average debt of SPU graduates in 2012 was only slightly lower at $28,263, according to the TICAS’ online database.

While some university students graduated with $49,450 of debt in 2012, SPU’s average debt figure was not among the highest figures TICAS reported.
According to SPU’s Information and Data Management, $42.6 billion of the $89.1 billion in financial aid the university distributed in 2013 originated from SPU funds.

These institutional grants and scholarships accounted for 46 percent of the financial aid distributed to students this past fiscal year while federal funds accounted for only 15 percent of the aid students received.

Though students are receiving significant aid in funding their college education through SPU, 66 percent of undergraduates were still forced to borrow money in federal loans this past fiscal year.

“A big portion of my cost of attendance was covered through the institutional funds that SPU offered me,” Briggs said. “It helped a lot, but it didn’t really offset the costs that come with a private university.”

The steady climb of student debt nationwide signifies an unrelenting need for students to continue to borrow funds for higher education, TICAS’ report said.
According to Debbie Bristol, SPU’s assistant director of student loans and collections, students need access to financial education now more than ever to manage the reality of future debt.

“What grieves my heart to see in Student Financial Services is students with loans who are unaware of the options available to them,” Bristol said. “There are tools available that can make repaying debt manageable.”

Foremost, Bristol said, avoiding extensive future debt will result in greater financial expense later. Being realistic about how much debt students have borrowed and planning ahead for future repayment will pay off in the long run.

“Students have so many options when it comes to repaying significant debt, and I always love helping them see what they are,” Bristol said.

Among those options, Bristol recommends consolidating loans and looking into loan forgiveness programs.

Consolidating multiple loans into one large sum has the benefit of possible extensions when repaying loans and turns the debt into a direct loan, which makes it eligible for more loan forgiveness programs.

According to Bristol, students going into public service professions should take special interest in public service loan forgiveness plans. Such programs allow students to have any debt left unpaid forgiven after 10 consecutive years of employment in public service. Since the average loan takes 10 years to repay in full, these programs can be helpful.

Other programs, such as Income-Based Repayment and Pay As you Earn, keep federal loan payments manageable based on income level and forgive remaining debt after 20 years in repayment. These programs are accessible strategies to planning future repayment, Bristol said.

“Students can receive help with their student loans from financial services at any time by just emailing the office and requesting an appointment,” Bristol said. “We also offer online financial education that makes financial assistance more accessible.”

MoneyWise is one example of financial education available to students online. According to the SFS web page, MoneyWise consists of free online courses and other resources to provide financial information to SPU students.

Bristol said she is a strong advocate for financial education and staying on top of student debt as the best strategy for repaying loans.

The financial counseling and extensive information on loan repayment programs available in Student Financial Services can be a place to start in planning future repayment.

As for Briggs, she knows she will need to borrow more money to attend SPU and pursue an education in nursing.

“Student debt is inevitable as far as my education goes,” Briggs said. “It’s a huge responsibility, but my plan is to go straight into nursing after graduation and work to repay my loans through the career they paid for.”

This article was posted in the section News.

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