Student Loans

Student Loans

Facts about Student Loans

Action:

When people are in their final year of high school, they start looking at different colleges to apply to. Once they find their favorite and complete the application process, most students start looking up how to pay for the tuition. Some apply for scholarships while others have to take out loans. Over the years, college tuition has gone up causing more people to resort in taking out loans to cover the cost of attendance at their school because they do not have the means to out right pay for their tuition before the school term starts. The reason why I chose this topic is because I also have student loans and understand what the rest of the students that have them feel like. My goal with this project is to help people understand that not everyone can afford paying for college out right and need help to pay for their tuition even if that means taking out a bunch of loans to cover the cost.

Research:

There are two main types of students loans that a person can take out while they are completing their degree. The first type is the Federal Subsidized Loan. This type of loan is used right a way while the student is still in college and the interest rate does not go into affect until six months after the student has graduated. The second type is the Federal Unsubsidized Student Loan. This type of loan is also used right a way but instead of the interest rate being on hold, the interest rate is immediately taken out as soon as the loan is taken out. There are other types of students loans that students can get, but these are the more common ones that people are more familiar with.

Statistical Analysis

Loan Type	2018-19 Rate	2017-18 Rate	2016-17 Rate
Direct Subsidized Loans (Undergrade)	5.05%	4.45%	3.76%
Direct Unsubsidized Loans (Undergrade)	5.05%	4.45%	3.76%
Direct Unsubsidized Loans (Graduate)	6.60%	6%	5.31%

Taking a loan out is the easy part, the hard part is paying it back on time. Research shows that at least 11.5% of students that take out loans are ninety days delinquent on the payment. Research also shows that there are 44.7 million Americans that have some type of student loan. Once a student starts making payments on their loans, they may qualify for loan forgiveness. A program that the Federal Student Aid gives is called Public Service Loan Forgiveness (PSLF). The PSLF is a program that helps pay off the balance of the loan that a student may have. In order to qualify for this program, the student must have 120 months of successful payments and be a full-time worker for a qualified employer. While there are other types of programs that offer loan forgiveness PSLF is more common with the Federal Student Aid. Even with the help of a loan forgiveness program, some students may not be able to fully pay back the loan that they took out because it is either too big of an amount or they just do not have the means to pay it back causing them to default on the loan.

Why it is Important to me:

This is important to me because I am one of the many students around the world that have student loans. I am one of the ones that will have to find a way to start paying back the loans that I have. I also know some people that have taken out big loans just so that they can not only pay for college but also live off of during the school year. By taking out such big loans, they either have to start paying it back before they finish school or once they finish school they will have to make payment arrangements with the government on how much they will be paying back each month. I am writing this blog to bring awareness to the amount of students that have loans and that there are ways to help pay back the loans. I also want to bring to light the amount of people that are not able to make their payments and default on their loans making the amount of time and amount of the loan increase becoming harder to pay of their loans.

Interviews from Cal State La Students:

Given the tragically high price to obtain a higher education degree, the majority of students are forced to turn to some type of student loan service. Although I personally receive financial aid, I will have some debt by the time I graduate. I know the type of career I am pursuing will give me return of investment, thus, I am more than willing to invest in my education and be in debt after I find a job. I cannot say that I would feel the same way if I found myself passionate about a different career that did not provide me as much financial security. Overall, I would advise any student contemplating getting student loans to carefully plan their financial needs, and stick to a budget they find comfortable to start paying back in a few years. Changes in legislation to make public higher education free are not coming soon enough, and meanwhile my generation has to receive a higher education in combination with student loans, and I find this to be the only way to cope with this reality; take advantage of all forms of financial aid available to you, and figure out a way to truly utilize student loans in your favor. Do not blindly and mindlessly accept student loans.

- Abril Jaime

Student loans help students stay or get into the college they want. However, many leave or focus more on working than their studies because the loan that they took has interest. I personally see why may students choose to go into six to twelve month programs. College is pricey for most and those who encourage us to take out loans or work as we study are from a time where students could work a part time job and study at the same time. Student loans help but until the payment program and the interest rates are fixed for students it will cause more damage then good.

- Diego Dorado

Receiving a higher education for most students is impossible to afford without the help of some type of financial aid. I myself receive a grant every year but not enough to cover the full cost of tuition and my family unfortunately does not make enough to cover the remaining tuition. Therefore leaving me to take out student loans. I believe when it comes to student loans, students are not paying much attention to the amount they are borrowing until it is too late and they have taken out more than they can pay back. In my opinion student loans can be very useful if used wisely allowing students to cut back work hours to pay more attention to school. On the other hand student loans also have their downfall, if used carelessly a student can owe more than they can ever pay back, possibly leading the student to file for bankruptcy.

- Priscilla Gutierrez

Resources

1. “U.S. Student Loan Debt Statistics for 2019.” Student Loan Hero, studentloanhero.com/student-loan-debt-statistics/. 

2. “Public Service Loan Forgiveness.” Federal Student Aid, 4 Apr. 2019, studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service.