Ladies and Gentlemen, Let’s Talk Student Loans

Mark your calendars Chargers, December 14th is the last day of the fall semester. But, before everyone stressfully cramm for finals and breaks out the Christmas socks, let’s talk about student loans.

With the fall semester quickly coming to an end, and transferring out of Cypress College for some students is right around the corner, comprehensive information about student loans need be dispersed. The cost of tuition can be very overwhelming and unmanageable for most college students, even with in state tuition and scholarships. The idea of student loans can be very daunting, especially with how much information there is, but don’t worry. The most important information can be simply broken down and easier to digest. Here’s a few important concepts transferring students need to know about loans.

Before transferring schools, students must resubmit their FAFSA because loans do not transfer between schools. Mid-year transfers can resubmit their current FAFSA with the updated school choice, rather than filling the form out from scratch.

A student’s financial award through FAFSA may be subject to change. The price and potential fluctuation of the award is dependent upon the educational institution. The aid package may shrink or grow based on tuition prices. All transferring students with or filing for student loans, should consider speaking to a counselor to try to estimate how such changes may affect finances.

Take care of existing loans because you will still be held responsible for paying off student loans from your old school. Schools will report your enrollment status in regards to pending loans, but stay on top of student loans to avoid going into repayment. There are three standard repayment options, full deferral, interest-only, and immediate repayment. Full deferral means that no principal or interest is due while a student is at least half-time enrolled, and payments will begin six months after graduation. Interest- only means that students only pay the accrued interest during enrollment, and immediate repayment is payment of both principal and interest as soon as the loans are given.

As common as taking out student loans is, it’s crucial to be conscious of financial availability. According to the American Federation of Teachers, collectively, student loan debt has reached over $1.5 trillion.This debt has surpassed all types of household debts, excluding mortgage debt. This is due in part to the fact that college tuition inflation is about 3.5% to 4.0% higher than the consumer inflation rate. According to finaid.org, college tuition tends to increase roughly 8% each year, which means it about doubles every nine years. College tuition increases at about twice the rate of general inflation, making harder, with each year of college tuition increase, to be able to afford higher education.

Although student loans may be hard to avoid for some college students, there are a few ways to reduce the amount of student loan debt students accumulate. Try to exhaust all resources prior to relying on student loans, such as grants and scholarships. Consider saving as much money as possible before college. Try to budget before borrowing, prior to taking out student loans, conduct and comprehend as much research and information as possible. This will help in exercising restraint, resulting in excess spending cuts. Create a semester by semester schedule plan with a counselor to try to graduate within four years. Additional semesters equal additional loans. If time affords it, work part time during the school year and full time during allotted breaks. There is no secret formula for avoiding student loans and debt. With the tuition costs growing at twice the rate of general inflation, the most beneficial tool that accessible is financial literacy and student loans information resources, all available online.

There is a lot of important information students must know about student loans, and most of it can be hard to digest. For further information and or questions regarding student loans, meet with a counselor to discuss if students loans are financially wise for you.

 

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