March 11, 2014
Students Take Charge of College Loans
College students usually plan on repaying their loans after graduation, when they’ve landed a full-time job. Freshman Tatiana Andrade is making payments while she’s still in school.
Andrade is already $14,500 in debt. She’s on track to owe some $60,000 when she completes her four-year degree at Stonehill College outside Boston, even though her parents are sharing the cost. To chip away at her debt, she pays off between $100 and $150 per month from her earnings in a part-time job.
Andrade is among a slim but growing minority of students and recent graduates becoming proactive to get control of their student debt – before it controls them. She advises classmates to do the same as Stonehill College’s ambassador for the non-profit American Student
Assistance (ASA), which has a program and website – SALT – aimed at educating and counseling students on strategies to minimize how much they borrow and to manage their loan payments.
Making loan payments today minimizes the total amount she’ll pay in the future for three reasons. Loans paid immediately carry a lower interest rate than loans that permit her to defer payment until after graduation. She’s cutting down the total amount she’ll have to pay back after graduation. She said she also avoided a loan-origination fee required on deferred loans equal to 4 percent of the loan.
“Every dollar counts,” she said. Waiting until graduation “is the worst thing you can do.”
ASA is gaining traction. Spokeswoman Allesandra Lanza said some 340,000 people have signed on to SALT – it’s free – over the past six months. SALT features advice, financial aid and loan consolidation information, a blog, and resources such as loan calculators. Students attending one of the 250 colleges that currently participate in ASA programs also are entitled to call up one of ASA’s 30 financial counselors specializing in college loans.
On-campus ASA ambassadors raise awareness of the student debt issue. Andrade recently hosted a Jeopardy game that featured various loan topics and lured classmates with free cookies and a raffle for a Stonehill College sweatshirt. In another outreach campaign, ASA intern Faith Gagliardi developed awareness of the website on social media, using the Twitter handle @SALT_Money.
Gagliardi admits to learning a hard lesson about ignoring her mounting college debt. She owed about $150,000 upon graduating last August from the Wentworth Institute of Technology in Boston, requiring $1,500 in monthly payments.
When she was taking out the loans during college, “I had no idea how much or what kind or how many or anything about them – who serviced them or when I paid them, how much that would be,” she said.
She is hardly alone.