Spring Break
Students flee country to escape loan debt
Higher interest rates, scarcity of higher paying jobs impact people's ability to pay off debt
Matthew Tomlin, Daily Vidette Staff Writer
Issue date: 11/3/08 Section: News
With college tuition higher than ever, students in some extreme cases have fled the country amid mounting debt from student loans.
"We understand that students are now taking on more debt than they ever have before," Bridget Curl, associate director of program administration and compliance in the Financial Aid office at ISU, said. "We always encourage students to budget their money in school, and to borrow only what they need."
"What we're seeing as a credit counseling agency is that more people are coming to us because they can't afford to pay those loans when they come due," Heidi Berardi, an ISU graduate and vice president of Family Credit Management, a non-profit agency devoted to helping consumers deal with debt, said.
Berardi says her office in Normal has been so busy with clients who are struggling to pay home and student loans that they have had to extend their hours to midnight.
"It's a combination of higher interest rates for student loans, and students not being able to find those higher paying jobs anymore," she added. "We're hoping things are going to improve with the economy."
Before students start running from debt, Berardi recommends researching the ways to manage it.
"The first thing [students] want to do is communicate with their lender and explain they can't afford the loan," she said. "They might be able to qualify for a forbearance or deferment which would stop payment until they're financially able to pay."
Curl agreed, saying, "The lenders don't want students to flee the country. They want the loan to be paid, and more often than not, they are willing to work with the student."
Another option Berardi suggested is consolidation.
"[Combine] several loans into one loan so it's easier to make one payment," she explained. "One place to go would be Sallie Mae or the U.S. Dept. of Education."
"They would be able to give pretty low fixed interest rates."
Berardi explained that knowing about the options is key.
"If [students]… research their options before they call the lender, there's a greater chance they'll be able to resolve their situation."
To avoid incurring massive amounts of debt, Kevin Kuebler, a CPA and financial planner with AXA advisors, suggests having a plan to pay off your loan.
"Anytime you go into any investment or vehicle loan you need to have a plan to come out of it," he said. "If we first understand the extent of our loans and the fact that we're going to have to pay them off sometime then we wouldn't be in the position where we have to flee."
"The biggest advice that I have is to live within your means," he added. "When you get into the habit of buying things you can't afford, that's what creates the problem."
If you or someone you know is struggling with student loans, contact Family Credit Management at 800-994-3328.
"We understand that students are now taking on more debt than they ever have before," Bridget Curl, associate director of program administration and compliance in the Financial Aid office at ISU, said. "We always encourage students to budget their money in school, and to borrow only what they need."
"What we're seeing as a credit counseling agency is that more people are coming to us because they can't afford to pay those loans when they come due," Heidi Berardi, an ISU graduate and vice president of Family Credit Management, a non-profit agency devoted to helping consumers deal with debt, said.
Berardi says her office in Normal has been so busy with clients who are struggling to pay home and student loans that they have had to extend their hours to midnight.
"It's a combination of higher interest rates for student loans, and students not being able to find those higher paying jobs anymore," she added. "We're hoping things are going to improve with the economy."
Before students start running from debt, Berardi recommends researching the ways to manage it.
"The first thing [students] want to do is communicate with their lender and explain they can't afford the loan," she said. "They might be able to qualify for a forbearance or deferment which would stop payment until they're financially able to pay."
Curl agreed, saying, "The lenders don't want students to flee the country. They want the loan to be paid, and more often than not, they are willing to work with the student."
Another option Berardi suggested is consolidation.
"[Combine] several loans into one loan so it's easier to make one payment," she explained. "One place to go would be Sallie Mae or the U.S. Dept. of Education."
"They would be able to give pretty low fixed interest rates."
Berardi explained that knowing about the options is key.
"If [students]… research their options before they call the lender, there's a greater chance they'll be able to resolve their situation."
To avoid incurring massive amounts of debt, Kevin Kuebler, a CPA and financial planner with AXA advisors, suggests having a plan to pay off your loan.
"Anytime you go into any investment or vehicle loan you need to have a plan to come out of it," he said. "If we first understand the extent of our loans and the fact that we're going to have to pay them off sometime then we wouldn't be in the position where we have to flee."
"The biggest advice that I have is to live within your means," he added. "When you get into the habit of buying things you can't afford, that's what creates the problem."
If you or someone you know is struggling with student loans, contact Family Credit Management at 800-994-3328.
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