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Do this, not that: student loans during and after college | The Triangle

Do this, not that: student loans during and after college

“Debt” is a term that all college students fear, one that sends graduates running for the hills. Drexel students are graced with many opportunities, but nothing good comes for free, and students know firsthand what it feels like to pay a painfully high tuition. The beginning of your four-or-five-year adventure at Drexel is full of excitement and naivete to your inevitable debt. As you get closer to graduation, the reality that your loans are attached to you by strings and that the government is the puppeteer completely blindsides you. Unless you have wads of cash hidden under your mattress, you are most likely taking out subsidized and unsubsidized loans to ease the tension of paying a whopping $70,000 all at once.

One thing that students might not think about until they graduate is interest rates. Interest rates on subsidized loans are currently 3.4 percent. Every year that you don’t pay off your subsidized and unsubsidized loans, the price increases, making it harder to pay off your debts each year. According to CNNMoney, a recent Fidelity survey of 750 college students across the country showed that the class of 2013 averaged $35,200 in total debt. This is likely to increase for the class of 2014 and on if interest rates on subsidized loans double to 6.8 percent July 1. The New York Times reported that the House of Representatives is fighting this increase and passed legislation May 23 that would temporarily prevent interest rates from increasing.

Sometimes taking out tons of loans feels like a good solution, but the Editorial Board would like to remind you that it is a temporary solution that will haunt you once you graduate. Once you’re out of school and immersed in the real world, ready to take on a new stage of your life, the last thing you want is the thought that you have to pay the government thousands of dollars that you don’t have. It is inevitable that most students, ourselves included, have no choice but to take out loans. Be smart about taking out loans, and take into consideration these do’s and don’ts that could save you time, money and stress:


1. Understand the numbers, even if it’s a little overwhelming. Prepare yourself now and understand how much you owe, what interest rates are applicable, and how much your monthly payments will be. Make sure you can answer all the important questions so nothing catches you off guard when you graduate.

2. Make a budget for your future and stick to it. It’s a good idea to make and follow a budget while you’re still in school so that you account for your co-op earnings and make sure you’re not wasting all your income. If you don’t know where to start, sit down with your parents or a representative at your bank. We’re not required to already understand everything, but we are supposed to learn and be proactive about the process.

3. Start paying back your loans as soon as possible! Part of what makes the co-op system great is that it helps students pay their tuition. Making and following a budget can help you figure out what money you need to cover your living and travel expenses and how much can be used to start repaying those loans. The longer you wait, the more you’ll owe in interest!


1. Freak out. Thinking about student loans and your total debt with interest is intimidating, but don’t freak out. You’re not the only student doing it. Even before the recession, lots of students were taking out loans to pay for college. If you are confident that you made the right decision for yourself and that the value of your education is worth it, then don’t worry too much.

2. Limit yourself to the minimum payment. When it’s finally time to start making monthly payments on your loans, don’t pay only the minimum. If you can spare an extra $10 that month, then put it toward your loan bill. The more you can bring down the principal of the loan, the less interest will be accrued and the better off you’ll be in the long run. Budgeting out your earnings will give you a better sense of what you can spare, but don’t forget to put some into a savings account.

3. Think that filing for bankruptcy is the answer. Don’t assume that your debt will go away with time or even after filing for bankruptcy. You are still expected to pay back student loans after claiming bankruptcy, and there’s a very little chance you will be able to get out of doing so. Even if you decide to defer a loan for a certain amount of time, there’s a good chance that interest will still be applied during that period, increasing the amount you owe.

Whatever route you choose to go for student loans, just remember that there are plenty of people who want to help you through it. Seek those relationships so you won’t be alone in monitoring your financial stability. The Pennsylvania Higher Education Assistance Agency wouldn’t have named its financial advice website “You Can Deal With It” if that title wasn’t a true statement. No matter how bleak your situation looks, you can deal with it, and help is easy to find as long as you look in the right places.