CSUF students faced with loan debt after graduation

In 2017 Financial Issue, Features, Lifestyle
(Photo Illustration by Katie Albertson / Daily Titan)

Whether students are dealing with the blood pressure-raising prospect of deciding on a career or chugging coffee to get through a particularly sleep-deprived finals week, there are tons of school-related stressors for them to experience during their college career.

However, some of the biggest stressors for students don’t have anything to do with the process of getting their education, but rather how they are paying for it.

In an increasingly competitive employment environment, college degrees have become a necessity to attain success in recent years.

The price of education rises every year, making it increasingly more difficult for low-income families to obtain these necessary credentials. As a result, students are forced to seek financial aid.

The annual report on student debt by the Institute for College Access and Success showed that about 70 percent of students who graduated from a public or nonprofit school deal with debt after leaving college.

In the 2015-16 academic year, over $61 million in federal student loans were disbursed and about 30 percent of Cal State Fullerton students took out loans, according to the National Center for Education Statistics.

Brandi Alexander, an account technician at Student Financial Services at CSUF, has daily interactions with students who receive loans from the school. Many students depend on them to balance their finances.

“There are people who call that are just like ‘I need it because I need to pay my rent. I need to go buy books,’” Alexander said.

The CSUF alumna has experienced the impact of loans herself after graduating in August.

“When I was in school, it’s like ‘Oh, problem solved: Loans.’ But I’ve graduated now, and I feel more pressure to get a job right out of college because I have these loans to pay back,” Alexander said.

Kelly England, the interim director of Student Financial Services at CSUF, recommends that students take their career’s incomes into consideration before taking out loans to avoid issues when repaying them.

England said that if a student does not pay their debt, their loans go into default.

“Once you get to that point, it’s very challenging to resolve,” England said.

When loans go into default, they can become more expensive due to collections fees and students will become ineligible for other forms of financial aid until their previous loan is repaid, England said.

The Office of Financial Aid recommends that students contact their loan server because they may qualify for a deferment, in which the government pays for the subsidized interest on the student’s loans, England said.

Additionally, loans that go into default can negatively impact a student’s credit score. This can result in difficulty obtaining home or car loans, cell phone plans, homeowner’s insurance and approval to rent apartments, according to the U.S. Department of Education.

Fifty-two percent of students are affected by student debt when deciding to buy a car, and 55 percent are affected when trying to buy a home, according to a recent study conducted by American Student Assistance.

Furthermore, students often experience hardship when combining student loan payments with necessary household spending.

Melissa Valdiviezo, a CSUF alumna who majored in radio-TV-film, pays $400 a month in student loan payments. The cost of her payments have made it difficult to keep up with the other bills she has, and almost impossible to save up money.

If Valdiviezo faithfully sticks to her payment plan, she thinks it will take 10 years to pay off her loans.

“I’m trying to keep up with whatever happens, like if I blow out a tire, I might not have the money to replace it right away,” Valdiviezo said. “It feels like I’m just working in order to make sure I keep up with payments and don’t go into default.”Su

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