Student loan borrowing requires good judgment

BY D. SEAN ROWLEY
Senior Reporter
02/06/2019 08:30 AM
Main Cherokee Phoenix
Dr. Jerrid Freeman, vice president of student affairs for Northeastern State University, says student borrowers should not be “cavalier” about their finances. D. SEAN ROWLEY/CHEROKEE PHOENIX
TAHLEQUAH – It is now the second-largest category of debt in the United States, and some are calling it a crisis.

About 44 million borrowers owe a total of $1.5 trillion in student loan debt, according to economic research by the Federal Reserve – and those estimates don’t account for the classes of 2017 and 2018. About 1 in 4 American adults owe on student loans and the average balance upon graduation is greater than $37,000, which is more than a 50 percent increase since before the 2008 recession, when many state legislatures cut university budgets over several years.

For Cherokee Nation citizens considering loans for college, there is some good news. The Institute for College Access and Success reported Oklahoma has the 10th-lowest rate of average student loan debt. In-state students graduate with less than $25,000 owed.

Cherokee students can also contact CN College Resources about scholarship eligibility. There are also other opportunities such as endowed scholarships, federal and state grants for those in financial need and campus work-study to minimize debt upon graduation. Part-time jobs are also an option for those who can budget their time and keep up with their studies.

“Seek out all other forms of resources and aids before resorting to a loan,” Teri Cochran, Northeastern State University director of student financial services, said. “Fill out applications for grants and scholarships. When it comes to student loans, take out what you need – you may want a little extra for an emergency. You might use a student loan calculator. You will want to know what your salary might be in relation to your payment. You want to be an informed borrower.”

Typically, students seeking financial aid fill out a Free Application of Federal Student Aid or FAFSA form. Many states, including Oklahoma, use FAFSA information when awarding grants or loans. Cochran recommended submitting a completed form as soon as possible after Oct. 1 each year because many aid programs have limited funding. The Oklahoma Tuition Aid Grant makes awards to qualifying students until funds are exhausted.

Colton Holmes, senior accounts receivable technician for NSU Bursar Services, said the financial needs of students vary but that “90 percent” take out loans in excess of their education expenses, with many borrowing as much as they are allowed.

“They may do that when they really only need $2,000 or $5,000 more,” Holmes said. “Non-traditional students may need a lot more to make housing payments or to support families. But that is always something I talk about with students. When I have someone who wants to take it all, I try to reiterate that if they don’t get that job right after graduating, they might be in a pickle.”

While students may do their utmost to find other sources to pay college expenses, then carefully calculate what they need to borrow and get the best interest deals, it still results in graduates carrying debt. Inevitably, some run into problems.

Dr. Jerrid Freeman is NSU’s vice president of student affairs, which houses the university’s financial aid, scholarship and admissions offices. He said student affairs staff members go to high schools with presentations and seminars about student loans.

“They aren’t as well attended as we would like,” Freeman said. “The reality is a lot of people don’t ask questions because at that time they are just trying to figure out how to get in and aren’t as worried about the financial side. They want to get as much aid as they can. There are some who borrow more so they can still afford to go party, but you don’t need to do that. We want to give more advice to students because we know the cost of a college education, but we also know the value of it. You don’t want to be cavalier about your financial situation, and you don’t want to be paying student loans when you are 35 or 40.”

When a student or graduate has financial difficulties there is a danger of default, but Freeman said there is no reason to run from student loan obligations.

“All they need to do is call and talk to the right people,” he said. “They can slow or lessen payments. Default causes angst among students, and five or six years ago we probably had a default rate of 15 to 20 percent. Now it is down to about 5 or 10 percent. We have created financial literacy programming, and I think that is part of why the default rate has gone down. We get more phone calls and emails to students with financial debt and try to be a better advocate. It’s not about getting the money, but being a support network. We want to understand students’ troubles and partner with them.”

Those having difficulties also need to maintain contact with those holding the debt.

“About 60 percent of NSU students take out some type of loan,” Cochran said. “I encourage them to work with their lenders. It always helps. There are several plans and options available, including forbearance and income-based repayment.”

For information on CN scholarships, visit CN College Services at https://www.cherokee.org/Services/Education/College-Resources. For information on other scholarships, grants and loans, visit NSU Student Financial Services https://offices.nsuok.edu/financialaid.
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