At times, I seem to forget that adult life is not so far away anymore. I’ve now just begun my fourth year out of five at Northeastern University, a year that at most other institutions would be my last year at university. Due to my participation in the co-op program, I’m on a 5 year track. As graduation looms ever closer, that extra year is providing a nice cushion from the harsh realities of the real world that I have so far been able to keep at bay.
Repayment of my accumulated loan debt is one of those realities I have been staving off as long as possible. Deciding how to fund secondary education is, as I see it, the most significant financial decision most of us will make in early adulthood. As a student at one of the priciest private institutions in the country, my total investment will tally over $200,000. This astronomical amount has been funded through a combination of sources. I received a hefty merit grant from NEU for my achievements in high school, and my parents help as much as they can afford. Unfortunately, like most students, I have had to lean on federal and private loans as well, and will graduate with a significant amount of debt.
And so, it has been disheartening to read recent reports on student debt. The Department of Education just released new report on loan default rates for graduates, which can be found here, and Pew Social Trends is now showing that a record 1 in 5 American households now owe some student debt (read the full report here). While I’m already part of the 1 in 5 debt holding households, I want to make sure I don’t fall into the defaulted graduate category.
Thankfully, I have worked part/full time during my entire enrollment and will be able to pay off much of the debt thanks to this. Another option I just recently learned about is income based repayment. Through this program, I can make payments based on my earned wage after graduation that would be less than my normal payments. The Federal Student Aid website has a lot of great information on who qualifies and how the program works, but I think it is something more students need to know about.
While it isn’t something you probably want to be thinking about as a college-bound high school senior, students should be aware of the financial reality that accompanies a secondary education. Furthermore, students should consider all the different funding sources available. For me, it was private loans, public loans, scholarships, grants, and some help from my parents. For my sister, it has been enlistment in the Army Reserves, who will help her with tuition payments. For some of my friends, it has meant a gap year working and saving before freshman year. No matter your path, for determined students, there is a way to fund it. Students should just realize all their options before deciding and make sure that on graduation day, they are ready to meet the financial reality that awaits them.
Ian Mabie is a student at Northeastern University and is the communications co-op at the Office of Consumer Affairs.
Car Buyer Beware: ”Buy Here Pay Here” Used Car Financing and Sales are Riddled with Pitfalls posted on Mar 23
Many consumers need a loan to purchase a used vehicle. Consumers with poor or no credit will often seek financing from the dealer they are buying a car from. This financing is commonly referred to as “Buy Here Pay Here,” and it lets dealers …Continue Reading Car Buyer Beware: ”Buy Here Pay Here” Used Car Financing and Sales are Riddled with Pitfalls
Apps – Access Denied posted on Mar 21
Almost everyone is guilty of passively downloading a new app for their mobile device. And why not? Apps are great. But consumers should recognize that there are risks in the marketplace. A woman from California used her debit card to buy a slot machine …Continue Reading Apps – Access Denied
Can You Hear Me? posted on Mar 20
Scammers are constantly inventing new ways to take advantage of consumers. The latest phone scam to keep your ears open for has made up the majority of the reports to Better Business Bureau’s scam tracker over the last several weeks across America and even Canada. …Continue Reading Can You Hear Me?