Jason Barelman, the Wayne State College director of Career Services, offers this advice to graduating seniors on how to handle their student debt.
“I think if students really work hard, apply themselves, and get experience, they will do very well in the work force,” Barelman said.
According to Student Loan Hero, the average college graduate in 2016 is $37,172 in debt. As of 2016, more than 44 million students in the United States had debt.
“Our students do very well in the workforce, and as far as meeting their debt, as long as they’re not in extreme debt from overspending, they’ll be successful in paying (that) off,” Barelman said.
WSC graduates have an average of $23,492 in student loan debt, according to Director of Financial Aid Annette Kaus.
“I just think that it’s a matter of setting your priorities. You can’t wait for somebody to pay your bills for you,” Barelman said. “Our students aren’t graduating with a (substantial) amount of debt. With the jobs they are getting when they graduate, and if they just set their minds to paying that (debt) off, they can do it.”.
Debt is something that students have been told is a part of life, and they understand that college is expensive.
How many people are truly getting the full potential use out of their diploma?
According to the job placement firm Adecco, 60 percent of college graduates in the United States can’t find a full-time job in their chosen field.
At WSC, 72 percent of graduates are employed in their field of study.
However, 18 percent of students attend graduate school, which brings the percentage of students still in their field of study to 90 percent, according to the college-run census.
While student debt at WSC is relatively minimal compared to that of some other colleges, it’s still important for students to know how to handle their debt.
Kaus explained exactly what students do with their debt.
“(Debt is payed off) by making regular, scheduled payments directly to your loan servicer,” Kaus said. “Often times you can sign up for automatic debit so your payments will be automatically taken from your bank account each month.”
Many people who owe loan debts aren’t sure exactly where their money is going.
“Each loan is assigned to a loan servicer that handles all billing regarding your student loan. You’ll need to make payments directly to your servicer,” Kaus said. “Each servicer has its own payment process and can work with you if you need help making payments.”
Kaus also explained what interest is and how time affects your loans.
“Interest is money paid by the borrower to a lender in exchange for borrowing money. It is calculated as a percentage of the unpaid principle amount of the loan. The amount of interest that accrues (accumulates) on your loan from month to month is determined by a simple daily interest formula,” Kaus said.
“This formula consists of multiplying your loan balance by the number of days since the last payment times the interest rate factor (which is determined by dividing your loan’s interest rate by the number of days in the year),” Kaus said. “ There is no penalty for paying your loan off early, so if you have the resources, go ahead. It’s really a matter of your personal budget and what you can afford to do.”
Kaus also mentioned that making your loan payments on time is very important, as a loan will affect your credit.
“Loans will be on a person’s credit report. If the loan is in good standing that will reflect well,” Kaus said. “(If a you miss a payment) contact your loan servicer right away. They have several options available to help you keep your loan in good standing.”
Kaus also explained what happens to a loan if the worst happens to a student.
“If the borrower of a federal student loan dies, the loan is automatically canceled and the debt is discharged by the government. No one has to repay it, “ Kaus said.
Many students actually might go back to school and take classes later in life to either get a degree in another area of study or to get a bachelor’s degree.
“Students who are back in school on at least a half-time basis may get an in-school deferment,” Kaus said. “The loan servicer can tell you what you need to do to get your loans into this status.”
What makes this worth it? Why are so many students OK with being in so much debt?
“It’s a debt for something that no one can ever take away from you; no one can ever take away your college experience. It will never get old and broken down,” Barelman said, “A vehicle is something that will be gone, and if you look at it that way, it’s a debt that you will always have something to show for it, and you can make the payment manageable.”