Guide to Education Grants

The following article by Chris Studer, Chief Executive Officer of ScholarPoint Financial, Inc.is courtesy of Higher Education Washington, Inc. http://www.hewi.net/ 
Financial Aid Advice
 
ï‚·  7/26/07 AVOIDING STUDENT LOAN DEBT STRESS Recent graduates are leaving college stressed out over how they are going to pay back their student loans. No wonder– nearly two-thirds of students graduating from four-year colleges and universities now have student loan debt and the average amount of that debt has more than doubled from $9,250 to $19,200 since 1993. The ability to manage money isn’t a prerequisite for graduation – today’s grads might be rocket scientists and brain surgeons, but that doesn’t mean they can manage their own finances. When the bills start arriving, many new grads feel overwhelmed by what seems to be an insurmountable debt load, causing stress and anxiety, sometimes risking their health as a result of anxieties over trying to deal with debt. Although there is minimal research connecting unpaid debts to health problems, many experts are convinced such a link exists. At ScholarPoint, we believe that new grads have enough to be stressed and anxious about: landing that first job; finding affordable housing, making new friends and all of the responsibilities of adulthood. Along that vein, we would like to offer a few tips for those readers who are parents, advisors and mentors to these new graduates. First and foremost: Recent grads must understand that student loan debt is not a weakness but a fact of life in the 21st century. Unfortunately, the perceived stigma of debt often causes the student to feel embarrassed or ashamed and many just stick their “heads in the sand,” hoping that if they ignore the bills, they will go away. Reassure them that going into debt in order to finance a higher education is a wise investment in one’s future and that they are not alone in their plight. Millions of people struggle with debt and bills everyday, financial pressure creates a great deal of stress on most American families. The best solution to controlling debt and keeping financial problems at bay begins with information and knowledge, which is the next step: Arm them with information about their debt, repayment options and available resources to assist them in managing their debt load. One important option is student loan consolidation, which is designed to make education loan repayment easier by combining existing eligible federal education loans into one new loan with a fixed interest rate and a lower monthly payment. Consolidation is a bit of a misnomer because a single loan can be “consolidated” to take advantage of better loan terms. The last and most difficult piece of advice is telling them to make a budget and stick with it. This includes keeping a careful eye on credit card spending, which can be hard to resist. Advise them to carry one or two bank credit cards, close unused credit card accounts and voluntarily lower the amount of their credit line to limit the total debt they could accumulate. Student loans have become a fact of life in 21st century America. It’s up to us – all of us, not just lenders and schools, but parents, friends, family and mentors must work together to help today’s college graduates understand and manage their student loan debt.
 

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