Debts come and go


By Djamila Noelle Grossman
Arizona Daily Wildcat
Wednesday, May 11, 2005

Graduation is surely a time of joy for many students, but it is also time to worry about responsibilities in life.

Student loans are one responsibility and need to be paid off in a long-term financial commitment.

Though many students handle the burden well, there are things to be considered that can save a lot of money and headaches.

In order to keep loans and payments under control, students should only take out the amount they really need and pay it back as quickly as possible, said John Nametz, director of need-based aid in the Office of Financial Aid.

"If you can't pay off the loan in 10 years, it's too big of a loan," Nametz said. "Keep it to a minimum and don't borrow unless you have to. From a financial point of view, move fast and start earning your money."

Nametz said college students handle their loans responsibly and most pay them off on time.

"Our students are paying off their debt, it's just a simple fact," Nametz said.

The average loan amount for resident students was approximately $16,400 in 2004, according to an Arizona Board of Regents survey based on Arizona State University, Northern Arizona University and UA reports.

UA students are normally slightly below the average, according to the survey.

Stacy Schiller, communications manager at Wells Fargo education financial services, said she recommends students contact their bank within the six-month grace period they have after graduation to work out a payment plan that best suits their needs.

"We encourage students to not be afraid to call their lender," Schiller said, adding that they should "take their responsibility seriously."

Interest rates on student loans are the lowest in 30 years but are expected to rise after July 1, Schiller said.

But students are able to nail down interest rates to 2.75 percent with a consolidation loan, which also enables them to pay off the money at a slower rate than the standard payment period of 10 years.

Students can also get up to a 1 percent discount if they prove to be responsible and make payments on time, said Schiller, who added how loans are also a good opportunity to improve the credit, which is important once people wish to purchase a new car or a house.

Emily Buckwalter, an accounting graduate student who will graduate this year, said she has to pay off $17,000 in student loans from her undergraduate degree.

Buckwalter said she always knew the debts had to be paid off after college and plans on doing so within 10 to 15 years.

"I'm not worried about it too much, but it's on my mind," Buckwalter said.