Charles Ratliff has taken his last college test.

There will be no more lectures, labs or homework assignments. With a bachelor's degree in English and a master's degree in journalism, Ratliff has no more college perquisites to satisfy. Yet, it will be 25 years before he will be allowed to put school behind him.

Ratliff has student loans.

Christine Erkman, program manager for the Office of Student Financial Aid, said students should take out a loan only as a last resort.

"If you can get by without borrowing," she said, "do it."

"Students don't understand," she said, "that by taking a student loan now, they are going to be stuck with payments for years down the road."

At $250 a month it will take Ratliff 25 years to pay back the over $60,000 in loans that he accumulated from three years as an undergraduate at Grand Canyon University and two years as a graduate student at the University of Arizona. He will also pay an extra $30,000 in interest - taking the cost of his college education to more than $90,000.

While Ratliff, by most standards, is an extreme situation, he is a good example of what students may face after graduation.

"Students don't realize the amount of money that they pay in interest," Erkman said.

She said a student with $23,000 in loans paying $275 a month at current interest rates (7.66 percent) will lose over $10,000 in interest in the long run.

"Students need to understand the amount of debt they are getting themselves into," she said. "Most students don't realize that there are fees added to your loans."

These annual fees are usually about three percent of the total loan, she said. They are used to provide funds to the guarantor in the event of default.

Students should also be aware that there are limits on the amount of Stafford federally subsidized loan money a student can borrow. A first-year student is only eligible for $2,625 in loans while a third-year student is going to be eligible for $5,500.

"If a student has $12,000 in need," Erkman said, "a $3,000 loan is not going to help them any."

Erkman said that these limits affect only federal student loans and a student or his parents could take out further loans from a private source if needed.

There are two types of loans available: subsidized and unsubsidized.

"In federally subsidized loans the taxpayers pick up the bill for interest accumulated until the borrower graduates." she said. "It is important that students understand what type of loan they have. If it is not subsidized they could be paying a lot of additional interest."

Another factor limiting the practicality of student loans is the student's future job plans.

Phyllis Bolt Bannister, director of Student Financial aid, said students should plan their borrowing based on projected income after graduation.

She said that students should plan to pay between 5 percent and 8 percent of their take home income to pay back loan debts.

A student who plans to make $19,000 a year immediately after graduation (a $17,000 take home income) would be able to manage between $74 and $131 a month. This student could reasonably handle between $5,000 and 12,000 in cumulative loans.

"You need to plan for your lifestyle," Bannister said. "The cost of living for where you will live, other responsibilities you have, and the lifestyle you want to live all affect your ability to repay loans."

Ratliff said he was very lucky to find his current job as news editor for the San Manuel Miner after graduating last May.

"I was offered several jobs paying $17,000 a year," he said. "There is no way I would have been able to repay my loans on that salary."

Ratliff said he would have trouble paying off his loans on any salary less than what he makes now. He currently receives a salary in the mid-$20,000 range.

Erkman said the most important part of the loan process for students is counseling and full understanding of what they are getting into.

"What students don't understand is that they start paying off their loan immediately after school," Ratliff said.

Once out of school, a student has the option to consolidate loans, Erkman said.

"If a student has multiple loans, the loans can be combined into a single payment through a process called consolidation," she said. "This makes the loan payments easier to monitor."

Ratliff said he is currently consolidating his different loans. He will end up paying more in interest under the consolidation plan.

If a problem should arise in a borrower's ability to pay the loan, Erkman said, it is important that they discuss the situation with the lender.

"Most lenders will work with you to set up a realistic payment plan," she said. "Lenders would at least like to see that you will pay back what you can rather than simply default on the loan."

The current cumulative net default rate at the UA is 4.01 percent, Bannister said.

Erkman said students who default on a loan by halting payments are reported to the credit bureau. They will have any income tax refunds confiscated and will not be eligible to receive any further financial aid until they have repaid their loan. In addition, most students who default on loans are not eligible to file bankruptcy.

Bannister said the most important thing for a student to do is to stay in touch with his or her lender.

"Keep our address up to date," Bannister said. "If for some reason you can't make a payment, call and explain the situation to the lender. Lenders are flexible when you keep them informed."

"I do not regret the route I took to pay for school," Ratliff said. "I knew what I wanted to get out of school and this is what I needed to get there."

"Loans can make a lot of sense," said Bannister. "It could mean the difference of $100 million in potential income with the difference of a Bachelors degree over a high school diploma."

Ratliff said he would advise students to get counseling before taking out a loan.

"Students should take school slow," he said. "I rushed through school in three years. If I had taken it slower I might have been able to get a job and avoid some of the loans."

Bannister said that 22,000 students at the UA currently receive some form of financial aid worth $191 million. Ninety million of this aid is in student loans. The average graduating senior last year left school with $9,300 worth of loans.

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