USU students good about taking out loans
Though findings of the U.S. Public Interest Group reported in Reuters say that as many as 78 percent of students underestimate the final cost of their student loans by about $5,000, this isn’t common at Utah State University.
“We try to keep [students] informed,” said Dina Nielson, a Financial Aid Counselor at USU.
According to Nielson, the average loan received by students is the federal Stafford loan in the amount of $5,000, though some students, for example, those studying flight technology, may need a much greater amount of money.
“They borrow upwards of $10,000,” Nielson said.
Students need not worry when taking out federal loans.
The state agency will work with students to make sure they don’t have to go into default. Defaulting on a loan carries some serious consequences.
“If you default on a loan, it’s the same as defaulting on a credit card,” Nielson said.
That can result in an unfavorable credit rating, making it difficult to impossible to gain credit in the future.
“There are a million ways not to go into default,” she said.
Students can get forbearance, meaning payments are put on hold for up to a year. Their rate can be changed or payments deferred.
“There’s no excuse for a default,” she said.
USU has the second lowest default rate in the state of Utah, she said.
“The national average is 10 percent,” Nielson said. “Ours is 2.6 percent.”
According to Nielson, a lot of students put their education on credit cards. Unlike credit card payments, students do not start paying for loans until after they graduate. The highest interest rate a student loan will reach is 8.25 percent, whereas typical credit card interest rates are about 18 percent.