The Effects of Student Loans
With the continuing rise in cost of attendance at colleges and universities across the country, students are forced to take out federal student loans, or private student loans in order to be able to afford college. Most students don’t have the means to pay thousands of dollars out of pocket for years therefore they suffer through the process of having student loans.
Education plays a big part in how students deal with having these loans. Most students aren’t educated on the effects of student loans and how to deal with them, therefore, many students end up with massive debt or ruin their credit. Here at Central Michigan University, a lot of students have loans whether it’s federal or private and continue to have to borrow more or stress out about how they’re going to be able to afford college because CMU is steadily increasing tuition and adding on extra student fees.
Students today, are borrowing more in loans as universities continue to raise tuition and fees. According to a U.S. News article, the cost of higher education continues to rise as student debt rises. It’s like a never ending battle between the two because once a university increases their tuition that forces students to take out more loans and they’ll just never have enough money to fully cover the costs along with putting themselves in more debt.
According to a CM Life article, the Trustees board just passed a new 3 percent tuition increase for the 2019–2020 academic year at CMU. This raises continuing student rates to $430 per credit hour, new incoming upper-level students to $434 per credit hour, and new incoming lower-level students stay at $417 per credit hour. Students were upset when this article surfaced and shared their anger and concerns all over social media.
This chart depicts the clear tuition increase for in-state students over the years at CMU and it looks to be on a continuing path. As far as out-of-state, they seem to be keeping the same credit hour rate over the years. These numbers come from a chart on Central Link that displays the tuition and fee history rates at CMU .
Although students loans seem to be such a negative aspect of the average college student’s life, it does have a positive side to it.
Majority of students depend on student loans in order to be able to attend college because they can’t afford to pay for it on their own. It can be used to help relieve some financial stress on students throughout the academic year by covering the costs of some necessary expenses. Some students use it to buy their books, pay rent, school supplies, etc. Student loans can also help build up credit if paid off fully and on time.
On the other hand, having student loans can accumulate a lot of debt depending on how much someone borrows over the years. According to Journal of Economic Psychology, men are more likely to be in debt than women. Also, higher levels of debt and greater tolerance of debt were found in students who had been in college for long periods of time. Paying off the debt is something the average college student worries about the most. There can be extreme consequences for not paying off loans so it’s something students need to begin thinking about early and setting up the necessary arrangements in order to do so.
Keonia Thompson is a sophomore here at Central Michigan University and shares her experience so far with student loans. She states that being a first-generation college student is very tough in almost every aspect especially financially. Student loans were very new to her but without them she most likely would not be in college today.
One of her main concerns with students loans besides obviously paying them off in the near future, happened to be her student loans not fully covering her tuition once CMU made their tuition increase. This makes it harder and more stressful on students because this forces them to have to figure out other means to pay off the remainder of their tuition which will more than likely result in taking out more loans. “FAFSA gives you a set amount of money for your loans and regardless of how much money you owe left, they don’t go over that,” Thompson said.
Student Loans are a very detrimental part of the average college student’s life and it allows them to reach their full potential and have the privilege of attending higher education. Although student loans definitely has its cons, there should be ways to educate students and provide them with the necessary tools to make the right decisions.
