Christine Filipkowski, 18, Candace Shoureck, 18, and Tyler Dickens, 19, discuss the financial situations that they are dealing with during their four years of college and what it will be like after they graduate from Hofstra University in Long Island, New York. (Jaclyn De Tore video and editing). Alternate view for video: http://blip.tv/file/2072562
Due to the recent recession, college students across the country have been in a state of panic. The question of, “How am I possibly going to pay for this?” comes up in daily conversation. Each student, however, has their own unique situation with money. After the jump, read about three Hofstra students and their outlooks on the financial aspects of their education.
Reporter Geoffrey Smith interviewed people in college and recently graduated about how they are dealing with the cost of their tuition. (Geoff Smith video and editing). Alternate video location.
With national credit markets continuing to shrink, one area of this crunch has a majority of college students feeling reeling with anxiety, college loans. According to the National Center for Education Statistics, 8,986,150 undergraduate students attended four-year schools in 2007. Of those, roughly two-thirds of them will have student debt.
From 2001 to 2006, the average cost of tuition and fees has risen 57 percent at public universities. With this increase in tuition fees, the size of loans that are being taken out are also growing. From 1994 to 2004, the average loan increased from $9,250 to $19,200.
For students at Hofstra, these facts are all too real. For Kimberly Ciano, 19, of Islip, NY, her dream for a college education has created a huge debt for her to cope with. She currently takes out $45,000 in loans per year. For her, debt is going to be a problem well after she graduates from school. As Ciano put it, “I will be paying off my loans until I’m 80.”
According to the NCES, the average debt of students who take out loans is $10,000. Using www.finaid.org's financial calculator, a student who takes out loans totaling $15,000, would have to pay 172.62 dollars a month for ten years to pay off their loan, if they are given a relatively low 6.8 percent interest rate.
The average student out of college is being offered $48,515 a year, according to Business Week. For the student with $15,000 in loans, almost 5 percent of their income will go towards student loans. For Ciano, who will graduate with $160,000 in debt, she will spend almost half of her wages on student loans if she manages to make the median average income.
However, with all of the growth in student loans, sometimes a loan is not always a bad thing. Dan Wandell, 19, of Pembroke, MA, said that “a small amount of debt…is actually beneficial because it establishes good credit if you are able to pay it off”. The importance of paying off student loans is critical after college, as these payments are usually the first step in a line to build good credit scores.
At LendingTree.com, the majority of tips given for student loans are to pay them off as quickly as possible. While some students may have problems with the size of their loans, making the payments on time is key. Lending Tree also suggests saving early, and trying to pay a bulk of your student loan right when the payments start to avoid defaulting.
Students who are most likely to take out loans are Pell Grant recipients. According to NCES, in 2004 88.5 percent of Pell grant recipients took out loans, with one-fourth of those students taking out Pell Grants averaging a debt of $27,625. In comparison, education debt was 12% higher for those who received Pell Grants as opposed to those who didn’t.
Nate Meyer, 25, of Manhattan, managed to pay off his student debt within a year, by “the stock market, actually. A couple of good investments.” Although Meyer’s story is pleasant to hear, reality is very different for most students.
Numbers released by the U.S. Department of Education show that the default rates for federally guaranteed loans reached 6.9 percent for the fiscal year 2007, up almost two percent in the last five years.
As part of his budget proposal, President Obama is trying to cut Federal Family Education Loans. These loans make up a majority of student loans, and they are used to help subsidize private lenders. Under the FFEL program, private lenders are guaranteed to get back almost every dollar they lend out in student loan, and these dollars are guaranteed by tax payers. Obama wants to cut the FFEL program permanently, and instead replace it with only government Direct Loans.
As the global economy continues to grow, and a higher education becomes more important in the job world, the average American is going to have to find a way to either save money for college, or make tough decisions about their future.
Please watch the video above to get a visual walk-through of your first time working with our Joomla-based content-management system. This tool is designed to allow each professor in a journalism class at Hofstra University to be able to create web pages and blogs for his/her classes easily and publish them on the Web, or to keep it unpublished and use it for viewing offline. Those stories that are published can then be selected by the student editors of NassauNewsLive for showcasing on the front page.
Each article should be entered individually, either by the professor or a student selected for this work. You can preview or publish below.
Written by Jaclyn De Tore | 
