Loans Can Be Good Things & Bad Things
Loans are good because they are a type of financial aid available to help you meet your educational expenses so you can graduate as soon as possible. Federal educational loans are unique. You can borrow up to set limits with no cosigner, no collateral and no credit check, and the application process is simple and straightforward.
Loans are bad because without realizing it, a student can get thousands, even tens of thousands of dollars in debt before graduating. That can make starting a career hard and far less rewarding. Further, you cannot have these loans canceled if you don’t complete your degree or because you’re having financial difficulties. So, if you're looking at borrowing, walk lightly. Borrow only what you really need to get through school. Then all that great money you're planning on making years from now will belong to you instead of the bank!
There are several types of loans available. Make sure you are familiar with the different types and terms before you commit.
- Stafford Student Loans
- Federal Family Educational Loan Programs (FFELP)
- PLUS Loans
- Alternative/Private Loans
Common Loan Questions
It's likely I'll have to borrow every year to pay for my college expenses.
Planning ahead is essential to managing debt. If you plan to borrow each year you are in school, estimate the total amount you will borrow. Then use a sample loan repayment table to calculate how much you will have to pay each month. To decide how much to borrow, as a guide you can use the criteria lenders use when they consider an applicant's ability to repay. They expect that the total monthly payment for all debts should not exceed 8 percent of your gross monthly salary. So, check on your major as to the average starting salaries seen by recent graduates, estimate what living expenses will be like for you and the difference should be a good estimate of maximum borrowing you will want to stay below.
If I borrow from more than one loan program, I may have to pay several different lenders at the same time.
If you've borrowed from more than one type of loan program, you may be able to consolidate some of the loans and use one payment plan to repay the loans. In general, federal loans may be consolidated into one new loan at an interest rate of the weighted average of the original interest rates of the loans being consolidated. The length of the extension depends on the total amount of the loans consolidated. PLUS Loans are not eligible for consolidation.
Since approval of some non-need-based student loans and most parent loans is based upon credit history, you may want to order a credit report if you will need these loans to finance part of your education. Check the report closely for accuracy and resolve any erroneous information prior to applying for educational loans.
The following agencies can provide you with a credit report:
Equifax Credit Information Services: 800.685.1111
Trans Union Corporation: 770.396.7011
Student Debt at SWOSU
We often see and hear reports of the crisis related to student debt. For many college students, this is a very real and important issue. Fortunately, SWOSU is extremely competitive when it comes to students’ costs when comparing us with our peer institutions.
Although individual situations will vary, it is important to point out that the statistics related to SWOSU show a much different story from the national numbers. Currently, at SWOSU, 55 percent of our undergraduate students have NO DEBT. For those students who do graduate with debt and an undergraduate degree, that amount averages $14,363 per person.
National statistics show that in 2015, 68 percent of students who graduated from a public or private non-profit institution had student loan debt. In 2017, the national average debt each student carried was $28,650. Unfortunately, these national numbers have increased since that time.
If you have previous student loans, you may access your individual loan borrowing history at NSLDS Student Access.
Borrowing student loans is serious business. Although loans can be great in helping you attend college, these legal obligations can also become quite a burden during repayment. We don't want you to borrow loans without understanding the responsibility. Neither does the federal government who requires Entrance Counseling be completed before you can receive any loans.
Read more about Entrance/Exit Counseling.
Rights & Responsibilities
As the borrower of a student loan, you have the right to:
- Receive a loan disclosure statement with your loan funds that lists your interest rate, estimated total interest costs, and total indebtedness.
- Receive a repayment schedule before your payment is due.
- Be notified in writing if your loan is sold or transferred and the address to which you send your payments changes and be given the name, address and phone number of the new holder.
- Request a deferment or forbearance if you have difficulty making payments.
At the same time, you have the duty to:
- Adhere to the responsibilities described on your student loan promissory note once you've signed it and endorsed your check or accepted your EFT funds. You have made a legal agreement to live up to these responsibilities.
- Also, you must inform the holder of your loan if you:
- Change your name, address or phone number
- Transfer to another school
- Go on leave of absence,
- Withdraw from school
- Change your graduation date.
Repay your loan!
Learn More about Loans.