Special Report: The Burden of Student Loans

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KIMT News 3 – Halloween is a day to embrace all things scary. But for many people, there’s nothing scarier than that monthly student loan bill.

According to the Institute of College Access and Success, the average undergrad faced more than $30,000 in loans last year. That means those students will pay about $300 a month for more than 10 years.

It’s the piece of mail that Mason City resident Ashley Murray dreads each month: Her student loan bill.

“I owe about $33,000. I pay $356 a month,” said Murray.

That payment takes a big bite out of her budget.

“It’s hard to see that much money come out of your account each month for the next ten years. I mean, that’s money that I could spend to go on vacation somewhere,” Murray said.

But like so many others, borrowing money was her only option.

“I would not have been able to go to college without the loans, grants or anything like that,” said Murray.

But there are ways to reduce the burden. We turned to financial aid directors at two local colleges for some advice.

First, start early.

“As soon as that baby is born, as soon as you have that bundle of joy at home, start looking at some of the education savings accounts and things like that through the state. Set up a plan and start putting in small amounts and increase it as the children get older,” said Duane Polsdofer, Director of Financial Aid at Waldorf University in Forest City.

Take advantage of “free money.”

“Try and get as many scholarships and grants as possible. That starts their freshman year of high school, to work on their grades and things like that,” Polsdofer explained.

Start with federal loans instead of private.

“They have a lot of provisions in them that protects the students in case they have financial difficulties down the road to help them out. They also most likely have better interest rates, or interest rates that are going stay lower over the long haul,” Polsdofer said.

Next, do it yourself.

“Do your loan requests, do your entrance counseling, do it all yourself so you know what you’re getting yourself into,” said Patty Hemann, Financial Aid Director at Riverland Community College.

Consider starting at a community college or technical school.

“A lot of times if students attend a 2 year college, they’re able to live at home and really minimize expenses. And our tuition is much cheaper than a 4 year university,” explained Hemann.

And finally, know what you owe.

Murray considers her student loans an investment in her future, making that monthly bill a little less painful.

“I’m very fortunate with my job, I can afford my student loans and other bills that I need to pay,” said Murray.

Of course, not everyone is that fortunate. To get some advice for those struggling to pay back student loans, we turned to the Consumer Credit Counseling Service of Northeastern Iowa’s Mason City branch.

The main piece of advice to remember is never let your loans go into default. There are many options if you’re having a hard time making your payments.

“If you’ve gotten out of school and if the 6 months is up and now you have to pay and you don’t have that job, you can contact your student loan company and work with them to look at an income based or an income driven repayment plan. Because then they determine by your income over the last year what your payment will be,” said Kathye Gaines, Branch Manager of the Mason City Consumer Credit Counseling Service.

Agencies like the Consumer Credit Counseling Service can also help you figure out the best option for paying off your loans.

Student loans have been a hot topic on the campaign trail, with both Presidential candidates making their pitch for how to deal with college costs. To find out how both Hillary Clinton and Donald Trump plan to handle higher education if they’re elected, click here: https://www.nasfaa.org/2016_presidential_candidates

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