May is quickly approaching. While graduation is an exciting time, what comes next isn’t exactly thrilling — paying off student loans. For students graduating in May, the time to pay off loans will be here just as fast as graduation.
The problem is, most students are unaware of their responsibilities when it comes to student loans and how to go about paying them off.
“Parents are heavily involved in the beginning steps to getting student or personal loans,” said Julie Dunn, Director of Financial Planning at Loras College. “But when it comes time to pay them off, it lands on the student. Oftentimes, the student isn’t aware of his or her responsibilities … or how much they owe upon graduation.”
In 2016, 79 percent of Loras graduates left with student loans. That number doesn’t include students who took out credit cards and personal loans.
The percentage of students nationwide that borrow money to pay for college has gone up in recent years. Still, most students are unaware of how these large amounts of money work. Loras tries to ensure graduating students are aware of what they borrowed, how to pay it off, and when it’s due.
“We host an event that features presentations on different topics regarding finances before students graduate,” said Dunn. “Each student has their own folder with all his or her information in it. We make sure each student has a chance to review this information and ask questions.”
Depending on the loan, students have up to three months before they must start making monthly payments. The interest rates are high, the payments are constant, and it can be overwhelming for graduates.
Dubuque area educators are taking steps to prevent students from going into college confused. From now on high school students in the Dubuque Community School District will be required to take a personal finance course before graduating. This new requirement was passed by the school board in early November; the decision was almost unanimous.
In recent years, it’s become clear that many students are unaware of their responsibilities for student and personal loans. The new high school graduation requirement will help students understand their responsibilities before going to college and before they are in debt.
Personal finance is an important part of everyone’s life, both before and after college. The financial health of the typical college graduate is less than ideal. Loras College and the Dubuque Community School District are two institutions working to improve the situation.