The Panther Newspaper: Don’t drown in debt, keeping finances afloat

Graphic by Nita Faulkner.

Alex Rushka was paying $27 a semester while attending community college. Then he transferred to Chapman and suddenly needed to take out student loans in order to afford his education.

“I’m not even thinking about (paying back my student loans) right now. I’m trying to make sure I can pay rent and have food to eat,” the senior communication studies major said. “I’m definitely just going to have to bite the bullet and pay it off eventually.”

Rushka said that going to community college and then transferring saved him a lot of money, but he also thinks that you get what you pay for when attending a smaller, private university such as Chapman.

According to America’s Debt Help Organization, more than 70 percent of students who graduate from a four-year college have student loan debt — which represents about 1.3 million people currently affected by the student debt crisis.

“I do believe that (the student debt issue) is getting worse,” said Nicky Wilks, ’10 business alumnus who also graduated ’13 with his MBA. “I do feel like there is heightened awareness about the problem, but I haven’t really seen any changes of policy that would signal that things are getting better.”

Wilks had to finance his education entirely on his own, so he said it was necessary to take out both federal and private loans, and he’s still trying to pay them all off.

“(The government) likes to place young people in a tough spot and allow them to make financial decisions that can basically affect them for years of their lives,” Wilks said. “I don’t think it’s ethical to lend money to people who don’t understand what they’re doing.”

While working in the admissions office at Chapman, Wilks said he handled a lot of financial aid questions and worked with scholarships.

After the financial crisis, he noticed that peoples’ No. 1 concern became their ability to pay and he doesn’t think that has really changed.

David Carnevale, director of the Office of Financial Aid, wrote in an email that the student debt crisis is a compound issue that extends far beyond just student debt.

“More students are becoming more dependent on student loans because their families have been unable to save for college expenses. Families have been unable to save for college expenses because one or both parents have been out of work. Parents are out of work because of the downturn in the economy several years ago,” Carnevale wrote. 

Some ways to pay off loans faster, according to Carnevale, is to start making small payments while you’re still in school or increasing payments beyond the minimum amount. 

Carnevale wrote that the first step in paying student loans back after graduation should be to speak with your loan servicer to see what types of repayment plans are available. He advises that you always be honest and realistic about your career goals when speaking with your loan servicer because certain career paths may offer loan forgiveness programs.

“If you are considering working in the government or for a not-for-profit organization, you may qualify for loan forgiveness under the Public Service Loan Forgiveness Program,” Carnevale wrote. “After you make a certain number of on-time payments, the federal government forgives all or a portion of your remaining balance.”

For Wilks, one of the biggest reasons he applied for a job at Chapman was because the university paid for him to attend graduate school as one of his benefits. Even so, he’s still paying back all of the student loans that he took out for his undergraduate degree.

“I think setting up auto payments is the way to go,” Wilks said. “Having a checking account specifically for those auto debits to be made, a separate checking account from the one that they use and having payments automatically transferred.”

Rushka said that you shouldn’t be ashamed to turn to family members when you’re in financial need.

“Asking for help from your family is not a big deal,” Rushka said. “They’re there for you and it took me a while to realize that.”

Photo courtesy Pexels.