By Morgan Kelsey, sophomore at Texas Tech University and credit union advocate
Taking out a loan is intimidating for anyone. If you have never taken borrowed money, the intimidation is increased. For college students, unless you come from a wealthy background or win the lottery, paying for college without a scholarship, grant or a loan seems impossible. Many college students go in without the knowledge of what getting a loan really means, and they do not have Mom or Dad there to help them understand what they are truly doing.
For students that have recently graduated from college, the burden of loans is heavy with the rising cost of continued education. The total amount of outstanding student loan debt in the United States now tops $1 trillion. To make matters worse, recent graduates have been emerging from colleges and universities, with diplomas in hand, into one of the worst job markets in living memory. Though there was a higher unemployment rate in 1981-82, at 12 percent, the combination of high unemployment and high student debt is a new occurrence.
On top of paying for college, students take out loans for other things too such as cash for spring break or summer, a car purchase or to help pay for housing. These added loans increase the student debt. The key is to know what you are getting yourself in to and understand every aspect of the loan. Things to look for are interest rates and how long you have to pay off the loan. Here are other tips:
- Majoring in sciences, business and math make you look more marketable to employers and getting your desired humanities or arts as a minor will help you do what you love and pay off the loans.
- Limit borrowing and maximize scholarship opportunities and government grants that you do not have to pay back.
- Know the rates of the loan.
In many cases, credit unions have lower interest rates than banks, and they will work with you to help you pay off your loans. Personal loans are highlighted this summer at Unity One Credit Union. Rates as low as 5.99% APR for 36 months are offered. Not too bad.