New staff member helps students combat loans

Natasha Roque/Contributing Writer

FIU has officially hired a new, full-time default prevention coordinator, Gabriela Mendez, to offer students personalized loan counseling to ease their financial burdens and put them back on the path towards overall improved financial prosperity.

A recent article on detailed the results and analysis of a study conducted by EverFi—a leader in education technology—and sponsored by Higher One entitled “Money Matters on Campus: How Early Attitudes and Behaviors Affect the Financial Decisions of First-Year College Students”.

The study dissected several contributors of widespread financial mismanagement among college freshmen and urged universities to become more aggressive in their financial literacy campaigns, especially in the case of those schools enrolling large amounts of first-generation students.

“I’ve learned that the most confusing part about college is trying to understand the financial aspect of it. Understanding how your scholarships, grants and loans work is an essential ingredient in the recipe to a successful college career,” said FIU freshman and international relations major, David Rodriguez. “I definitely wish I could understand it better.”

According to Celia Melis, Assistant Director of the Office of Financial Aid, some of the default prevention coordinator’s responsibilities will include managing and monitoring the cohort default rate (the percent of students entering the repayment phase of money borrowing during the federal fiscal year), assisting students with loan counseling and moving forward and implementing a financial literacy initiative involving other departments throughout the campus such as Academic Affairs.

“Students’ financial literacy is a shared responsibility. First and foremost it is the student’s responsibility to learn to be good managers of their own finances. Our responsibility is to provide resources and opportunities for our students to learn how to do that. At FIU we are in the early stages of taking a more assertive approach to partnering with our students in this area,” said Melis.

Melis said the following months at OFA will revolve mostly around reaching out to students already working to repay their loans and struggling with the large monthly payments. It will also be taking on many delinquent accounts running the risk of default.

“There is a ‘spend now, pay later’ mentality until the bill arrives and there is that shock effect,” added Melis. “I’ve worked with many students throughout my career from community college to medical students who at graduation are stunned that they have borrowed so much money.”

Among other factors, the study found that one major contributor to incurring debt so early on was many students’ lack of affiliation with any one banking institution. Additionally, it asserted that poor, uncorrected financial behavior adopted by a great portion of first-year college students is often correlated with negative impacts in financial standing later on in life.

According to Melis, nearly 30 percent of college students drop out of school, and roughly 80 percent of these students end up defaulting.

“Realistically, low-income students who in many cases are your first-generation, your immigrants, minorities, etc. are the neediest students who end up with the highest debt, underemployed and are the least literate in financial matters,” said Melis.

Upon first accepting loans, FIU requires students to partake in an entrance-counseling seminar where first-time borrowers are walked through loan fundamentals, including options for repayment, interest rate calculation, and Master Promissory Notes —the function by which universities gain the authorization to credit loan funds to students’ accounts.

However, with a new Default Prevention Coordinator on board the FIU staff, students can gain more personalized, step-by-step guidance to borrowing money and coming out of student debt cleanly.

“I worry a lot about the financial stress that might come up later on in my life if I don’t pay off my student loans quickly after I graduate,” noted FIU junior and business major, Amanda Romero. “I think this is a great advancement for FIU because I know that there are lots of other students out there like me who want to talk these problems out with someone who will be able to guide us in the right direction.”

Mendez was unavailable for comment as of press time for this story.

Students interested in speaking with Mendez can stop by the Modesto Maidique Campus Office of Financial Aid anytime from 8:00 a.m. to 5:00 p.m. on Mondays, Thursdays, and Fridays, and from 8:00 a.m. to 7:00 p.m. on Tuesdays and Wednesdays.