Are Students Prepared To Confront Tuition Debt?

Sebastian Alsina / Staff Writer

Loans can be one of the most perplexing things about the financial world ever. In accounting, they are reflected as “credits”, in banking they are simply referred to as “lending money”, but for students, they’re known as headaches.

Tuition costs have increased over the years, the average cost of public tuition, four-year college will cost about $9,410 for in-state and $23,890 for out-of-state students per year according to College Board.

At FIU the cost of tuition per semester is $3,084 with a total of $23,376 for both Fall and Spring.

As a result, 4-year colleges and universities seem to be out of reach for many incoming students. 

Worse of all, students who seek higher education are sometimes scared off by financial terms such as “APR”, grace periods, or credit history.

According to a survey on college finances conducted by PantherNOW, only 16.67% of the students surveyed have applied for a loan. 

Graph showing students who have applied for loans and have not

For many students, avoiding a loan, in general, is near impossible. If you are a student who cannot avoid a loan for your education, no worries. Try your best to get a low-interest rate, and if possible, try to go for a grace period that allows you to start paying your loan once you graduate.

In addition, Parent Plus federal loans are a great alternative to get a better loan offer by applying with your parent’s credit score. 

Additionally, in PantherNOW’s college finances survey, 66.67% of the students reported that FAFSA is not enough to cover college expenses. 

Graph showing the results of students asking if they think FASFA is enough to cover college expenses

After analyzing the students’ opinions on college finances, it is clear that there is a lack of information and the student body is not financially savvy. 

“When it comes to student loans, only borrow what you will be able to pay back. If your expected income after graduation is going to be modest, be very careful to avoid excessive use of student loans,” according to Dallin Alldredge, FIU professor of finance.

The concept of using what you can pay back is big in the world of finance. Remember, interest will make you inherently pay more.  

This was followed up by Alldredge as he states “One clear way to reduce your debt burden when you graduate from FIU is to graduate on time. Each additional year in school will significantly increase the debt that you will be responsible to pay back after you graduate”. 

That being said, the question must stand about how to best position yourself financially during college. Ideally, building credit is a solid way to get ahead of your financial life. Building your credit allows you to pull larger loans for a car, a house, and other major investments.

However, many students see credit cards as traps and this is not entirely true. 

“Don’t fall into the trap of excessive credit card debt in an effort to build up your credit. The use of a single credit card that you pay off every month will do a great deal to establish a modest credit history. Over time, with the responsible use of debt, you can elevate your credit score”, said Alldredge.

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