Loans, jobs and cost-cutting all add up
Economic uncertainty means many families – regardless of their eligibility for need-based financial aid – will have to dig deeper to keep the dream of a college degree alive.
That could mean more student loans or campus jobs, or finding new ways to save money. As families figure out how they’ll do it, here are some things to consider:
Protect retirement savings
Clara Capron, Western’s director of financial aid, is concerned by an increase she’s seeing in parents who are cashing in some of their retirement savings to pay for college. Student loans, as long as they’re within a reasonable debt load, are probably a better option, she said.
“There’s an old saying that you can’t borrow your way through retirement,” Capron said.
About 55 percent of Western’s class of 2007 graduated with some student loans, an average of $15,674. That’s less than the $18,842 national average of public university graduates that year.
And Western students have the lowest federal Stafford Loan default rate, 1.2 percent, of any of the state’s four-year public institutions.
SallieMae advises that student loan payments shouldn’t be more than 5 to 10 percent of monthly income. Students can find calculators online to estimate their future monthly payments after graduation.
Homework: Job search
Jobs may become increasingly important to students who are struggling to make ends meet. But getting a job doesn’t have to hurt students’ academic performance, Capron said. Actually, working 10 to 15 hours each week can boost students’ performance by helping them manage their time, she said.
And campus jobs are available to students regardless of their financial aid eligibility – about 80 percent of campus jobs are open to students who aren’t receiving Work Study.
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