Students Struggle to Repay Loans

7 years 9 months 4 weeks ago Tuesday, September 21 2010 Sep 21, 2010 Tuesday, September 21, 2010 12:41:11 PM CDT September 21, 2010 in News
COLUMBIA - The national student default rate is the highest its been since 1997. At 7%, this means more students are having a hard time paying back student loans.

One MU student, with plans for a Master's degree in music fills out applications at MU's Student Success Center. He needs to get a third job to begin paying back a five year span of loans.

"I work a part time job at a gas station called QuickTrip, and then I teach students private violin lessons," explains Erik Hassell.

His school work and two jobs keep Hassell busy enough, he's barely begun to think about paying off his loans.

"As long as I'm still in school, I won't have to pay them back until that grace period is over."

For most government loans, that "grace period" is six months after a student graduates.

MU Financial Aid Director, James Brooks, said there are ways to defer payments.

"One of the things that I tend to caution students is don't borrow any more than you need," Brooks explains. "Yes, you may be eligible for more, but unless you really need it for an educational expense don't borrow it."

One of the easiest ways to avoid default is to budget costs before borrowing money. Brooks said there are different options for students who might be falling behind on their payments. Students need to keep in touch with their lenders if money does get tight.

The average MU student that graduates in 4 years, leaves with about $21,000 in debt.

But, Missouri's default rate is only 2.3%. Students that are at risk of defaulting typically drop out of college.

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