As college students, studies such as math, physics, and American history are drilled into our minds from the moment we enter school. College educates us on our designated major, and other general curriculum requirements that are dubbed beneficial to our future success. However, when it comes to “practical studies,” it seems like our college curriculums are lacking.
Unfortunately, we don’t learn necessary “life skills,” like writing a check, purchasing insurance, or something that greatly affects college students: taking out private loans.
With two options available to college students, federal loans versus private loans, students have difficulties differentiating the two.
While private loans attempt to intrigue students with their accessibility and readability, private loans actually tend to have higher interest rates and less protection for students; according to a recent article on California Watch, “private student loans generally are considered riskier for students because they have uncapped, variable interest rates as opposed to the fixed rates offered under federal loans.”
With tuition prices on the rise, it is important for students to look at their most feasible options. A college educating their students on federal loan alternatives is the first step towards ensuring their students make the fiscally appropriate decisions.
Certain colleges have initiated a process known as “school certification,” which allows the private lenders to go directly through the college or university, providing exact information regarding present and future costs. This program also provides the school with the opportunity to educate its students about the federal loan options available as well.
The question remains, is it important for colleges to intervene when it comes to their students’ loans? Or is it an individual responsibility that requires the student to focus closely on their finances and options to make the adequate decision for themselves?
— By Erin Cunningham