After the last college class ends, and after the steps to the podium at the Georgia Dome are mounted, a professional career awaits graduating Panthers.
But for many students, graduation signals bills—2012 and 2013 Georgia State graduates faced an averaged of $24,945 of debt, according to university Financial Aid Director Louis Scott.
This number is lower than the 2012 national student debt average calculated at $29,400 by The Project on Student Debt, a non profit organization focused on research and policy work.
The Project on Student Debt’s research states 59 percent of students within Georgia graduated with loan debt in 2012. Georgia State graduates still left school with more debt than the state average of $23,089 per student that year.
A possible solution
President Barack Obama directed the Secretary of Education to propose regulations that would put a cap on student federal loan payments in June. Nearly 5 million student borrowers would not pay more than 10 percent of their income for each payment, according to a White House press release.
The bill introduced in May by Massachusetts Sen. Elizabeth Warren will be voted on in Senate on Sept. 17, according to The Atlanta Journal-Constitution.
“This week, [Congress has] a chance to help millions of young people,” President Obama said in June. “I hope they do… And in the meantime, I’m going to take these actions today on behalf of all these young people here, and every striving young American who shares my belief that this is a place where you can still make it if you try.”
The memorandum states if Congress approves the bill it would go into effect on Dec. 31, 2015.
“It would be scandalous if we allowed those kinds of tax loopholes for the very, very fortunate to survive while students are having trouble just getting started in their lives,” President Obama said in his remarks after signing the memorandum on June 10 in the release.
The current program only applies to students who took out loans after October 2007-2011. This new version will also benefit students who borrowed before 2007, according to the memorandum.
President Obama also said the government will renegotiate contracts with private companies.
“And we’re going to make it clear that these companies are in the business of helping students, not just collecting payments, and they owe young people the customer service, and support, and financial flexibility that they deserve,” he said.
The government is doing more to help borrowers to know all their options before deciding on one, according to President Obama.
Comments from Georgia State Students and Staff
Ricky Sellers, an education major, and Nergis Guclu, a mathematics major, share one thing in common: Without receiving scholarships, both sought student loans.
“I applied three times and couldn’t get it,” Guclu said.
Both would like the opportunity to refinance them but Sellers said he still doesn’t know how he will manage payments after graduation.
“Well, since I’m still in school I haven’t thought about paying them,” he said.
Students like Sellers and Guclu first need to understand what the government’s plan entails, according to Scott.
“There are some things that people who opt for ‘Pay As You Earn’ must understand before they jump in. First, if your income later rises, you may have to pay significantly higher payments,” he said. “Most students who can afford to pay off their loans in the 10-year standard repayment option likely won’t qualify for the Pay As You Earn plan anyway.”
Scott also said debts will be forgiven after some time.
“Remaining debt for many of these borrowers also would be forgiven after 20 years for private sector workers and 10 years for government workers and employees of some nonprofit organizations,” he said.
Scott said there are three things students should take into account before getting a student loan:
- Borrow subsidized loans: You won’t pay interest while studying and for the first six months after leaving school.
- About interest, Scott advises: “If you borrow an unsubsidized loan, consider making student loan interest payments during your grace period to save money on the total cost of your loan.”
- Know your repayment and benefits options.
How can Georgia State help:
- The Student Financial Services office has a section of its website dedicated to explaining loans. Visit http://ow.ly/BrkLG for definitions and outside resources.
- Georgia State will get in contact with you at key decision points to guide you to the best option for your case.
- Georgia State focuses on keeping you on track to graduate. Scott said the university “dedicate[s] staff to student retention activities, in an effort to boost student and school success and reduce default rates.”
