When you sign a contract for a lease or purchase of a property do you typically read the entire contract including all the language in the contract? What about when you apply for a credit card? It’s sad to say but I have been guilty of skimming over the language in contracts as well.
A new study, the 2017 State of Student Loan Debt in America, which polled current college students and their parents found that more than half of students only read 25% of their student loan documents. The study was conducted by a partnership of Thrivent Student Loan Resources and Wakefield Research. More than two-thirds of students think it’s their responsibility to pay for all or most of their college education, but many of them are overwhelmed or too afraid to ask for help, according to the survey.
Greater than half of first-time college students surveyed said they don’t know or haven’t established how much they need to borrow in student loans to pay for college. Some students go their entire college careers never knowing to how much debt they have accumulated, according to Adam Carroll, a financial literacy expert and author who helped interpret the survey’s results.
The survey was summarized in USA Today and here is a link to the article: https://www.usatoday.com/story/money/personalfinance/2017/10/05/not-doing-when-you-apply-student-loans-could-cost-you/728733001/
Here are some tips that were offered to help navigate the student aid process:
1.Look for support. Seek out financial aid officers, school counselors and other professionals who are trained in understanding the process. It is also recommended to have someone double-check the FAFSA form for mistakes before it is sent.
2. Communicate. Thrivent’s report found that 70% of students wish their families were talking to them more often regarding a plan to pay for college. “The ability for parents and kids to talk about the cost of college early and often is critical so that everyone knows who’s chipping in, how much and the overall cost,” Carroll said.
3. Have a plan. Students who have a financial plan in place from the start end up borrowing less. It’s important to determine not only how much each student will borrow but how they will pay back the funds.