Survey Reveals Varied Perspectives Regarding Student Loan Debt
Consumer Credit Counseling Service of Buffalo (CCCS) announced today that The National Foundation for Credit Counseling® (NFCC) Financial Literacy Survey revealed that U.S. adults have a varied range of opinions and experiences when it comes to how they view student loan debt.By a two-to-one margin, borrowers were more likely to say that their student loan was a good investment than a bad investment. At the same time, however, more U.S. adults would not recommend student loans as a way to finance a college education compared to those who would recommend doing so. Some felt that if they had realized the amount of student loan debt that they would accumulate, they never would have taken out the loan(s).
Many adults say that they would have benefitted from financial counseling on both ends of the loan - before taking out their loan, as well as after – for many admitted that it is difficult to find the right student loan repayment program for their situation.
A little over two years ago, CCCS initiated the region’s first student loan counseling program in response to the growing need for education and assistance with student loans. The Student Loan Counseling Program is a service designed to assist individuals with student loans. To date, 208 people have received help from this program. Unfortunately, we know that this is just the tip of the iceberg.Also noted in the survey was that others expressed interest in obtaining a graduate degree, but felt they could not afford it. Some predicted that they would probably still be paying for their own student loan when their children begin college.
“It is disconcerting that graduates cross the stage with a diploma in one hand and student loan debt in the other,” said Paul C. Atkinson, President & CEO of CCCS Buffalo. “Young professionals face a tepid job market, which could make repayment even more difficult. However, our certified financial counselors stand ready to help borrowers find programs that are appropriate for their budget and unique situation.”Even if a person secures a good-paying job, an average student loan debt of close to $30,000 can start graduates off in a financial hole, especially as interest continues to accumulate on their loan. While the federal government offers a number of income-based repayment plans for borrowers of all income levels, sorting through them to find the right plan can be challenging. CCCS certified financial professionals can help graduates identify optimal repayment plans that can minimize the amount of interest paid over the life of the loan, while maintaining an affordable monthly payment.
Because student loans are reported to the credit bureau, depending on how they’re handled, they can either wreck a person’s credit history or help build a positive one. When student loan activity is reported, it is treated as an installment loan, thus paying a student loan on-time or paying it late will be treated like other installment debts such as car payments. Since payment history is a highly weighted element of the credit scoring model, ignoring student loan payments can have a long-term negative impact on a person’s credit report and subsequent score, thus potentially hindering future borrowing power.
Atkinson noted that some employers will pull credit reports as part of the hiring process, thus a poor report could count against the applicant. To counter this, those who have already fallen behind with their student loan payments should be prepared to present a solid plan of action that identifies the steps that will be taken to improve their credit situation moving forward.Graduates, even those who remain unemployed, are advised to make repayment arrangements before their grace period or deferment expires. By doing so, they will not risk the negative consequences associated with missed payments. For help understanding the options available and determining the most suitable repayment program, schedule an appointment with our certified professionals. Call 712-2060 for more information.
Many people will find relief through student loan counseling programs. In our program, Certified Financial Counselors:
- Evaluate student loan debt (current or in default)
- Explore options for student loans including deferments, forbearances, alternative repayment plans, and consolidation loans
- Assist in applying for the appropriate option
- Assist in communicating with the lender, as needed
- Review credit score, credit report and living expenses