« WSAU Opinion Blog

OPINION - Student loans

by Chris Conley

NEWS BLOG (WSAU) A note to 2013 college graduates: when you take out a loan, you’re expected to pay it back.

If you took out a variable interest rate loan, the costs of borrowing the money may go up.

If you take 5, 6, or 7 years to earn your degree – you’re going to borrow much, much more money than someone who is on the normal 4-year college plan.

If you major in women’s studies, ethnic studies, poetry, philosophy, etc… it will be harder for you to get a job where you’ll earn enough to comfortably pay the money back.

The interest rates on student loans may double later this month to between 6% and 7%. On the typical loan, a student will pay $9 more each month.

Those who are complaining should be asked the questions: did you read and understand the loan’s terms? For what other loans to you expect the terms to be changed when it comes time to pay? Car loans? Mortgages? You already have a sweetheart deal that repayment doesn’t start until you have a job, and the payment amounts vary based on your income. Why do you expect the government to intervene? Shouldn’t your first step be to refinance with the lender?

As you’ve probably guessed, I’m not a fan of the various student loan changes that are being proposed. Those include lowering the interest rates to the Federal Funds Rate; less than 1%, or forgiving student loans that aren’t repaid within 10 years of graduation. If the money to go to college becomes cheaper, past experience tells us schools will feel free to raise tuition.

Money for college should have a cost attached to it. It should be high enough that people who aren’t college-ready will think twice about taking it. Does this shut out people from a college education? No. It will limit college choices for some, and that’s not necessarily bad. Not everyone is entitled to an exclusive private school education. It will make would-be students think twice about changing their major. It will make them consider how marketable their degree is post-graduation. All of these are good things to ponder.

What will you use the money for? How will you pay it back? In any borrowing situation, if you don’t have good answers to those questions – don’t take the money.

Chris Conley