With more and more students going to college and more and more students taking out loans, students are struggling with debt management. With more students struggling with debt management, many believe that schools should take a more active role.
Students and colleges all around the country, and right here in Memphis, Tennessee are facing the difficult balance between encouraging students to go to college and the issues of student debt. As debt increases and the risk of default becomes greater, there is a call for colleges to work harder at advising students on debt, debt management and student loans.
Davidson College in North Carolina has implemented a “no loan” policy. With this policy, students and their parents are not given student loan amounts in their financial aid award packages. Students still have the option of taking out student loans, but the school is aiming to eliminate this need. Through this drastic initiative the university must raise $70 million to fund the endowment.
State University New York is implementing procedures to educate students and their parents on the different loan options and loan repayment. SUNY has been asked to advise the federal government on their borrower education program. The school is trying to educate students on their loans and all their options. They are also attempting to identify risk factors for students and keep students from defaulting.
As more students take out loans, they need to be educated about their options. Students must begin their debt plan and debt management as soon as they begin school. They must understand their economic situation and the risks for default. The school should play an active role in educating the student on debt management.
Students must prepare for debt management and must work in tandem with the college to avoid defaulting on loans.
Source: US News and World Report, “Some Colleges Help Students Avoid, Handle Debt,” Nov. 14, 2012