Think Before You Borrow
“Borrow only what you need.” That advice is repeated several times during the Student Loan Entrance Counseling session sponsored by the WCC Financial Aid office. To apply for and receive federal student loans through the College, all new applicants must attend a session.
“We want students to have a clear picture of what happens when they go into repayment—many don’t realize how quickly interest on their loans can accrue,” said Carrie McCrory, Financial Aid coordinator. “We encourage students to create a personal budget and to figure out how much they can afford to borrow before applying for the maximum amount.”
One of the details given during the session is what a monthly payment is likely to be when students finish school. An example: A student who borrows $21,000 to pay for tuition and books and later makes $40,000 annually will have to pay $258 per month for 10 years to repay the loan. That reality opens up a lot of eyes.
Experience Provides Some Tough Lessons
“I wish I’d had this kind of information 20 years ago,” said Fred Culpepper, who relocated to Ann Arbor from Chicago. An experienced professional in the Windy City’s financial district, Culpepper’s employer folded when stocks took a nosedive and left him without a job and a family to support.
“My wife has a job up here now and I’m going back to school to study what I really want to do, graphic design,” said Culpepper. “I still have a balance on my student loan from 20 years ago that I’ve been paying on all this time. In fact, it’s the reason why I dragged my feet about going back to school. I wish I’d had something like this when I was applying for my first student loan.”
The information session also helps students understand the difference between subsidized and unsubsidized loans, as well as the consequences of defaulting on their financial obligations.
“We also walk them through their responsibilities, such as notifying us and their lender when their enrollment status changes,” said McCrory. “To maintain eligibility at WCC, they must achieve satisfactory academic progress. They have to successfully complete 75 percent of the credits they attempt each semester, maintain a GPA of 2.0 for the semester and a cumulative GPA of 2.0 while at WCC.”
Be Sure to Check Your Email
Culpepper learned that checking his WCC student email account was also important to the process. “The first letter I received came through the regular mail. I didn’t realize until now that I needed to check my email, too,” said Culpepper. “I sat at home waiting for another letter to come and it didn’t. Now I know why.” According to McCrory, email is the primary means of notifying students about their loan and Pell Grant awards.
WCC students received almost $21 million in student loans during the 2008-2009 academic year. Another $11,377,322 was awarded in Pell Grants and $2,286,953 was given in scholarships, according to the WCC Financial Aid office.
It’s been a year since the loan counseling sessions began, so it’s too soon to tell how much of an impact they’ve had on student borrowers. The big test will come in a few years when students start paying back their loans.
The sessions are free and offered several times a week throughout the year. For more information, contact the WCC Financial Aid office.