2008 Woodie Awards
Debt, just a part of the experience
Part three of a series on rising tuition costs
Kristin Berg
Issue date: 2/8/06 Section: News
With the beginning of every semester, comes a little e-mail sent to each Southwest Minnesota State University student, and attached to it is a price tag. Whether students receive financial aid, scholarships or grants to help pay for the cost of tuition and room and board varies greatly, but for students lacking in these funds, student loans are often the only alternative.
"About 85 percent of students [at SMSU] have some kind of loan," said David Vikander, director of financial aid.
About 90 percent of SMSU students have some form of financial aid that could include loans, scholarships, grants or work study Vikander said.
The average Stafford loan debt after 4-5 years that does not include other kinds of loans at SMSU is about $18,000 Vikander said.
With loans coming directly from the federal or state government, eligibility is determined from the Free Application for Federal Student Aid. After determining eligibility, such a loan is guaranteed to the student, said Vikander.
Alternative loans differ because they are obtained through a bank, credit union or private lender. Students who do not receive enough financial aid in other areas can apply for an alternative loan, but interest rates and origination fees are often higher, and a co-signer is usually necessary, Vikander said.
"It seems like I'm paying the interest and nothing else," said Stephanie Ellis, a former criminal justice student at Brown College in Brooklyn Center, Minn. and current personal care aide with Prairie River in Marshall, who has a Sallie Mae loan.
In the last ten years, alternative loan amounts have increased by 930 percent, Vikander said. The amount of federal loans available to students hasn't increased enough to defray the cost of tuition.
On a positive note for students in need of more money, Stafford loan limits will be increased in January 2007, Vikander said. Currently, a freshman eligible for a Stafford loan gets a set $2,625 a year, while sophomores receive $3,500 and a student of junior or higher class get $5,500. In January 2007 the Stafford loan amount will increase to $3,500, a year for eligible incoming freshmen and $4500 for sophomores. Students with junior status or above will still receive a yearly Stafford loan of $5500.
"About 85 percent of students [at SMSU] have some kind of loan," said David Vikander, director of financial aid.
About 90 percent of SMSU students have some form of financial aid that could include loans, scholarships, grants or work study Vikander said.
The average Stafford loan debt after 4-5 years that does not include other kinds of loans at SMSU is about $18,000 Vikander said.
With loans coming directly from the federal or state government, eligibility is determined from the Free Application for Federal Student Aid. After determining eligibility, such a loan is guaranteed to the student, said Vikander.
Alternative loans differ because they are obtained through a bank, credit union or private lender. Students who do not receive enough financial aid in other areas can apply for an alternative loan, but interest rates and origination fees are often higher, and a co-signer is usually necessary, Vikander said.
"It seems like I'm paying the interest and nothing else," said Stephanie Ellis, a former criminal justice student at Brown College in Brooklyn Center, Minn. and current personal care aide with Prairie River in Marshall, who has a Sallie Mae loan.
In the last ten years, alternative loan amounts have increased by 930 percent, Vikander said. The amount of federal loans available to students hasn't increased enough to defray the cost of tuition.
On a positive note for students in need of more money, Stafford loan limits will be increased in January 2007, Vikander said. Currently, a freshman eligible for a Stafford loan gets a set $2,625 a year, while sophomores receive $3,500 and a student of junior or higher class get $5,500. In January 2007 the Stafford loan amount will increase to $3,500, a year for eligible incoming freshmen and $4500 for sophomores. Students with junior status or above will still receive a yearly Stafford loan of $5500.