Debt. It’s something nobody likes to talk about. Regardless, it’s not an issue to which we can simply turn our backs.
Beth Armstrong, the Director of University Scholarships and Financial Aid at Virginia Tech, believes that in order to beat student debt, the first step is making sure students truly understand what they are dealing with. I spoke with her about how she thinks we can work to stop this growing problem.
“Our greatest challenge is being able to get students and families to really “understand” what having a loan means, and it is a topic about which my staff and I are constantly brainstorming” said Armstrong.
According to Armstrong, at Virginia Tech, 37.5 percent of students rely on some sort of financial aid and 51.4 percent have a student loan. While this is an issue that many students deal with, few confront the it with an assertive and up front approach. Failing to get ahead of one’s student loans can lead to serious consequences, like defaulting on their debt.
While student loan management is something that our higher education system has been trying to cope with for many years, we have yet to see a system implemented that readily deals with solving the issue or adequately educating its students.
Short, sweet and to the point
Armstrong believes that the way to approach this isn’t necessarily providing students with mass amounts of information, but rather to use the information already available to ensure that the students, and their families, understand what it all means.
At Virginia Tech, Armstrong and her staff try to make the information surrounding loans as clear as possible. “We are up-front about the reality of loans and debt in all of our presentations,” said Armstrong, “and I am very proud to say that Virginia Tech, as an institution, is completely supportive of University Scholarships and Financial Aid in this endeavor.”
She doesn’t believe students should have this information sugarcoated or made more palatable; the topic should be covered in a manner that’s clear cut and dry. The Office of University Scholarships and Financial Aid also personalizes their information sessions that they hold for students. With an RSVP to a financial aid information sessions, your loan and financial situation will be presented to you at the session.
“It’s held every spring and students get emailed about it from the Office of University Scholarships and Financial Aid,” said Armstrong. “My office will cover the types of loans a student may have; what it means to have a federal student loan servicer and why they are important; the various loan repayment plans; and, how to use the loan repayment calculator. And, if students want to come into the office to discuss a specific situation, we are more than happy to do that.”
Making the information clear and personal allows students to understand the reality of their student loans. This is a strategy that has worked for the office of financial aid, as according to Armstrong, about 80 percent of Virginia Tech students pay back their principle loan rate. Only about 1 percent default on their loans. Both these numbers are far above the national average.
At the end of the day, tackling your student loans ultimately comes down to simply paying them back. But that’s not always easy. Armstrong has a number of great tips to help students be smart about their tuition loans and ensure that they pay them back.
Do it yourself
The first tip starts before you even get loan.
How much money do you need to borrow? Where is that money coming from? These are the basic, first-step questions that students often overlook when they are considering student loans. Knowing how much you need and from whom this money is coming from is very important.
Once you get the student loans, you should know your rights as a borrower. This might be one of the most important parts of student loans. If you cannot repay you loan what happens? When you know your rights as a borrower and you get put in a difficult financial situation, you will be able to maneuver the situation with all options on the table.
Lastly, Armstrong says,know how much your federal loan is. You can find this information on the National Student Loan Data System website. This is where students can go to check what institution their federal loans are coming from and how much they are borrowing.
Beth Armstrong is a great resource to have and Virginia Tech students are in good hands when it comes to their educational finances. The proper measures and resources are in place at Virginia Tech for students to educate themselves about their student loans, but ultimately it’s up to the student taking out the loans to be proactive and responsible with borrowing money.
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