Smart Strategies Make Student Debt Manageable

| March 7, 2012

Higher education reporter Liz Barry’s front-page feature in Sunday’s News & Advance sheds light on a topic that’s foremost in the minds of many college students: How to get a degree without drowning in debt.

The story, “Rising student loan debt fuels concern among Lynchburg-area colleges,” examines how local colleges, including Sweet Briar, are helping students cope with the cost of higher education.

While it’s well documented that those with a college education fare better economically in the long run than those without, it’s also true that rising tuitions mean most students will have to borrow money at some point in their college careers. Many of them will enter the workforce owing tens of thousands of dollars.

But as Bobbi Carpenter, Sweet Briar’s director of financial aid, points out, the kind of loans students take out can make the difference between managing the payments and defaulting.

Before a student goes to a lender, she and associate financial aid director Wanda Spradley “counsel, counsel, counsel” her on how to keep the burden to a minimum, Carpenter says. They discuss loans after exhausting scholarships, grants and other sources of funding. Carpenter also notes that nearly 28 percent of Sweet Briar students are eligible for a Pell Grant this year.

“We recommend all the federal loans first. If a parent has bad credit and wants their daughter to take a private loan, we recommend [the parent apply for the loan] and have it denied so that we can come back with additional [government] unsubsidized loans in the student’s name. Also, we have some institutional loan money we use to help in these types of situations.”

The College actively discourages students from using private lenders if they can avoid it.

“Interest rates on alternative loans are as high as 12 percent or more,” Carpenter says. “These lenders are unwilling to work with borrowers, where the feds have all types of repayment options.”

That helps keep default rates among Sweet Briar graduates to less than 1 percent in recent years, the lowest among peer colleges in the Lynchburg area, according to federal statistics cited by the News & Advance. Carpenter and Spradley’s hard work also led to lower-than-average debt for the graduating class of 2010. The College reported an average burden of $22,500 for that class year.

According to the paper, the figure places Sweet Briar $2,750 below the national average, $827 below the state average, and $4,910 below the next highest average debt among 2010 graduates from a Lynchburg-area private college. The highest debt burden among local private schools was $32,000.

Carpenter said a former student emailed her after she saw the article in paper.

“She took our advice at Sweet Briar and graduated owing less than seventeen thousand dollars,” Carpenter says. “[Then] she went to grad school and is now paying over nine hundred dollars a month on a private loan. She is struggling to make it.”

 

Contact: Jennifer McManamay

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