Every year tens of thousands of students take out millions of dollars in student loans in order to pay for college. Unfortunately, most of us students don’t know nearly enough about our student loans and how they can affect our lives. Some of us know more than others and that’s great, but sadly, most of us aren’t even aware that six months after we graduate, we are responsible for paying this money back. Further, an overwhelming number of us don’t even know how much we owe or who we need to send money to. It’s almost like we have the mentality our student loan debt will take care of itself. That approach is a guaranteed way to screw yourself in ways you haven’t even thought about.
Personally I thought I knew all I needed to about student loans; private versus federal loans, interest rates, subsidized and unsubsidized loans, who my lenders are, and when I have to start paying my loans back. What I’ve come to realize is although I do know significantly more than most student borrowers, I don’t know nearly enough. Seemingly none of us do.
Going to college is a completely different experience for the millennial generation than it was for our parents. In many aspects, going to college is a lot easier now than it ever was before. Online classes and lecture recordings save us from leaving our bed when walking all the way to campus seems impossible. We connect with our professors on LinkedIn and expect email responses from them within an hour of asking a question. We have online file sharing to make group projects something you can do on the couch in your underwear! However, many trade-offs of convenience also make college significantly more difficult than ever before. Technology doesn’t make all aspects of college a cakewalk, and generations who went through college without it don’t seem to realize this. Online file sharing mean that assignments due at midnight are late at 12:00:01AM; you can’t slip a paper under your Professor’s door at 4am and it still be on-time! Access codes for homework cost hundreds of dollars every semester and you can’t resell them like printed textbooks. Perhaps most alarming – you can borrow tens of thousands of dollars in debt with a few clicks of the mouse!
The ease of taking on debt without ever really understanding what you’re actually doing is alarming. In just a short time students can become responsible for for thousands of dollars of debt. Worse yet is overwhelming amounts of students parents fill these applications out for them. This makes the whole situation feel less intense and like less of a responsibility. The fault doesn’t fall entirely on the student, it’s a systematic failure. Financial aid nights for prospective students and their families are just a few hours long once or twice a year. On college tours, accepted student days, and orientations a financial aid presentation is made at the very end and oftentimes overlooked because students are so overwhelmed by all of the other information they are taking in.
When our parents took out loans for school (if they did considering how much more affordable college was then), they actually went to a bank and got paperwork. They finished this paperwork by physically signing it; this must have made it feel more real than just typing your name in for an E-signature. Filling these applications out online feels no different than signing up for Netflix or Spotify. It doesn’t feel like a huge life changing decision, and students aren’t as compelled to read all of the documentation associated with it. To us, it’s no different than skipping over terms and conditions for anything else online.
Sometimes the most difficult aspects to understand about our loans and financial situation can easily be explained to us, but we are too afraid to ask. As students, we feel the pressure to always know what’s going on and what we’re doing. However, we don’t. Students are so scared to ask about their loans because it always leads to you getting “the look”. The “you have thousands of dollars in debt and you don’t understand it, are you stupid?” look. People also assume that because Google was invented, we no longer need anything explained to us. It’s almost as if they forget we still need to actually take time to look something up, read through it thoroughly, and after all that we still may have further questions we need answered and explained to us.
As students, it’s our time to take back our financial futures! It’s time for us to realize our financial responsibilities, the effects it will have on our lives, and most importantly, how we can mange these responsibilities! If we can get a firm grasp on understanding our financial responsibilities while still in school, our goals and dreams in post grad life can become a reality significantly sooner. As students, we don’t have control over tuition prices, interest rates, or scholarship policies, but if we can actually learn about our debt (instead of just ignoring it and hoping it goes away), we can really begin to control our financial future.