MOLLY CARROLL
Staff Writer
Welcome to small classes led by accomplished professors, welcome to new friendships, welcome to this hamlet of celebrities and sunny beaches we call Malibu. But unfortunately, carefree college life is overshadowed by accumulating loans that transform by the end of four years into unmanageable and looming debt. And for these bronzed and brilliant Pepperdine students, this debt will remain long after their Malibu tan fades.
For many freshmen, the implications of student loans are a foreign concept. Many companies advertise low interest rates and options of deferring payments until after graduation. The average student borrower now graduates nearly $30,000 in debt with this number on the rise every year, according to the Department of Education.
Even with low interest rates, $30,000 is not an easy sum to come by, and remember this is only an average. Many students incur balances much less and much greater for the sake of a reputable degree. And Pepperdine students are no exception.
But the debt doesn’t stop there. According to “Burying College Grads in Debt,” a Nov. 28 article published in Wiretap Magazine, “Over 70 percent of undergraduates use credit cards to buy school supplies, food and textbooks and 24 percent use their credit cards for tuition.”
Credit card companies are increasingly being considered an alternative to the high interest rates of many loan companies. But many students don’t realize the dangers of credit card debt either. A single late payment on a credit card can increase the percentage rate from a low of nine percent to a high of 30 percent or more. Students’ average credit card debt is more than $4,000, according to “Burying College Grads in Debt.” Add that number to student loans and many graduating seniors will receive a bill for over $34,000 on the day they receive their diploma, according to “Burying College Grads in Debt.”
And for those students who don’t immediately make six figure salaries, nearly 25 percent of every dollar earned is spent on paying off debts and loans.With loan payments so large, even the most accomplished newly minted graduates can find it nearly impossible to save for other important things such as a house or a family.
How can this debt problem be solved? How can this burden on students and recent graduates be relieved? Unfortunately there is no immediate solution to student loans for those who are already bound by them. But there are many options that exist to help students avoid accruing further debt.
Evading credit card debt is critical. Easy alternatives include paying cash or writing checks for all purchases to ensure that only available funds are being extracted. For online shopping and online tuition payments, there are new systems that essentially allow students to pay in cash through a direct connection to online banking.
A new program called eBillme is one of these systems. Marwan Forzley, the president of the company that provides eBillme services, recognizes the rising problem of student debt and is working to combat the issue through the development of programs including eBillme.
Forzley said eBillme is the easiest, safest way for students to make transactions in an increasingly virtual world. Because consumers are mostly shopping online, it is easiest to offer them online methods of payment.
Whether you came to Pepperdine on full scholarship, have $20,000 in loans or are financially supported by family, it is important to have the best understanding of your financial situation before it gets out of control.
09-20-2007