Managing Student Debt

The Osher Adult Re-Entry Center held a seminar on Nov. 8 about Managing Student Debt. It was hosted by Raul Valdovinos, a CSUSB Student Personnel Technician with the office of Financial Aid & Scholarships.

Raul Valdovinos was interviewed about tips and techniques for managing student debt, budgeting financial aid, and future financial planning techniques.

Q: How can you prevent a student loan turning into a student debt?

You can try and get a part-time job because sometimes it’s hard to do it full time, so get a part-time job at least. You can contact your loan servicer and make payments while you’re in school. If you get 100 dollars for your birthday and you know you have a loan already, send that to your loan servicer. If you put that off it just creates more interest and all of that interest adds up. We try and encourage students to pay while they’re in school if they can.  Whenever they get like a tax refund, birthday money, or Christmas money, making small payments over a long period of time really makes a difference.

Q: What is the average time to pay off a student loan and how often you pay it?

The standard for payment is 10 years; you can obviously do it sooner if you want. Taking into account not all majors are created equal, some people get paid really well once they get out of college and some people don’t, that’s just the reality. It’s on a monthly basis, obviously, your payment might be a 100 dollars and your friend’s payment might be 200 dollars. It just might be because your friend took out more loans and how many loans you have outstanding. 10 years is the repayment period that they offer you, and there are special programs with like federal loans.  Let’s say you don’t get a job right away, you’re unemployed once you’ve graduated for a couple of months or you’re not making nearly as much as you thought you would as far as salary is concerned. They do have programs where they work based on your income, I think communication is the most important component because if you don’t communicate with your lender and they’re billing you and you don’t submit those payments, you’re going to fall into default, eventually. They are going to report that to the credit reporting agencies.

Q: How will my student debt affect my credit?

I know that if make a late payment you’ll probably get hit with a late fee, but anything over 30 days late, is going to get reported to the credit agencies. It will lower your fico score, which is the score that is used to calculate what interest rate they’re going to give, so the better your credit score, the lower the interest rate you’ll pay and the more money you save. If you have low enough fico score you’re going to get higher interest rates on your credit cards and you’re going to get a higher interest rate when you try to buy a house or when you try to finance a car. All that stuff gets reported and if it gets really bad, the last thing they could do is take it out of your paycheck.

Q: Anything else you want to add? Any more tips?

Off the top of my head is housing. I would encourage people to live with a roommate or live with their parents if they live nearby and it’s possible. Putting a little bit of effort into learning how to cook, if you don’t know how; making your own meals saves so much money. I don’t see the reason for buying new textbooks.