Students Survive on Loans

(U-WIRE) CHICO, Calif. - College students occasionally dig themselves into a hole of debt so deep they can barely see the light of day, much less lift the brick of payment pressure off their chests to catch their breath.

In a moment of despair with time running short, students look to be rescued. Loans become the easiest and quickest life jacket used to save students from the drowning debt of their college years.

"I have taken out two short-term loans since I've been in college," said Kathryn Bailey, a Chico State organizational communications major. "My sophomore year I needed a bed and my parents were really broke, so I took out my first loan. I then paid it back with my financial aid."

Students have the option to repay the $250 plus a $3 fee for the short-term loan in 90 days or take the payment out of a student's financial aid. Otherwise, their enrollment is withheld for the following year until paid. Any student can take out a short-term loan without stating a compelling reason.

"I just took out another loan for my spring break cruise because I need that extra $250 in case of an emergency," Bailey said. "I'll probably pay it back over a few months."

Bailey said she is in debt $1,500.

"When I graduate in a year my parents are going to help me out, since they haven't at all so far," Bailey said.

Nellie Mae offers students advice and direction when deciding the right path for their payments in the future.

"Unfortunately, when students are enrolled in school they concentrate on paying their tuition, but at graduation they begin to panic," Nellie Mae marketer Marie O'Malley said. "Students worry about their payment obligations. We essentially talk about what options are available for the student borrowing money. Leavin;g it up to the borrower to decide what is best."

O'Malley reassures borrowers that they can adjust their payment plans and also defer their payments.

According to the Texas Guaranteed Student Loan Corporation Web site, borrowers are faced with circumstances that will make it difficult to make payments on a loan. If a student is faced with a situation that qualifies postponement or adjustment of loan payments, they may apply for a deferment or forbearance.

It is important to be aware of every aspect of taking out a loan, and to plan for repayment regardless of graduation status. Borrowers should keep in contact with their lender if they change or leave a school, graduate, change enrollment, change an address or phone number or run into financial trouble.

"Students should remember by making a loan choice now, there will be ramifications 10 years from now," O'Malley said.