financial office

If you’re feeling as though you are being financially squeezed every time you pay your tuition bill, it’s probably because you are.

According to the Economist, the cost of college tuition in the United States has grown by over 900 percent since 1978, 650 points above inflation. The result: increased financial need. In Fall 2011, 77 percent of full-time UTSA freshmen applied for need-based aid, or financial aid. The question is whether burying yourself in debt is worth the degree you’re pursuing.

According to the UTSA Financial Aid website, “The primary purpose of financial aid is to provide resources to students who would otherwise be unable to pursue a post-secondary education.” But what is that education worth?

 John Fabian Gomez Ramos, a 2009 graduate from Stephen F. Austin State University, feels as though taking out college loans was worth the investment.

“College was great, and Kappa Alpha Order made it worth it,” Ramos said.

“I have a degree and I have a job, and I knew what I was getting myself into when I took out the loans.”

Gomez earned his degree in business management and now works as a loan officer. He feels that the problem with the student loan situation is that “a lot of people who take out the loans don’t graduate,” and they’re stuck in debt without a degree.

Another recent graduate, Ankit Patel, 24, took out student loans to get his degree in mechanical engineering from Texas Tech University in 2009. He has already paid off the $20,000 in loans.

“It takes time, but if you can live cheap, you can get it done,” he says. His secret for paying off his loans so quickly was to live at home because he was able to pay it off 22 months after graduation.

Patel now makes $58,000 per year and has been able to save the majority of his salary because he no longer has to worry about his student loan debt.

Brandon Wisniske, also a graduate from Stephen F. Austin State University, says, “I will continue to have to defer my loans until I can find a job. I’m having a hard time, and the more I defer, the more interest I have to pay.” The 2010 graduate has yet to find a steady job. He earned a degree in business management and currently resides in Houston, Texas.

Americans have accumulated well over $900 billion in student loan debt, yet the weak economy does not offer the resources to provide high paying jobs to students trapped in the debt cycle.

Mark Kantrowitz, a student financial aid expert, explained on National Public Radio, “It’s smart if it’s enabling you to invest in your future, but if you borrow more than your expected starting salary after you graduate, you’re going to struggle to pay your loans.” He also explained that certain degrees are more valuable than others, like ones in the fields of science or engineering as compared to ones in the liberal arts college.

Kantrowitz believes that students need to be smart about the debt that they incur while obtaining their degree.

“Look for scholarships and grants first and foremost before turning to loans as your main source of educational finance,” Kantrowitz advises.

Scholarships are another form of financial assistance that can be used to satisfy college expenses. For example, Fastweb.com has thousands of potential scholarship opportunities available to students, and the site will categorize applicants based on the types of scholarships for which they qualify. Scholarships range from $100-$10,000.

Grants are a lot like loans, except you don’t have to pay them back. Many are need-based, but filling out a FAFSA can tell you more about whether or not you qualify for financial assistance.

Instead of burying yourself in debt that you won’t be able to pay back, take the time to evaluate all of your options. Exhaust your potential grants and scholarships first, and then look into student loans to pay the rest of your expenses. The less debt you’re in when you graduate, the lower your monthly payments will be and the more you can focus on expenses like housing, transportation and possibly starting a family or business.  

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