Financial aid office provides guidance for students paying off loans

If a person had $20,000 to spend, they could buy about 5,000 Javalanches, a Mini Cooper or feed 220 children in Africa for a year.  If that person is a Northwest student, though, he or she would probably use it to pay off his or her loans.  The average student debt of a Northwest graduate is between $19,825 and $22,555.  The time to begin paying off loans is quickly approaching for seniors getting ready to graduate this spring.  
 “Our students have done a great job over the years (paying off loans),” Del Morley, director of financial assistance at Northwest, said.  “The government keeps track of what they call a cohort default rate (percentage of students who default on federal loans) and our cohort default rate is always under the federal average.”
About 70 percent of Northwest students, each year, take out loans.  Subsidized loans are need based and interest begins six months after graduation.  Interest on unsubsidized loans begins immediately and payments must begin six months after a student is no longer enrolled in school.  The Northwest Office of Financial Assistance provides students in need of loans with entrance and exit counseling and gives them tools to help with loan consolidations and payment plans. 
 “There are a lot of changes in the works coming up,” Morley said.  “We’re going to try to get them all made before July 1, 2012.”
With any loans made after July 1, interest will begin to accumulate on subsidized loans as soon as a student graduates, and subsidized loans will no longer be available for graduate students.  There is also a possibility that interest rates on student loans will increase.
“Unless (Congress) passes new legislation, it will be 6.8 percent next year,” Morley said.
Kearsten Smith, a senior who has taken out loans since her freshman year, said she is confident that her education at Northwest will help her find a job that will help to pay off her loans.  If that fails, her next plan is to find someone very rich to marry. 
“If you don’t have to take (loans) out, don’t, but at the same time, student loans are the best loans you can take out,” Smith said.  “If you’re going to go to college, don’t be deterred because you have to take out loans to do it because they have the lowest interest rates (and) the best payback policy. Literally, they are the best loans you could ever take out.”
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