Student loan defaults have become such a concern that one community college is now requiring students to complete personal budget worksheets in order to receive loans. Tidewater Community College, based in Norfolk, Va., wants students to outline a realistic picture of their financial situation before and after graduation, including a repayment plan for student loans, according to Inside Higher Ed.
Making students accountable
The move goes beyond requirements set forth by the U.S. Department of Education for receiving federal loans. The school hopes making students more accountable will help them make more responsible decisions about borrowing money for education expenses. Deborah DiCroce, president of Tidewater Community College, told Inside Higher Ed that student loans are “not a handout.” She went on to say:
It’s not something that goes away when the college experience is completed or not completed. There’s a commitment to repay a loan that has as much weight to it as any other kind of borrowing one might do. My concern, as we are ramping up our financial aid program, is keeping a close eye on our default rates, as one of our measures of accountability. It just became clear that we needed to take a step beyond what the feds require. Where is our responsibility to educate a borrower on this type of investment?
Looking for debt solutions
Many students need debt help because of high student loan balances they can’t pay back. Not only are many recent graduates having a tough time finding jobs that allow them to afford student loan payments, but they are also carrying high levels of credit card debt.
Tidewater Community College has the right idea with having students put together a financial plan that involves paying back any money borrowed. More students need to be educated about the consequences of taking on student loan debt and combining it with high-interest credit card debt, auto loans, etc.
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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.