Though increasingly needed for many careers, a college education is a big investment in time and money. The price to Wisconsin residents for tuition at the University of Wisconsin-Madison will total $10,424 in the 2014 - 2015 academic year beginning this fall. Add in room and board ($8,600 in a campus residence hall), books, supplies, and travel, and many students will be paying well over $20,000. The cost is somewhat less at other public universities and more at some private colleges. Tuition alone at Lawrence University, located in Appleton, WI, totaled more than $40,000 this semester.
How to pay? Some students receive academic or athletic scholarships. Some receive federal grants. Many parents help through the Wisconsin College Savings Program, which enables them to save tax-free dollars to pay for future post-secondary education costs. And many students take on summer jobs to help with college expenses. But often, these efforts fall short of covering four years of higher education.
Student loans can fill the gap. Two thirds of undergraduate students relied on loans to pay for their education in 2010, according to the Consumer Financial Protection Bureau (CFPB).
While student loans can be a wonderful investment-enabling students to prepare for careers in healthcare, technology, and business-they also present risks. If the graduate is unable to land a good job or trains for a low-paying profession, repaying student loans can be a challenge. Even if a graduate avoids default, paying off the loans can take years. Paying off these debts can delay home ownership and impact other decisions, such as which job to accept or when to begin a family.
Help is available. The CFPB provides guidance about many student loan issues on its website: http://www.consumerfinance.gov/paying-for-college/. For students and prospective students who have not yet signed on the dotted line, there is guidance about selecting a federal or private loan. There's also help with comparing financial aid offers, creating a budget, and establishing a banking relationship.
For those faced with paying back their loans, the CFPB provides advice for graduates in all situations through an online questionnaire. The questionnaire responds to concerns of graduates with either federal or private loans, or both, with specific information for each circumstance.
If a graduate is worried about being able to make full, regular payments, has missed a payment, or has missed several payments, the CFPB offers steps to take. Federal student loans, for instance, offer income-based repayment schedules, deferment, and forbearance options. The CFPB also offers advice on getting out of default, negotiation, and borrower rights and responsibilities.
On its website the Wisconsin Department of Financial Institutions refers people seeking information on student loans to the CFPB. In addition the agency provides a wealth of general information about credit, borrowing and debt repayment here.