Study: More Michigan college graduates defaulting on student loans

FLINT (WJRT) (9/29/2017) - Paying off student loans is a struggle for many college graduates.

Lori Vedder is the financial aid director for University of Michigan Flint.

A new study shows more graduates in Michigan are defaulting because they can't keep up with the payments.

"That bill comes and they don't expect it," said Lori Vedder, the financial aid director at University of Michigan Flint. "They get into this debt that sometimes is just overshadowing to them when it comes time to graduate."

Data from the U.S. Department of Education shows 12.9 percent of Michigan college loan borrowers are in default.

"It's terrifying," said University of Michigan Flint student Jaymes Vandaele. "The payments can be anywhere between $300 and $900 depending on the term and the credit. A lot of people fear it as a set up to fail."

College financial aid advisers say the best thing for students to do is plan early while they're still in school. After graduation, if default appears likely, borrowers are encouraged to talk with student loan lenders and servicers ahead of time.

"They're not going to be upset. They're going to work with the student and they're going to help them do what's best for them," Vedder said. "Whether it's changing the repayment option or plan, changing the payment due date. Maybe in two weeks you can make your payment, but you cant this week. All of those options are available, but borrowers need to have those conversations with their servicers."

Borrowers need to understand that defaulting on a student loan can lead to very adverse effects on their credit scores.

"There is very little mercy for students," VanDaele said. "Having that much debt on your credit history also impacts how likely you are to get a loan or your first home."

Despite student loans being very intimidating, many students say they would never be able to attend college without them. Registration for FAFSA for the next academic year begins Sunday.



 
Comments are posted from viewers like you and do not always reflect the views of this station. powered by Disqus