Student loans putting some in financial jeopardy

By Hope Lecchi - [email protected]

By Hope Lecchi

[email protected]

One of the goals of college is to prepare the student for life after graduation and to help the student determine their future occupation or career path.

For many younger students, it may be a way to teach them what life will be like as an “adult.”

It seems simple enough: go to classes, pass the courses and graduate. Often, students may face something in their life that prevents them from completing that task. They may fail a class, stop going to class, or even drop out.

What many of these students do not realize, especially those who receive some forms of financial aid, is that those choices can have serious consequences for the future.

“It seems a lot of students don’t understand that if they don’t pay back their student loans it can affect them for seven years if not longer,” Carla Baldwin of Credit Reporting Services Inc. in Sedalia said. “It can affect everything from the amount of insurance they have to pay on a car or a house, or even if they will be able to get a loan for a house.

“In fact, until the debt is repaid, the student will not be able to enroll in another college in all likelihood,” Baldwin added. “The school they owe the funds to won’t release a transcript to the new college until the debt is cleared.”

In the spring semester of 2015, State Fair Community College had 176 students who owed the college for unpaid debts.

The total dollar amount for those unpaid debts was $150,029.46.

“We have students who owed the college a low of $88.94 to a high of $2,055.87,” Shelly Williams, purchasing specialist for SFCC, said. “The average amount was $852.44 per student.”

The college makes every attempt to collect the unpaid balances on the student accounts before they turn the students over to a collection agency.

“We really do try to work with the students first,” Williams said. “Our office sends out letters after the first 10 days when a student has an outstanding balance.

“Federal government guidelines say that a student has 45 days in which to make the payments after they default,” Williams added.

If the funds are not repaid to the government by the student, the college is required to repay the money back, which can create a deficit for the college or university.

“We just need the students to take this seriously when we tell them they have an unpaid balance,” Williams said. “Often, they don’t until it is turned over to a collection agency. Then, some of them do.

“There really is a lot of debt out there,” Baldwin said. “We’ve seen a big change, especially in the last 10 years in how people pay their bills.”

“There really are a number of students who are really trying to better themselves,” Karen Zullig, of Credit Reporting, said. “They really do follow through.

“There is another group who don’t take any responsibility for what they owe,” Zullig added. “Often they don’t follow through on anything until they realize they want something and they can’t get it with a debt on their account.”

Baldwin and Zullig both said their agency is willing to work with the student to collect money owed.

“We are not a pay it all at one time agency when it comes to student loans; we will accept small payments,” Baldwin said. “We really do want to help them get the loan paid.”

Williams said SFCC is willing to work with the students as well, but wants individuals to know the college is looking at other methods to collect the outstanding debts.

“We are starting to look at other models for re-payment,” Williams said. “Every time we have to turn a student over to collection we actually don’t get the full re-payment. The collection agency retains a portion for their services.”

The college may have to pass the cost of the collection fees on to the students who default on their payments or institute a flat rate for the services.

“It really all comes down to communication,” Baldwin said. “I don’t think at times the students fully realize what they are signing when they accept the loans or grants.

“They see a check and they spend it,” she added. “Then they don’t realize they have to repay that money if they don’t complete the terms that they signed.”

Baldwin said the students need to communicate with the college and the credit unions when they are notified that they owe money.

“It really does come down to admitting that they need help,” Baldwin added. “We really do know that life happens but not paying their debts can have major implications to their financial future.”

Hope Lecchi can be reached at 660-826-1000 ext. 1484

Sedalia Democrat

Hope Lecchi can be reached at 660-826-1000 ext. 1484

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