How families, students can take control of college debt

Saturday July 6, 2013

Higher education officials and legislators have spent the year negotiating rates for student loans, tuition and fees -- most beyond a student’s control.

However, local college officials say there are actions students and families can make to take better control of college money matters.

Colleges do their best to tout affordability, whether it’s through lower public tuitions or private endowment fund support.

According to the national Project on Student Debt, two-thirds of college seniors who graduated in 2011 had an average student loan debt of $26,600 per borrower, and also faced an unemployment rate of 8.8 percent.

Various institutions across the board provide staff, services and other information which, when utilized properly, can help students and families navigate the at-times complex college financing process.

The first step is knowing financial aid application deadlines, most importantly deadlines for the Free Application for Federal Student Aid (FAFSA). There are federal, state and college-specific deadlines, which can be found online at The website explains what documents and information are needed to apply, from Social Security numbers to tax records.

Every college has an office of financial aid where representatives should also be able to provide help and information, for both current and prospective students. This office can help with loans and grants and help students find scholarships, work-study and paid internship opportunities.

After receiving financial aid awards, families may find they still need to take out an additional loan to help cover costs.

"In the last couple years, because [loan] interest rates have begun to rise, people have begun to look for cheaper rates," said Denise Ackerman, director of financial aid for both Bard College at Simon’s Rock in Great Barrington and Bard College in Annandale-on-Hudson, N.Y.

On July 1, Congress voted to increase federally subsidized Stafford loan rates from 3.4 to 6.8 percent, effective immediately. Though the rate is being debated, the rate holds for all current subsidized Stafford loan applicants.

Ackerman said in addition to other kinds of federal loan and financing products, students and families may look into private loans such as home equity and other bank lending programs.

The range of rates, she said, depends on the "credit worthiness" of the co-signer, based on their current borrowing and credit history.

The primary difference between federal and private loans is that federal loans tend to provide more flexibility and leniency in terms of payment deferment options and forbearance.

"When we’re counseling parents what we try to do is help them develop payment plans to spread out the debt," Ackerman said.

A few years ago, the Massachusetts College of Liberal Arts in North Adams implemented a campuswide financial literacy program; the college now reaches out to both current students and alumni about this.

"Part of the education we try to provide students with is the financial aspect of going to college, as well as what to expect after college," said Denise Richardello, vice president of enrollment management and external relations at the Massachusetts College of Liberal Arts in North Adams.

"I think [students] take [college financing] very seriously. We’re in an economy now where they’re aware of the cost of everything," Richardello said.

Debt data ...

Here are the average college graduate debts when graduating a school in Berkshire County. The data is from the national Project on Student Debt, based on 2011 graduates:

MCLA: Average debt: $29,738; Proportion of grads with debt: 69 percent

Bard College at Simon’s Rock: Average debt: $30,000; Proportion of grads with debt: 69 percent

Williams College: Average debt: $8,801; Proportion of grads with debt: 44 percent


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