GradFest explains debt

GradFest taught graduating students about the ins and outs of finance after college.

by Rebecca Bentz

GradFest might sound like fun as seniors look ahead to life after the University, but it ruined Nicole Hansen’s Thursday by reminding her just how much she must pay back in student loans.

The communications senior was one of hundreds of graduating students who crammed into Coffman Union’s Great Hall for financial aid exit interviews and graduation-related informational exhibits.

“It’s somewhat disturbing to go right into the job force this much in debt,” she said.

Hansen won’t be the only one paying off a hefty sum in the years after graduation.

Minnesota ranked sixth in the nation in 2005 for average student debt upon graduation, according to the Project on Student Debt. Spring graduates from the state’s public and private four-year schools owed on average $20,560. Graduates at the University owe an average of $23,688, according to the University Office of Student Finance.

Finance Administrator Tom Schmidt from Student Financial Collections said exit interviews are vital because graduates must repay a large amount of loans and often face serious consequences when they don’t manage their debt successfully.

Financial aid exit interviews are required of any student who received a federal or University-sponsored student loan.

“The exits are really important,” he said. “It’s amazing how many students leave here and then end up calling us with questions.”

Student loans can be difficult for recent graduates to manage, especially on entry-level salaries, Schmidt said in his presentation to students. Understanding each loan is the key to successfully dealing with debt because every loan and borrower is different, Schmidt said.

Students should think about what repayment plan works for them, he said. They can consider consolidation, cancellation or deferment options.

The best way to visualize loan repayment options is a budget plan of some kind, which allows students to see exactly where their money goes each month, according to Schmidt’s presentation.

The University provides budgeting tips and loan information through the Office of Student Finance. Boynton Health Services and Lutheran Social Service Financial Counseling also offer students one free consultation with a financial advisor.

The Office of Student Finance is continually working to find better ways to get loan information to students, Schmidt said.

“We’re trying to make it better year-round for students,” he said.

The Office of Student Finance hopes to have more information available at entrance interviews and throughout students’ careers at the University, Schmidt said.

Many students, though, found the exit interviews’ set-up surprising.

Hansen, for example, said she expected a quick one-on-one interview with a financial aid counselor, rather than the 30-minute presentation on credit card management, budgeting and student loans.

“It’s almost childlike,” she said. “So much of the information doesn’t pertain to a lot of people; the entrance interview covered most of it. Unless you’re living under a rock you’ve already heard this stuff before.”

Students like Gabriel Garcia and Julie Huyck also said the larger exit interviews weren’t effective.

“The entire GradFest is great; without it I wouldn’t know what to do or where to go about graduation,” said Huyck, a nutrition senior. “But the financial aid part was a bit much. It was way too rushed.”

Garcia, a cultural studies and comparative literature and Spanish senior, said he wished the financial aid presentation had been handled differently, but the exit interviews were still necessary.

“It was good information; you kind of have to do it,” he said.

Schmidt said the reason for holding exit interviews during GradFest is so students can get the information they need and figure out other graduation-related planning at the same time.

“I know it’s boring, I know it’s dry,” he said. “But lots of students come up to us and tell us how helpful the information is. Unfortunately, it’s usually after they’ve made mistakes.”

Representatives from TCF Bank and US Federal Credit Union were also available to help with post-graduation financial planning.

“It’s an opportunity to help meet student needs and reach out to a different part of our community,” said Rachel Gronewald, a US Federal Credit Union representative.