College students' debt accumulation is rapidly becoming thethird inevitability - right after death and taxes.
But according to an Associated Press report, the EducationDepartment announced Tuesday that during the 2001 fiscal year, thedefault rate on federally backed college loans was at an all-timelow at 5.4 percent, down 0.5 percent from 2000.
This means college graduates are paying back their loans morereliably than ever, and the department cites improved credit andfinancial counseling, more flexible repayment schedules and lowerinterest rates for the decrease.
Though many colleges and universities have imposed major tuitionhikes, Sally Stroup, assistant secretary for postsecondaryeducation, believes the increases will not affect the defaultrate.
"You can only borrow so much money regardless of where tuitiongoes," she said. "There are limits that can control how much peoplecan borrow."
By now, all college students should be aware of the dangers ofmounting debt. According to a Cambridge Consumer Credit Indexsurvey, 68 percent of Americans who have outstanding college debtsay it hinders their ability to make major purchases.
Use discretion when applying for and accepting loans. Don't takeall you can get if you don't need it. Financial-aid checks areawarded so students can be students without having to scrape by onpocket change. They're not for buying cars, couches, guitars orIKEA shopping sprees.
Tuition and living costs, books and supplies are increasinglyexpensive. So the chance that you will end up with a debt, eithergreat or minuscule, is high. And you will have to sacrifice as anadult to repay what you borrow, even if you're stuck whittling itaway with $100 every month.
But the education you're receiving is worth it.
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