Taehwan Jeon
1/04/14

I choose “Loans”, specifically, college student loans, for my motivational essay topic. I chose it not only because it is an interesting topic but also because it will be an inevitable part of my peers and my college experience so it is important to be informed. I strongly believe there are numerous steps to prepare for the future and hopefully save money by being aware of our options and understanding how the process works.

One of the ways we can be aware is to understand the loan terminologies such as Stafford, Perkins, PLUS, Private loans. Stafford loans are the most common federal education loans students receive. They can be either subsidized or unsubsidized. Perkins loans are low-interest federal loans, administered by the school, for students who demonstrate exceptional financial need. PLUS loans can cover expenses not met by other federal financial aid. These can be taken by dependent students’ parents or by graduate student. Private loans and state loans are not federal aid, however, they can help students ineligible for federal aid or those who do not receive enough aid to cover the cost of attendance.

Another way we can be aware is to understand an insider’s perspective of college loans from personal experience. My interview with a college graduate gave me a better idea of how it affects her personal finance.
Did you need to borrow a large amount of loans? Yes.
What bank did you use for college loans? The government offers financial aid, grants, and loans.
What was the interest rate? It varies from school to school and state to state.
How much do you owe at the most? Well, I went to a state school so it was less than $20,000.
How much longer do you think it will take to pay back the loans? Well, I went back to school so it will probably take me a little longer, maybe 5 years.
Were college loan worth it? Yes, of course, because it helped me to go to school when I couldn’t afford it.
How did college loan affect your life? It affected my spending life because I had to budget well.
What type of college loan did you use? I used Stafford and Perkins loans mostly.
Was the interest rate bearable? The interest rate increased over time so it was little hard but manageable once I learned to save money.
Did your interest rate increase over time? Yes.
How do you feel about your loans? Although, I am grateful, I wish tuition wasn’t as expensive as they are.
How much do you pay back on average per month? Well, now that I am back in school again I pay less than I used to, so I pay about $200 per month.
If you can go back in time, would you have done something differently to go to school? I would have probably saved a little more money in high school by working in a part time job or going to a cheaper school. Overall, loans are not that bad if you learn to budget and discipline yourself. A third way we can be aware is to understand how loans affect society as a whole and the economy. “Of the 37 million borrowers who have