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GCC works with students to limit borrowing

GREENFIELD — Congress has spent the past weeks and months sorting out the interest rates on federal Stafford student loans, but there have not been droves of students coming into the Greenfield Community College financial aid office asking about the debate.

That’s because students may not understand what is being discussed or may feel disconnected from the conversation, said Linda Desjardins, the college’s director of financial aid.

At GCC, financial aid counselors actively work with students to help them understand their options and minimize the amount of money they borrow each year, she said. Less than one-third of GCC students took a federal loan last year, at an average of $3,800 per student.

“We don’t want students leaving here with $30,000 worth of debt when maybe it really only costs them out of pocket $6,000 to be here,” said Desjardins. Students meet with school financial counselors, and loans are always awarded last and only if necessary, she said.

Higher education costs continue to increase across the country, which set the stage for the debate in Congress about student loan interest rates.

In a bipartisan bill passed by legislators Wednesday, interest rates for undergraduate students would fluctuate based on the financial market. Rates will be lower this year (3.9 percent) than in the past, but could increase as high as 8.25 percent in the years to come. Graduate students and parents will pay higher rates.

Loans are a source of revenue for the federal government and Desjardins said that it routinely lets students know they’re eligible to borrow the maximum loan amount. This doesn’t help students, who may not have made a significant financial decision before and are likely to jump at the chance before considering the full repercussions, she said.

Students don’t have to pay their loans back to the federal government until some time after they graduate, leave school or stop attending at least half time.

But interest builds up on the loans from the moment they’re given to students.

Students with the greatest financial need receive subsidized loans, which means the government pays the interest while they’re in the school.

But most students also have unsubsidized loans, where the burden of paying the interest is always on the students. Last year, the rate was 6.8 percent, which was double the subsidized rate.

And if students take out too many loans to pay for their community college education, they may not be able to get help when they transfer to a four-year college and have larger bills to pay, said Desjardins.

GCC financial aid staff work with students to try to find out exactly how much students will spend each year on school and related expenses. They first try to have the costs covered by grants and scholarships, then will turn to subsidized loans and lastly unsubsidized loans.

Students who live in the state and enroll in 12 credits each semester will pay just over $6,000 this year for tuition, fees and books — plus money for outside expenses like transportation or child care.

About half of GCC students receive federal Pell grants and, for most, the grants cover most of these costs ($5,645). But about one-third of Pell grant recipients also have to turn to loans, as well.

Desjardins wishes the federal conversation would change shape. It should be less about a debate over interest rates, she said, and more about finding increases for alternate sources like the work-study program, where students receive on-campus jobs to support their expenses.

State help?

But while there is no guarantee when or if that conversation will happen in the nation’s capital, it will certainly occur on Beacon Hill. State Rep. Paul Mark, a Franklin County legislator, is the co-chairman of a new legislative joint subcommittee that will look at student loans and debt.

Mark said the subcommittee will hold listening sessions all over the state this fall, including in Greenfield, to hear from people about the costs of higher education. The subcommittee will then try to find solutions to help bring these costs under control.

“It’s tough as an 18-year-old to fully grasp what $50,000 in loans is going to mean for the next 20 years of your life,” said Mark, “and how that is going to impact the job decisions and purchasing decisions you are able to make in the future.”

Mark and his wife, both graduates of the University of Massachusetts Amherst, pay $750 a month in student loans.

“That’s a mortgage payment, a car payment,” he said. “That’s money that’s not being saved, that’s not going back into the local economy.”

He believes there are opportunities on the state level to encourage better savings practices, create targeted loan forgiveness programs and promote the benefits of quality, affordable education at public colleges and universities.

You can reach Chris Shores at:
cshores@recorder.com
or 413-772-0261, ext. 264

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