What students need to know about repaying loans

By Tim O’Brien 

A financial planning professor at the University of Georgia is on a mission to improve what students know and understand about their loans.

“I’m trying to work on more outreach so that students can better understand things like student loans,” said Kimberly Watkins, “because there are a lot of students who are uninformed/misinformed on this process.”

Watkins, an assistant professor in the Financial Planning, Housing and Consumer Economics department, teaches a capstone course that focuses on building a comprehensive financial plan, which includes understanding how to repay student loans.

Watkins explained that when students apply for a loan they essentially have two options: subsidized loans and unsubsidized loans. Subsidized loans have deferred interest during the duration of enrollment— interest that begins accruing after graduation—while unsubsidized loans accrue interest throughout college. The biggest gap in knowledge exists involving interest.

When it comes to getting and repaying student loans, Watkins said students need to be a part of that process. That’s why individuals seeking a student loan go through both entrance and exit counseling to ensure they are aware of the responsibilities of being a borrower.

But this only happens once at the start of enrollment, and then once at graduation, which Watkins said isn’t enough exposure to fully understand the obligation student loans represent.

“Think about an 18-year-old sitting there going to college for the first time,” said Watkins. “Were you thinking about your future financial obligations to the federal government?”

Claire Rodriguez, a former student of UGA, understands Watkin’s point.

“I was super financially illiterate when it came to loans and financial aid,” said Rodriguez, “I just knew I had to take out loans. So I filled out FAFSA, I accepted what they offered, and you know…you don’t have to start paying it back until you graduate.”

The FAFSA form Rodriguez mentioned is the Free Application for Federal Student Aid, and is required for anyone seeking federal aid such as grants, loans or work-study jobs, according to the U.S. Department of Education website.

As a Georgia resident with the required grades, Rodriquez qualified for the state tuition assistance programs, the HOPE and Zell Miller Scholarships that are funded by the state lottery. Those programs covered 90% of her tuition, and she used subsidized student loans to finance the last 10%, she said.

When Rodriguez went through one of those entrance counseling sessions, she learned about how loans can be forgiven. “It was essentially to die,” said Rodriguez. “They do want you to pay them back so they make it as straightforward as possible.”

Loan forgiveness first become a key talking point during the 2020 Presidential Election, but a global pandemic spurred on real government action. On March 27, 2020, President Trump signed the CARES Act which paused all student loan payments and interest.

“It was huge,” said Rodriguez, “When COVID hit, I was not working full time, so I definitely benefited from that.”

Seven years after graduation, Rodriguez has not yet fully paid off her student loans, but because of the COVID deferment no interest has been accruing. “I am sort of in that waiting game of loan forgiveness,” said Rodriguez, “but I’ve saved enough to pay it off.”

While the pause is helping many stay afloat, forgiveness remains a confusing topic.

“I think one of the biggest misconceptions is that people have just really confounded political talking points to actual policy,” said Watkins. “That’s not a blanket approach, that’s not real.”


Tim O’Brien is a journalism student at the University of Georgia

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