Lead with quotes from the interviews with  Haley Foster and Autumn Jester who expressed some confusion on these issues in the videos

Many student loan borrowers do not know the difference between different types of loans that are available to them, a credit counselor at CCOA (spell out name on first reference) said.

(Revise: All material in red was copied directly from the websites: https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized  or

https://www.drew.edu/financial-aid/loans/

That’s not journalism.

Put it in your words)

Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career or technical school, according to the Federal Student Aid website (include hyperlink to this site).

Direct subsidized loans are available to undergraduate students with financial need, according to the Federal Student Aid website. Direct unsubsidized loans are available to undergraduate and graduate students, and there is no requirement to demonstrate financial need.

The federal government pays the interest for direct subsidized loans while the student is in college or while the loan is in deferment, according to the Drew University website (Include hyperlink). Interest begins accruing for direct unsubsidized loans as soon as the loan is taken out.

Private and federal student loans have similar features but when looked at are abruptly different. First, private student loans are offered by private lenders such as a local banks, credit unions or national banks, or online lenders.(fyi, online lenders have to be some sort of a bank) Whereas federal loans are only offered through the U.S. Department of Education, according to the Student Loan Hero website (hyperlink). Private student loans can also be used to cover both an undergraduate or graduate student’s costs of higher education. They can cover other expenditures such as students who are completing their residency after medical school or law students taking the bar exam.

Many lenders offer private student loans to both students and their parents but students may have a harder time qualifying for a loan on their own if a student does not have a good credit score as proof of income, according to Student Loan Hero. A student could also qualify by having a cosigner. Each private lender can set its own qualifications for a loan but the government sets the rules for federal student loans.

Private student loans can also have fixed or variable interest rates and vary from lender to lender. Federal loans, however, all come with a fixed set of interest rates. Also, repayment requirements on private loans vary from lender to lender as well and most will give you between five to 20 years to repay your loans, according to Student Loan Hero. Meanwhile federal loans have several repayment options such as a 10-year Standard Repayment Plan or income-driven repayment (IDR) plans that will set your monthly payments based on your income. Also, and most importantly, private lenders do not offer loan forgiveness programs, but federal student loans can be forgiven in certain circumstances.

The U.S. Department of Education provided this explanatory video about the basics of student loans

Student loan debt necessary for some, but not others
By Haley Ruiz

College students across the country have utilized different resources to pay for their higher education, whether it be loans, scholarships, federal aid, working through school or getting help from family members.

But with many individuals relying on loans to finance their education, the student loan debt crisis is impacting more people every year. Over 44 million borrowers in the U.S. collectively owe about $1.5 trillion, according Federal Reserve data.

This is more than Americans’ auto loan debt, which is about $1.1 trillion, and credit card debt, which is about $977 billion, according to CNN Money.

The average student in the U.S. in 2016 had $37,172 in student loan debt, according to College Scorecard data. The average for Arkansas in 2016 was $26,800.

“I don’t think I realized at the time, when I was taking out those loans, what an impact they would have in my life long-term,” said Chelsey Burton, 26, a first-grade teacher who is about $40,000 in debt. “I just saw it as a necessary evil.”

Chelsey Burton said she does not regret taking out loans because otherwise, she would not have been able to get a degree.

“For me, it’s invaluable even though I have to make those payments,” Chelsey Burton said. “I feel very called to (teaching).”

Some demographics are more affected by the debt crisis than others though, such as students at historically black universities and women.

Arkansas has four historically black universities: Philander Smith College, University of Arkansas at Pine Bluff, Shorter College and Arkansas Baptist College, according to College Scorecard data. All four institutions have a higher median debt than the national average of $9,185.

Additionally, women have more student debt than men, both nationally and in Arkansas, according to College Scorecard data. Nationally, females averaged $12,000 in student debt in 2016, while men averaged $11,000.

Student loans hinder some individuals from contributing to their savings or retirement, financially helping a friend, obtaining loans to pay for a car or house, pursuing a graduate degree or working in their ideal career field.

Lexie Kerr, 29, is a student pursuing an online Master of Social Work from the University of New England. She is about $100,000 in debt. Kerr said she received academic and dance scholarships while pursuing her undergraduate degree at the University of Arkansas, but she dropped out because she did not know what she wanted her career to be. When Kerr reenrolled, she did not receive much financial aid, she said. For graduate school though, Kerr is getting assistance from the Department of Veterans Affairs because her dad is a veteran, she said.

Kerr said she completed a year of her Master’s in Counseling at the UofA but had to leave because of a family emergency. After she left, she cofounded Courage Therapeutic Riding Center and needed an online degree plan. She could not find an online counseling program she thought was legitimate, so Kerr switched to social work, she said.

Kerr said student loans have prevented her from buying food and diapers for a friend who was struggling.

“She’s been having a rough time,” Kerr said, “but that month I already made my payment. That money is already gone.”

Kerr said she also had trouble paying rent, so she decided to put an RV on the property of Courage Therapeutic Riding Center. Kerr said she needed a cosigner for the RV though, because she had so much debt.

Another example of how Kerr’s credit impacted her is when she needed a loan for a new truck after hers was totaled. Kerr could not obtain a loan for one, so she bought one from her dad, she said.

Kerr does not take vacations, has had a second job in the past and is making payments on loans that are still in deferment, in an effort to minimize what she owes, she said.

Another college graduate dealt with a situation similar to Kerr’s.

Sean Hill, 27, is about $52,000 in debt. He had a scholarship that paid for almost all of his associate’s degree at Northeastern Oklahoma A&M. He received Pell Grants when he transferred to the UofA, but he did not have funding to cover textbook costs or living expenses. Hill said he worked at least five nights a week all four years of college on top of a full course load.

Hill said his debt-to-income ratio has caused issues with obtaining a loan to purchase a house. He had to have a cosigner, he said. Hill said he also needed a cosigner for a new car after his was totaled.

“My credit is damn near perfect,” Hill said, “but that debt-to-income ratio hinders you, and they don’t tell you that upfront.”

Hill has a Bachelor’s Degree in Animal Science, but he is a closing agent at Lenders Title Company in Fayetteville.

“A lot of those companies that are based around animal science wanted several years of experience,” Hill said, “and I just didn’t have that fresh out of school.”

Hill said his student loan debt impacted his career choice. He needed to get into the workforce and start making money immediately because some of his loans did not have a long grace period after graduation, Hill said.

Chelsey Burton said when she was younger, she too was denied a bank loan for a car. A friend’s parent loaned her money. Also, Chelsey Burton attended the University of Central Arkansas for two years, but she dropped out because she could not afford it, she said.

Chelsey Burton said she did not save money for school during her years off because saving that amount of money seemed insurmountable to her.

“Paying for tuition is several thousand dollars and I had bills to pay,” Chelsey Burton said. “I was sustaining my regular life, like making car payments and rent. I just knew that when the time came I would have to go back to taking out loans in order to finish.”

Chelsey Burton finished her degree at the UofA. She said she transferred schools because she had friends in the area.

Chelsey Burton worked through college until she got married, but now that she is married (to someone without student loan debt), she encounters different challenges, she said. There is not as much money to put toward savings or a college fund for our child, which is the irony of the whole situation. Chelsey Burton said she and her husband have less money to give back to the community, and they budget less money for going out.

“We have to sacrifice in other areas because I have to make loan payments every month,” Chelsey Burton said. “I would say the biggest part of our life that’s been affected is the day to day stuff.”

Others have benefitted from their lack of student loan debt in that they were able to start businesses or pursue their dream job.

Omar Kasim, 24, is the owner and founder of Con Quesos and Juice Palm in Fayetteville. He received a full-ride to the UofA and has $0 in student debt.

Kasim said if he graduated from the university with a lot of debt, then he probably would not have started his businesses.

“If I had debt I needed to take care of,” Kasim said, “a smarter choice would’ve been to go work for someone or another company and try to reduce that as much as possible, if not eliminate it altogether.”

Ryan Burton, 29, is the owner and founder of Burton’s Creamery. He is married to Chelsey Burton. He paid for college through scholarships, working during the summers, and he received financial help from his parents. Ryan Burton has $0 in student debt.

Before going into the ice cream business, Ryan Burton was in a band, he said.

“Initially, moving to Nashville to do music was a very ‘I have no idea what’s going to happen type thing,’” Ryan Burton said, “so if I had a lot of debt, that’s probably not a path I would have pursued. I probably would’ve done something that could immediately start bringing in an income.”

Ewald Visser, 25, is an employee at Readerlink, the main book distributor to Target, Walmart and other large non trade outlets. He paid for college through working, scholarships and receiving financial assistance from his family. Visser has $0 in student debt.

Visser said he has friends who are still repaying their loans.

“I can see that it’s something that weighs on them,” Visser said.

Some individuals had similar ideas as to why so many students graduate with debt.

Kasim said it is hard for students to see how much debt they are accumulating because they do not have to start repaying it until after graduation.

“All throughout school, you should work on paying that loan down so you don’t have this big hurdle that you just can’t overcome,” Kasim said. “If you have to pay for everything along the way, you wonder about how bad you want a college education.”

Chelsey Burton said some students do not understand how much their education costs if their parents are paying for it and may mess around in school because of it.

Kasim and Chelsey Burton said not everyone needs to go to college because society needs people with vocational and trade skills, like welding and dentistry. They also said the system is overpriced and that many students do not comprehend the loan process. They said there should be a better way of educating high schoolers about higher education without pushing them to go to college.

Some borrowers have decided to not make too many concessions within their lifestyles in order to repay their loans sooner.

Hill said he does not want to sacrifice more than he already does and live paycheck to paycheck because of his debt.

“That’s part of why I only make a little bit over the interest payment,” Hill said. “It’s because I have a budget where I can live comfortably. I can go on vacations, and I can afford my car payment and my house payment.”

Kerr said she realizes her job choice is impacting her lifestyle and ability to pay back her loans.

“I’m in a job that I’m choosing that’s making less money than if I went out and got a corporate job,” Kerr said. “This is what I’m supposed to do. I’ve never once thought I need to go get a job in corporate or in a bigger industry or in an office or something. I know we’re just going to keep growing, so I’m not going anywhere, student loans or not. I’m not ready to give up.”

Sources:

Omar Kasim – founder/owner of Con Quesos and Juice Palm
Email: omar@kasimventures.com
Instagram: @misterkasim (how we scheduled interview)

Lexie Kerr – cofounder and operations director of Courage Therapeutic Riding Center
Phone: 479-883-9468

Ewald Visser – employee at Readerlink
Phone: 479-685-8897

Ryan Burton – owner/founder of Burton’s Creamery
Email: burtonscreamery@gmail.com

Chelsey Burton – first grade teacher at Owl Creek School
Phone: 903-278-9055

Sean Hill – closing agent at Lenders Title Company
Phone: 479-790-6304

$1.5 trillion in student loan debt is the price that over 40 million Americans are collectively paying for degrees from institutions of higher learning.

African-American students that attend or graduate from one of over 100 historically black colleges and universities leave with an average debt that is greater than their counterparts. While education is pushed heavily in minority communities, financial education regarding how to pay for college isn’t a topic that’s typically up for discussion.

According to a survey conducted by the Pew Research Center, African-American and Hispanic parents are more like than white parents to see a college education as essential for their children. For parents raising their children in poor economic circumstances, this mentality is linked to the idea that in order for their children to be a part of the middle class they must have a higher education. In comparison, white parents are more likely to already be a part of the middle class, therefore education isn’t needed for their children to get that status.

Having freedom of the mind is priceless, but obtaining it comes at what cost?

Demetrius Gilbert, the Associate Dean of Academic and Student Affairs at Shorter College, has transitioned from a life of being served as a student of a historically black college and university to serving students at an HBCU. Gilbert obtained a bachelor’s degree from Jackson State University, after graduating she received her master’s degree and went on to get a doctorate. Currently, she is trying to earn a second Ph.D. and has $160,000 in student loan debt that she has been paying on monthly since 2011 and it is still at $160,000, she said.

I will probably die still owing them, she said.

Gilbert graduated with her bachelor’s degree owing only $450 in student loan debt. After paying that debt off completely she decided to go back to school to get her master’s degree, even though she didn’t have the money to pay for it out of pocket. After graduating, with only $7,000 left to pay back from getting her master’s degree, Gilbert decided to go back to school again to get her Ph.D. This degree is the one that cost her the most.

Arkansas has four historically black universities, Philander Smith College, the University of Arkansas at Pine Bluff, Shorter College and Arkansas Baptist College, according to College Scorecard.

All four Arkansas historically black institutions and colleges have a higher median debt than the average $9,185, according to College Scorecard.

Because of this, students may have to borrow at higher rates at historically black universities than at other institutions, according to the UNCF report Fewer Resources, More Debt: Loan Debt Burdens Students at Historically Black Colleges and Universities.

Raven Cook, an educator at Crystal Bridges Museum of American Art and the founder for Foundations: Black History Educational Programming, attended the University of Arkansas at Pine Bluff briefly before transferring to the University of Arkansas Fayetteville to major in African American history, she said.

“It’s an honor to go to (a historically black college or university), but it’s also really expensive,” Cook said.

Historically black colleges and universities are institutions founded during the Jim Crow era, or during segregation. In 1896, separate institutions and facilities were created for African Americans under the Separate but Equal doctrine, Cook said.

Today, African American students attend historically black colleges and institutions to become more connected to black culture or to experience it for the first time along with receiving an education, Cook said.

“It’s a very rich environment to learn about being black,” Cook said. “And it’s the subtle things, like always speaking to a black professor as they’re walking up or down the sidewalk, going to classes and hearing the subtle integration of black history with what you’re learning. The buildings you walk into are even named after black people sometimes.”

Some African American students, like Cook, might choose predominately white institutions or other types of colleges over historically black colleges and institutions because their degree program might be more focused there, or they might have better access to jobs, Cook said.

Philander Smith College a private historically black college has the second highest first-generation student loan debt at $20,000, $500 less than Hendrix University a private liberal arts college which has the highest first-generation student loan debt, according to College Scorecard.

Philander Smith College also has the third highest median student loan debt in Arkansas at $19,000, and the highest median and first-generation student loan debt for all historically black universities, according to College Scorecard.

Philander Smith College may have the highest median and first-generation student loan debt because it has an open-door policy, where students that may have not taken the ACT can attend, University of Arkansas at Pine Bluff alumna Patricia Swinton said.

Swinton graduated with her undergraduate degree from UAPB and went on to teach at Philander Smith College.

“A lot of the students that go are poor to medium income students that normally wouldn’t have had a chance to attend college if Philander didn’t reach out to them,” Swinton said.

On-campus students at Philander Smith College pay a direct cost, or what students usually pay to attend Philander Smith College, of $20,814 and off-campus students paying a direct cost of $12,564, according to Philander Smith College’s cost of attendance 2016-2017.

At the University of Arkansas at Pine Bluff, 2016 graduate Maranda Barris has over $40,000 in student loan debt that she accrued getting a degree in mass communications and theatre. Had she known more about scholarships she wouldn’t have applied for loans, however, her parents didn’t go to college so they couldn’t tell her much about the different routes there are to pay for school, she said.

At HBCUs, Greek life plays a large role in the college experience. During her time at the University of Arkansas at Pine Bluff Barris became a member of two Greek life organizations, Alpha Kappa Alpha Sorority Inc. and Tau Beta Sigma National Honorary Band Sorority. 

“I knew I was going to pledge and the money wasn’t an issue at all,” Barris said. “I worked throughout college and lived off campus, so that refund Check came right on time.”

“If I knew then what I know now, I probably wouldn’t have gone to school for what I wanted to do,” Barris said. “I wish I would have traveled the world and experienced other things I haven’t before. Instead, I was stuck wondering what and how I was going to eat in college, and even if I had enough money for books.”

Nearly 64 percent of historically black colleges and university graduates borrowed over $20,000 in loans in comparison to 37 percent of non- historically black colleges and university students. Four-year historically black colleges and universities cost on average $21,707, less than four-year non-historically black colleges and university, which are on average $30,108, according to the UNCF report.

Shorter College is trying to educate students about student loan debt, said Bryan Neal a sophomore at Shorter College.

Neal is a general studies major at Shorter College and is planning on going to either University of Arkansas Little Rock or the University of Central Arkansas after he graduates to get a bachelor’s in economics and finance. When he is done, he expects to have $30,000 in student loan debt, $10,000 of which from Shorter College, he said.

Neal thinks Shorter College is more concerned about education and what its students can afford. The financial aid department visits classes and has an orientation about student loan debt, where faculty warns students about taking out more than they can afford, he said.

This is not always the case though, 2013 Philander Smith College graduate Jeremy Williams reflected on his time at the college. Williams had a scholarship from Philander Smith as well as the Arkansas Challenge scholarship and was frustrated to find that even though he should have had enough to get a refund check he never received one. He had to take out student loans just to pay for textbooks, he said.

“It wasn’t a lot at first,” Williams said. “Probably like $5,000, I think. More debt came when I started getting my master’s. Which is what I’m in now because the more education you get the more money you have to take out to go.”

This is not an uncommon problem among historically black colleges and universities former RA and Philander Smith College graduate Tarai Rolle noticed from his experience at Philander Smith College. While he can only speak for his alma mater, many of his peers that attended historically black universities and colleges have come across the same issue with financial aid offices not educating students on how to properly apply and take out loans, or even when those loans have been taken out, he said.

This is because historically black colleges and universities are often smaller, with two to three people running a department that is trying to meet the needs of thousands of people. At Philander Smith College, where many students are on financial aid or are taking out loans, the financial aid department might be overloaded with work, Rolle said.

“I think is just overwhelming for them so they have to do their job as efficiently as they can and sometimes it’s just not done the best way,” Rolle said. “They just make sure they get the job done.”

Departments at historically black universities and colleges are typically not as large as predominately white institutions. Because of a lack of funding, grants and donations that larger institutions draw in historically black universities and colleges financial aid is its largest obstacle, Cook said.

“When I went to a (historically black college and university) I absolutely loved it, it was so much fun,” Cook said. “But I will say financial aid was a huge challenge for me, and I think there has to be a push on all levels to get students conscious of opportunities that they have.”

A way to decrease the amount of debt historically black colleges and universities and non- historically black colleges and universities is for federal policymakers to reshape federal student aid policies and programs to help students secure more resources, according to the UNCF report.

Cook thinks that politicians, and African American people, should invest more in education and historically black colleges and universities to make sure they stay alive. Efforts could also be made to find alternative housing for students that are more affordable to reduce tuition costs, and to give students a larger scope to live instead of just campus, she said.

“Every level has to have people committed to working to make sure HBCUs are really, really protected and valued as they should be because they are really special spaces that have kept us going for a long time,” Cook said.