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A Silver Lining for Student Loans
Posted: Monday, October 18, 2010
Written By:  Brian Kirschner
Contact:  Brian Kirschner
Contact Email:  b.kirschner@usp.edu
Contact Phone:  215.895.1186

Student loans are the dark clouds of higher education for most students. But there is a silver lining. A new study reported by U.S. News and World Report has shown that graduates of USciences are at the top when it comes to repaying and federal statistics back that up.

What does that mean?

It can be surmised that USciences graduates are able to repay their loans because their education pays for itself with a good job.

For those not familiar with student loans, they can be broken down into federal and private borrowing. By the end of schooling, both types of loans go (or have gone) into repayment. If a student cannot repay their loan after exhausting all possible means and options, it goes into default.

A look at the federal statistics (private borrowing stats are not considered nor are they publically available) shows that USciences students are well below the national and state average for default. That’s good news on many levels.

In 2008, the most recent available data, USciences’ default rate was just 1.5 percent as compared to the Pennsylvania state average of 5.8 percent and a national average of 7.0 percent. This is no anomaly as USciences’ average over the last 16 available years has been just 1.3 percent. [http://www.ed.gov/news/press-releases/student-loan-default-rates-increase-0]

“I have found that families are willing to invest in their student’s future,” said Paula Lehrberger, director of financial aid. “Families see the value for their student’s education in the majors we offer and the quality curriculum. This leads to good jobs or further educational opportunities such as medical school.”

The U.S. News and World Report story ranked USciences second among colleges and universities for loan repayment that exceeded the school’s predicated rates. The analysis by Mark Kantrowitz of Finaid.org shows which colleges who have a large number of low-income students do the best at loan repayment and thus must be producing graduates who are getting the jobs to repay those loans. [http://www.usnews.com/articles/education/paying-for-college/2010/10/04/colleges-with-higher-than-expected-loan-repayment-rates.html]. The reasoning behind weighting the rankings is that low-income students have the lowest chance of turning to family for financial assistance.

“I like to equate borrowing for college with borrowing for a car,” said Lehrberger. “At the end of the car loan, you have a car that you will eventually be done with and need a new one. When you are finished paying off your student loans, you have an education that no one can take away from you. You’ll have those skills forever.”

The low default rate also trickles into the world of private lending because private banks are confident that they will recoup the money they lend, according to Lehrberger.

“Private lenders have been pretty consistent in lending to our students,” said Lehrberger. “The recent economic crisis has not really had an impact on our students’ ability to borrow because in the end, the students get a return on their investment in terms of a good job. The banks get the money they loaned returned to be lent again. It’s a cycle.”

Any questions regarding student loans by prospective or current USciences students or their families should be directed to USciences Financial Aid Office at 215.596.8894.

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