Before signing for student loan, consider this

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Another financial aid cycle has begun.

Incoming college students have firmed up their arrangements, often with thousands of dollars a year in loans. And most new graduates have started the six-month countdown before they must begin repayment.

Even if you're long out of college, you've probably heard a lot about loans recently - how they now account for more debt than cars or credit cards, how a Washington standoff could soon trigger a doubling of interest rates.

To sort it all out, The Virginian-Pilot is offering its own "student loan package."

Meet a 35-year-old nurse whose six-figure accumulation of loans gave her a leg up in life - but carved a significant dent in her lifestyle. Learn what vexes students the most and what, perhaps surprisingly, doesn't faze most researchers. Get some pointers on how to be a smart borrower and stay out of default.

How can student loans change your life?

They gave Jeanell Webb, 35, a pipeline to the American dream - but now they're bleeding her pocketbook and keeping her from getting her own place.

Webb didn't stop studying after she graduated from Lake Taylor High School in Norfolk in 1996. She received a bachelor's degree in information technology from Virginia State University in 2001 but couldn't find a job in the field. At the same time Webb longed for a career where she could help people. So back for more school.

She went to Tidewater Tech to become a medical assistant. That wasn't enough. Webb then attended Norfolk State and Sentara College of Health Sciences en route to a bachelor's degree in nursing in 2010. She won scholarships at almost every step, but they didn't cover much of her costs, and her family couldn't help. So she on loans. She figures she owes more than $100,000. Her monthly payments come to $900, by far her largest expense. She sees herself still paying off her college loans as an old woman.

It's strange. In some ways, Webb is a success story. She's clinical supervisor at a medical practice in Chesapeake. She makes $47,000 a year. "I love the company I work for," she said. "I know I'm very blessed."

But some days she doesn't feel like she's made progress. "I'm still living paycheck to paycheck, regardless of my title," Webb said.

She and her 9-year-old son, Johnell, share a house in Ingleside with a roommate. Webb imagines a place of their own if they could use the monthly loan check for rent money. Spending for groceries is tight. She trims the list for herself so she can afford milk and cereal for Johnell.

For the last two months, she's fallen short on her largest student loan, paying $400 a month instead of $700, because she needed the money for Johnell's before- and after-school care. This month, Webb expects to make the full payment. She's looked into filing for bankruptcy, but that wouldn't wipe out her student loan debt.

"It's very disappointing," Webb said. "You go to school for a better life. If this is the way you have to live, what's the point?"

Johnell popped into the living room, his face sparkling with a wide grin, one Friday afternoon last month. He presented his report card, which Webb praised generously, and hung on to stay with her.

Yes, Johnell is a strong student. But she's worried about his future. "I'm trying to save money for him for college, and I don't have anything left to put in his account. I don't want him to go through what I have to go through."

Should the amount of debt you'd take on influence your choice of school?

Some people think so. Paul Merritt, principal of NTrust Wealth Management in Virginia Beach, told his daughter she had to surrender her dream of attending Bowdoin College, an elite private school in Maine, if she wanted to double-major in Spanish and art history. She went to the University of Virginia, Merritt said, and landed a good public-relations job in Washington.

"Parents must look at the economic consequences of their decision-making," he said. "You have to have a realistic idea about what their future job potential is and how much debt they may have to take on to do that."

For the coming academic year, tuition and fees - not including room and board - will cost $30,348 at Virginia Wesleyan College. That's more than triple the $8,450 rate for in-state undergraduates at Old Dominion University.

Arianna Benzineb graduated from Virginia Wesleyan last month with a bachelor's degree in criminal justice. The Virginia Beach native hoped to go into law enforcement, but all she's been able to find is a part-time position as a receptionist at a beauty salon, along with a few baby-sitting jobs. She took out about $25,000 in loans and will have to begin $275 monthly payments at the end of the year.

"Had I known the amount I would be in debt, I probably would have made a different decision," Benzineb said. "I had great experiences at Virginia Wesleyan, and I really liked the professors and the small class size. But if I went to TCC and transferred to a public university, it would have been a better financial decision."

Travis DeGraphenried also graduated from Virginia Wesleyan, but he has no regrets. DeGraphenried, from King George County, received a biology degree and is headed to Eastern Virginia Medical School. He took out $17,000 in loans and expects he'll need more for med school. He's already thinking about practicing medicine in an "underserved" area to earn a break on his loan debt.

"I feel like it was worth it for the experience I got," he said of Virginia Wesleyan. "When you're comfortable at a school, you do all of those little extracurriculars and whatnot, which enable you to get a job in the long run."

Sometimes, with scholarships, a private college could end up being cheaper than a public university, said Jackie Cross, collections manager of Guardian Federal Credit Union in Portsmouth, whose son will start at Johnson & Wales University in Charlotte, N.C., in the fall.

Cheryl Jones, program director for the Access College Foundation, which staffs 29 high schools with advisers to help students find financial aid, suggested a best-of-both-worlds compromise: Start at a state school, and, if you're still interested in a private or out-of-state school, consider transferring as a junior. Colleges usually offer more aid to juniors or seniors anyway, she said.

Could the student loan bubble burst the economy?

Not likely, say researchers of college costs. Despite the challenges affecting borrowers like Jeanell Webb, the alarms sounding about soaring loan debt are "a little bit overplayed," said Mark KantrowitzConsumer Financial Protection Bureau said in April that loan debt eclipsed $1 billion. Yet Kantrowitz said, "We have much more serious problems than the student loan bubble."

How come? "The vast majority of students have a reasonable amount of debt, and they're paying it back without much more burden than past generations," said Donald Heller, the rate on the Stafford loan - the most popular government loan - will double to 6.8 percent. That would apply only to future borrowers.

Obama has warned that would add $1,000 to the average debt load, but that's over the life of the loan. Kantrowitz estimated the average monthly bill for borrowers would increase by $6 to $7.

DeGraphenried, the Wesleyan graduate, takes the long view: "I think federal loans are a good thing. Once you get your degree, you have this debt. But you're able to get a decent job."

Is there anything that the students and experts agree on?

Sure. That the system is convoluted and unnecessarily bewildering for borrowers.

Colleges are required to offer entrance and exit counseling. But "honestly, I didn't know how much debt I was in until I graduated" from Wesleyan, Benzineb said. "You see the numbers, but you don't understand the ramifications before you're out."

Lovely Edwards, a recent journalism graduate of Norfolk State University, is a single mom with just under $20,000 in loan debt. Now she wishes she'd started at a community college or worked while she was in school. "When I went in, it wasn't knowing much about it," Edwards said. "I'm a first-generation college student. We weren't trained or educated about loans or credit hours."

She thinks high school counselors should begin talking to students about paying for college when they're freshmen. In college, freshman orientation should focus as much on loans as it does on academics and extracurriculars. And academic advisers should be better versed in the financial implications of adding and dropping classes.

Colleges say they're trying. At Old Dominion, where 75 percent of students receive loans and where the average debt after graduation is $20,422, the financial aid office provides quarterly meetings for borrowers and workshops on topics such as debt consolidation and management, spokesman Brendan O'Hallarn said in an email.

But most "award letters" for federal loans don't list the interest rate, fees or monthly payments - and might not even use the word "loan" - Kantrowitz said. Some families mistakenly think it's a "free ride" when their children can cover all costs with a combination of grants and loans. Scholarships and grants don't have to be repaid; loans do.

The White House announced a step toward transparency in May: Ten universities and statewide systems - none in Virginia - said they would provide more data to students, including estimated monthly loan payments. It's a decent start, Kantrowitz said, but the government should require schools to release the same data so students can easily make comparisons.

Researchers such as Kantrowitz also say high schools don't do enough to teach financial literacy. Virginia last year added an Economics and Personal Finance class as a graduation requirement.

“The impact of debt and the management of debt are covered,” said Charles Pyle, a spokesman for the Virginia Department of Education. Teachers aren’t required to talk about college expenses, but Pyle said a unit on student loan debt will be added to the curriculum in 2014.

How can I stay out of money trouble?

You're almost done with The Pilot's loan package, which we hope was easier to understand than the real thing. Only one more piece of business before you sign off on it: a few guidelines on how to stay out of financial trouble.

Before you take out the loan:

- Don't automatically agree to the amount offered by a school, said Cross, from Guardian Federal Credit Union. The college often suggests more than you need.

- Calculate the "net price" - minus grants and scholarships - at each college and compare, said Heller, of Michigan State.

- The guiding rule from Kantrowitz, the operator of the financial aid websites: Don't end up with total debt that exceeds your expected annual salary once you get your diploma.

After you graduate:

- Never be late with your payment, said Xerxes Nabongn If you have extra money, pay more than the minimum on the debt with the highest interest rate, Nabong and Kantrowitz said.


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