WASFAA - Western Association of Student Financial Aid Administrators

February/March 2002

Online Publication

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Students who borrow may especially need career guidance.

Features ...
Career Aspirations Affect Ability to Repay Loans
by Connie Kent, Debt Management Director, National Student Loan Program

You've probably all read research that shows that borrowers who are unemployed or in low-income jobs are more likely to default. There appears to be a correlation between a student's career choice, borrowing habits, and loan repayment. Students who borrow may especially need career guidance.

How can you help students understand the impact of their career choice on their ability to repay student loans? Help them evaluate how much they should borrow based on how much they will earn after school. Find typical starting salaries by contacting businesses in your community, checking with the campus career office, or by going to the Bureau of Labor Statistics' website at http://stats.bls.gov/oco/home.htm to find the Occupational Outlook Handbook.

Remind students that there are flexible repayment plans and that repayment can be based on their income. Give them examples based on borrowing averages at your school.

Counsel students not to over borrow. Be prepared to use your professional judgment when evaluating the amounts students borrow. Schools have the authority to deny or reduce loans based on individual circumstances.

This default prevention tip was provided by the University of California, Berkeley during the Department of Education's Student Loan Repayment Symposium.

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