In an effort to decrease post-graduation debt, Sacramento State’s Financial Aid Office strives to inform students about loan borrowing and repayment in order to avoid defaults.

According to the California Postsecondary Commission, California State University tuition costs increased by 70 percent from 2000 to 2009. For many students, the increasing cost of attending college means they might have to take on more debt.

According to the Project on Student Debt, Sac State students who completed a bachelor’s in 2012 owed an average of $4,456 at time of graduation, which places the campus among the lowest for debt.

Anita Kermes, director of Financial Aid and Scholarships, said the service aims students help students make mindful decisions when borrowing money, because their choices will affect them in the future.

“We try to advise students to borrow wisely because they will have to pay these back but the good (thing) about loans is that there are multiple repayment and deferment options,” Kermes said.

The Financial Aid Office informs students who are seeking to borrow or have already borrowed and taken on the financial responsibility of subsidized and unsubsidized loans.

Kermes said the subsidized loan does not have to be repaid until six months after graduation, while unsubsidized builds interest during college.

In order to promote low-student debt, she advises students to borrow subsidized loans instead of  unsubsidized loans.   

Christine Sanders, senior sociology major, said she needs to borrow subsidized loans in order to  pay for rent and finish her bachelor’s degree.

In the past, Sanders only accepted subsidized loans, but this semester after reaching a grant unit cap, she had to apply for an unsubsidized loan.

 “I had to take out an unsubsidized loan and because interest is going to accrue right now, I didn’t want to do this,” Sanders said.

Elena Larson, assistant director of University Collections at Student Financial Services, said the primary issue faced by students taking loans is a lack of understanding of the long-term effect of acquiring this debt.

 “It’s very easy to accept the loans that are offered, but if you don’t do the math on what that will mean for you later: you may end up with a monthly payment that is out of your comfort zone,” Larson said.  

Student Financial Services encourages students to create a spending plan in order to understand spending habits and advises to borrow less or not at all.

Students should not feel bad about borrowing loans if they need these to graduate, but if they borrow less, they will not regret this choice in the future, Larson said.

“Young people, in general, understand that they will have to make payments on their loans,” Larson said. “But in my experience, they don’t think about the amount of the payments and how long it will take to pay their debt in full.”

The Department of Education is currently promoting the Pay As You Earn repayment option.  Borrowers using this repayment plan will pay a percentage of their income, and as income increases, so does the payment.

Many students are unaware of the various repayment options available and often struggle with repaying their loans.

Kermes welcomes graduating students to visit the Financial Aid Office to gain a clear understanding of repayment options.

“If you have any questions, even though you graduated or left school, you should always look at the Financial Aid Office as a resource,” Kermes said. “We can point you into the right direction because I do not want anybody to default on their loans.”

The financial aid government website provides tools and information that can help students choose a suitable repayment option.  

On campus, financial aid and Student Financial Services also offer information and workshops that help students understand aid responsibilities and how to manage their budgets.