30, 2000, Gazette)
Being a student is expensive. The recent convocation ceremonies
have kick-started some students into worrying about their huge
debts as they emerge from university. The cost of renting a graduation
cap and gown is peanuts compared to the cash that some students
are going to have to come up with and soon. At $20, with
a $30 deposit fee, renting this convocation wear is worth every
penny. After all, for students, convocation is an eagerly anticipated
event. Meanwhile, each year, a significant number of students
also anticipate the whopping loan payments that are soon to begin.
With an interest rate of 10 per cent, student loans are extremely
expensive over the long term. Students are given a maximum payment
period of 14 years. If the loan is paid over a 14-year period
(they automatically give you 14 years), the amount paid will
double. A loan that was originally $30,000 will cost approximately
$60,000 if paid in monthly installments over the course of 14
years. Hence, this financial burden will follow some students
into their middle age. Unfortunately, some students are not aware
of the impact interest rates will have until it's too late. Paying
double the money one is expected to pay for one's education is
a very nasty reality check. Many university graduates will want
to settle down and start a family at some point during this 14-year
span. Being broke is discouraging when considering supporting
a house pet, let alone a growing family.
Of course it's great that student loans provide the option of
going to school, but at a 10 per cent interest rate for more
than a decade? This influences the decisions of working graduates
drastically. Student loan debt makes life very difficult for
many university graduates. Post-secondary education is important,
and being employable is very important once you have racked up
such a debt. Adapting efficiently to life with debt is essential,
and this adaptation involves financial and other sacrifices.
Students are sometimes forced to choose between the jobs they
want (that may act as a stepping stone to a career in their field),
and the jobs that will better pay their bills. People cannot
work their way up as easily if they have to deal with living
expenses and an ever-present $500 loan payment every month.
This demanding debt means that for some, buying a home or a car
is out of the question for a long time. Some graduates find they
must move elsewhere to work instead of staying here with friends
and family. What an awful reward for attaining a degree and moving
into the work force. Debt and the need to meet payments is the
urgent motivator. Higher currency rates in the U.S. have attracted
many of our graduates. Those with a pressing debt to eliminate
(as well as a whopping 10 per cent interest rate to consider)
want to pay their loans as quickly as possible. Thus, making
almost 50 cents extra for each dollar quickly becomes an important
consideration in deciding where to live and work.
So, due to such financial pressures and a considerable unemployment
rate, Newfoundland is losing out on an extremely precious resource
university graduates. Too many are moving, or are planning
to move, to the mainland, Ireland, and even as far away as Korea.
Graduates from the rural parts of the province may simply be
unable to return to their small communities with such a debt
facing them. While some are still optimistic about finding financially
adequate employment here in Newfoundland, others are already
planning their job interviews in other parts of the world.