Students who don’t qualify for
sufficient financial assistance under
the government’s Federal Direct Loan
program sometimes resort to taking
out private loans.
Sherry Nelson, the student loan
specialist at UW Credit Union in
Stevens Point notes that UW Credit
Union has been offering private
loans since 2006 and since then has
provided $4.8 million in loans to
“For the 2013-2014 school year
so far, we’ve provided loans to over
70 students with an average loan
amount of $7,260,” Nelson said.
She explained the difference
between government loans and
“Essentially, the government is
acting as the lender for any federally-
guaranteed student loan and they
are able to provide many different
deferment and repayment options,”
Nelson said. “Whereas, private
student loans are through a financial
institution, like UW Credit Union.
They will have requirements specific
to that institution’s financial loan
program. Deferment options and
repayment terms often differ from
Another difference is that
government loans aren’t based
off a student’s credit history, so a
cosigner is not needed. However, a
cosigner will typically be needed for a private student loan because students
generally have limited credit history.
“Students have six months from
after they are out of school and must
start to make payments on their loans.
A standard payment plan lasts about
ten years, but there are other options
available if students can’t make their
payments,” Scipior said.
Sara Kline graduated from UWSP
in May 2011 with a bachelors degree
in sociology and recently earned
her master’s degree in rehabilitation
counselling from Minnesota State
Mankato in May 2013.
She is now a part of the workforce
and does feel stressed about being in
debt, especially since she will start
her repayment process in November.
“It’s quite intimidating to have
a debt of any kind, whether it’s for
a car, house or student loans, but I
know my education was a worthwhile
investment,” Kline said.
She gave some advice to students
in school who are taking out loans.
“Save as much as possible. Put
money away every chance you get.
Six months is a short amount of time
to get your feet under you financially,
so having a head-start can be a big
help,” Kline said.
Scipior noted that UWSP students
have been extremely punctual about
paying back their student loans.
The percentages reflect the
amount of students who had difficulty
paying back their loan money.
“Our students have a good
repayment history. The most recent
Two-Year Cohort Default Rate for
UWSP students is 2.8 percent. The
Wisconsin average is 6.0 percent
and the U.S. average is 9.1 percent,” Scipior said.
In most cases, understanding the debt and knowing the repayment
options will help a student manage it
in the long run.
“It is important to know what
you owe and how much it will cost in
repayment,” said Scipior. “The more
money you take out, the more debt
you are in.”
“It’s essential that students
educate themselves on all of the
loans they’re borrowing throughout
their student career,” said Nelson.
“Keeping documentation, paying
attention to loan balances, returning
unused/unneeded funds and making
interest payments whenever possible
If students are conscious of their
loans and total indebtedness, as well
as have a financial limit and are
cautious when spending money, they
are off to a good start for a positive
“If you aren’t very savvy with
planning and budgeting, meet with
someone who is, like a financial
planner, to help you figure out your
payments and budget. Planning goes
a long way in keeping yourself on
track,” Kline said.
Regardless of numbers and
statistics, Scipior wants individuals
to know if they ever get into trouble
or are unable to pay back their loans,
they shouldn’t stop payments, but
they should contact their loan servicer
because there are other options.