With financial assistance on the decline and defaults on the rise, students should exercise caution when taking out loans. This increase in defaults seems to be a long-term consequence of the continued dearth of state and federal funding for higher education.
At the beginning of their college careers, rising tuition costs are forcing students to borrow more and more money at the beginning of their college careers.

Then, once they have graduated or dropped out, the state of the economy — the nationwide unemployment rate was 9.1 percent in August, according to the Bureau of Labor Statistics — prevents students from finding jobs. Their inability to find jobs prevents them from paying the loans back starting immediately, which inevitably leads to default.

It’s a vicious circle of debt.

The problem with the costs of education lies in the inability to find decent jobs shortly after graduation. Loans are worth the price in the long-term future, despite being a less-than-ideal way to pay for college.

If jobs were more readily available for recent graduates, finding income to pay loans back would not be as much of an issue.

Many students end up settling for low-wage or unpaid internships or mediocre jobs. For that reason, loans should be viewed as an opportunity students must be willing to navigate to achieve higher education. When the economy turns around — and it will — students must be ready to pay back their loans.

Being ready to pay later means starting today, though.

Students no longer can be carefree in taking out loans. It’s not 2005, when the default rate on students loans was 4.6 percent and the unemployment rate was 5.1 percent.

Taking out loans to help with living expenses such as food or rent during college years now costs too much after graduation. Most students need to work in addition to their studies to not suffer financially.

Make no mistake, defaulting on loans will cause financial suffering. Unpaid loans will haunt students through garnished wages for what will seem like the rest of their lives, not to mention the effect it can have on a students’ credit scores and purchasing power.

Students at MSU, though, can take some comfort in the fact that they are better off than most. Even with default rates rising from 1.7 percent in 2008 to 3 percent in 2009, MSU students default at a lower rate than the state and national average.

That knowledge can’t be an excuse for complacency, though. Spartan students have to remain cognizant of their futures when making financial commitments.