Magazine article Black Issues in Higher Education Provides Convenient Way to Help Students Pay Down Loan Debt

Magazine article Black Issues in Higher Education Provides Convenient Way to Help Students Pay Down Loan Debt

Article excerpt

As students graduate this month with dreams of getting their first fulltime job, they will also have to grapple with the reality of huge debt incurred while pursuing a degree.

The average student attending a public university graduates with approximately $13,000 in debt, and private institution graduates incur about $16,000, according to the National Association of Student Financial Aid Administrators, but a new Internet company has created a service that might help ease the debt load., and its Bethesda, Md.-based founder, is billing the service as similar to those used for giving gifts to newlyweds.

It allows college and graduate students and even alumni to register their student loans online, thereby giving their families and friends the opportunity to pay off portions of those loans in the form of graduation, birthday and other gifts. If a friend or relative wants to help a new graduate, he or she would visit the Web site , type in the student's name, and the amount of the gift. Using a credit card, the money would be immediately credited to the student's account, and the recipient would get an electronic note informing him or her of the giver and amount of the gift. The student could later check with the bank holding the loan to be sure the payment was credited to the account.

"The debt-strapped young people are your godsons, nieces and your good friends' kids," says Adam Lloyd, founder of GradFree. "Do you want to get them another daily planner or pen set? Or do you want to get them a girl that really makes a difference?"

Lloyd, launched the site this year, investing roughly $70,000 in start-up fees. He advertised the service in campus newspapers at the 100 largest universities in the nation. He says GradFree will become the new norm, when it comes to giving graduation gifts.

"Graduates these days are starting life in a financial hole," Lloyd says. "With all the work and effort they put into earning their degrees, it seems unfair. I see GradFree as a way to assist both students and their families by providing a graduation gift which honors this momentous achievement."

But GradFree has its critics. Among them -- financial aid experts. Bernice Lindke, director of financial aid at Eastern Michigan University, says the site is a cool idea allowing family and friends to help pay down a loan, but the problem is the fee Lloyd is charging. …

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