Pros & Cons of Joining Greek Life

When college freshmen step foot on campus, they may go to an activity fair and see members of sororities and fraternities encouraging recruits to join. They might want to know that becoming part of Greek life can have its upsides and downsides.

Whether or not students decide to let their Greek flag fly depends on their personality, their specific situation, and their goals while they are in school. Some may find Greek life incredibly enriching, and others could decide it’s a waste of their time.

By learning what Greek life is all about, students can add that decision to their freshman checklist for the new year.

What Is Greek Life in College?

Greek life is made up of communities of students who live together, volunteer for different organizations, pursue networking opportunities, and much more. The communities consist of sororities for women and fraternities for men.

Sororities and fraternities may have various objectives, but overall they exist so that students can make meaningful connections with one another, develop leadership skills, and give back.

More than 10% of college students are members of sororities and fraternities, and these societies have 10 million-plus alumni members, according to StateUniversity.com.

Students who are interested in becoming members must apply and then go through an initiation process. Once accepted, they will live with their sorority or fraternity, usually in a house on campus, and participate in activities like sports, dances, parties, and community service opportunities.

Sorority and fraternity names consist of two or three Greek letters, like Phi Kappa Theta, Sigma Pi, or Delta Zeta, a nod to the first U.S. Greek letter society, Phi Beta Kappa, founded in 1776 at the College of William and Mary as a literary, debating, and social club.

Many students only know about sororities and fraternities from pop culture references like “Revenge of the Nerds,” “Animal House,” “Legally Blonde,” and “Old School,” which depict a perennial party.

While that is certainly true in some instances—and fraternities have come under fire for their alcohol use and hazing rituals—Greek life can be much more meaningful and beneficial than these portrayals.

Upsides of Greek Life

It isn’t all shenanigans and keggers, and maybe not even a drop in some frats and sororities. Here are some perks.

Friends

When new students first get to college, they may not know where to turn to make connections. If they become part of a sorority or fraternity, they could make many new friends right away, bond with them through different activities and social events, and remain friends for life.

Networking Opportunities

Students will also have the chance to network with their new peers. When they’re searching for internships or jobs, these connections can prove to be highly valuable.

Plus, if a job hunter lists their sorority or fraternity on a resume and a recruiter is a Greek life alumnus, that could open up a conversation and make a candidate stand out.

Possibly Cheaper Housing

Living in college dorms can be incredibly pricey. The price of room and board at public schools approaches $9,000 on average, and tops $10,000 at private schools, according to MyCollegeGuide.org.

If students are sharing a house with many members of a sorority or fraternity, they could save money.

They may also save money by having access to a full kitchen, where they can make meals instead of purchasing a meal plan or eating at restaurants all the time.

Development of Leadership Skills

Sororities and fraternities need leaders who will come up with ideas for activities, pilot volunteering efforts, and recruit members.

If members step up and decide they want to become leaders, then they are taking on new responsibilities and developing crucial skills that will be valuable when they graduate from college and start to look for jobs.

Volunteering Opportunities

Fraternities and sororities are focused on philanthropy.

Students can participate in different volunteer projects with their fellow Greek life members and contribute to making the world a better place.

Not to mention, this will look good on a resume because it shows that a student is passionate about certain causes and wants to do their part to improve the lives of others.

Potential Downsides of Greek Life

Like a toga, Greek life isn’t a good look for everyone. Here are some possible cons.

Cost

Joining a fraternity or sorority could cost thousands of dollars , and monthly dues can range from $20 to more than $200.

Local and national chapter fees are not always covered in the regular monthly dues.

And if fraternities or sororities get into trouble, members could be fined as well.

Reputation

Fraternities and sororities have gotten a bad rap from movies and TV.

Worse, students have died in hazing accidents throughout the years, leading colleges to take administrative action against fraternities especially.

Some fraternities and sororities do emphasize parties and drinking, which is all fun and games until someone begins to flunk out, becomes addicted, is involved in an assault, or is injured.

It’s best, of course, to socialize responsibly and always make academic studies the priority.

Time Commitment

Because Greek life involves so many events, and members are expected to participate, joining a sorority or fraternity means a huge time commitment.

Spending too much time on Greek life activities and not enough on studying or working at internships could have a negative impact on a student’s future.

Determining Whether or Not to Join Greek Life

Joining a fraternity or a sorority can be a great decision, especially for freshmen who may not know anyone on campus. If they are a part of Greek life, then they will stay busy, make friends, network, and contribute.

On the flipside, if they are in a campus family that is constantly throwing parties and not interested in enriching members’ lives in a meaningful way, then joining wouldn’t be a good idea.

If students don’t have the money to join or are scrambling to pay for college in general, then that’s another issue.

A private student loan can fill the gaps in the cost of attendance. Interest rates, repayment plans, and fees vary by lender. It’s best to shop around and compare.

The Takeaway

A sorority or fraternity can provide camaraderie and enduring connections, and enhance a call for service and leadership. It can also be time consuming, expensive, and distracting. Greek life isn’t for everyone, but some will find it a life-changing college choice.

Look into a no-fee private student loan from SoFi.



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Deferment and Forbearance of Student Loans

Deferment and Forbearance of Student Loans – SmartAsset

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Deferment and forbearance are options that people struggling to keep up with their student loans can use to make sure they don’t get into serious trouble. Falling behind on your payments can hurt your credit or lead your lenders to garnish your wages, neither of which outcomes anyone wants. If you are struggling with loan payments, a financial advisor may be able to help.

Deferment and Forbearance Defined

Both deferment and forbearance allow you to temporarily stop making payments or reduce your payments on your student loans without causing you to fall behind on what you owe. However, each program differs in the type of relief it provides.

Even though both allow you to halt or reduce your student loan payments, you may not be responsible for interest that accrues during deferment. This depends on the type of loan you have and if it’s subsidized or unsubsidized:

Interest Responsibility for Deferment
– Direct Subsidized Loans
– Subsidized Federal Stafford Loans
– Federal Perkins Loans
– The subsidized portion of Direct Consolidation Loans
– The subsidized portion of Federal Family Education Loans (FFEL) Consolidation Loans
– Direct Unsubsidized Loans
– Unsubsidized Federal Stafford Loans
– Direct PLUS Loans
– FFEL PLUS Loans
– The unsubsidized portion of FFEL and Direct Consolidation Loans

In forbearance, you’re on the hook for the interest that accrues on any type of loan while you aren’t making payments.

Interest that accrues during deferment and forbearance can be capitalized, or added to your principal balance, or you can pay it off as it accrues. If you have it added to your principal balance, the total amount you owe and your monthly payments may cost more. This means it could take you longer to pay back your loans.

Deferment Eligibility Requirements

To qualify for deferment, you’ll need to meet a few requirements.

  • You’re enrolled at least part-time and you’ve received a Direct PLUS loan or FFEL PLUS loan as a graduate or professional student. Deferment is allowed for an extra six months after you’ve dropped below half-time enrollment.
  • You are a parent who received a Direct PLUS loan or FFEL loan on behalf of a student who meets the above requirement.
  • You’re enrolled in an approved graduate fellowship program.
  • You are enrolled in an approved rehab training program for the disabled.
  • You’re unemployed or not able to find full-time work for up to three years.
  • You are going through an economic hardship for up to three years.
  • You’re in the Peace Corps for up to three years.
  • You are on active duty military service. Deferment is also allowed up to 13 months following that service or until you return to college or a qualifying school at least half-time (whichever is sooner).

Remember that even if you qualify for deferment, you might still be on the hook to pay for the interest that adds up during that deferment period, depending on the type of loan.

Forbearance Eligibility Requirements

If you’re exploring forbearance as an option, there are two different types: general and mandatory.

General forbearance is available if you’re experiencing problems affording your basic needs or medical expenses. It may also be available if you’ve had a recent change in employment. It may be wise to talk to your loan provider to see if your specific situation qualifies you for forbearance.

On the other hand, only Direct and FFEL loans qualify for mandatory forbearance. It becomes available if:

  • You’re serving a medical or dental internship or residency program.
  • The total amount you owe each month for all your loans is 20% or more of your total monthly gross income (available up to three years, and qualifies on Perkins loans, too).
  • You’re serving in AmeriCorps and received a national service award.
  • Your current teaching status would qualify you for teacher loan forgiveness.
  • You qualify for partial repayment through the U.S. Department of Defense Student Loan Repayment Program.
  • You’re a member of the National Guard, but not eligible for military deferment.

Both general and mandatory forbearance can be granted for up to 12 months at a time. If you have a Perkins loan, you have a three-year cumulative limit for general forbearance. Direct and FFEL loans don’t have the same limitation, but your loan provider may have its own limitations.

Since there is a 12-month term, you’ll need to apply for forbearance each time you need it. Some loan providers may set a maximum limit on how many times you can receive general forbearance, but mandatory forbearance doesn’t have the same restrictions.

Deferment and Forbearance Alternatives

If you don’t qualify for deferment or forbearance, you may be able to access other debt assistance programs, such as:

  • Income-Driven Repayment (IDR) Plans – These are federal student loan repayment plans that are based on your monthly income and family size. There are four IDR plans for which you may qualify.
  • Direct Consolidation Loan – This option allows you to combine all your federal student loans into one loan. You’ll have one monthly payment rather than many different payments spread out across different loans. You may get a lower monthly payment because your new loan terms can be up to 30 years, rather than the standard 10-year repayment term.
  • Refinance – Refinancing is when you take out one new loan, pay all your outstanding loans, and then make one monthly payment to your new lender. You can refinance both federal and private student loans. Your new interest rate is based on your creditworthiness, so if you don’t have excellent credit, you could end up paying more in interest than if you didn’t refinance. Before refinancing, compare lenders to see if they offer benefits best for you.

Bottom Line

Falling behind on student loan payments can hurt your financial future for years to come. You may be able to avoid this, though, by using deferment or forbearance to hit the pause button on your payments. While these programs are meant to help you, interest may still add up while you’re not making payments, which can potentially raise the cost of your payments down the road.

To find out if you qualify for either deferment or forbearance, you’ll need to submit a request on the U.S. Department of Education’s website. Your specific financial situation will dictate which choice is best for you. Most requests have their own unique form to complete, meaning there is no form for both deferment and forbearance.

Tips for Paying Back Student Loans

  • If you’re not sure of the best strategy for paying back your student loans, consider working with a financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • It may sometimes seem as if your student loan payments will never end. A good start is to pay more than the minimum monthly payment every month, which will pay off the loan faster and save you money in the long run.

Photo credit: ©iStock.com/zimmytws, ©iStock.com/Anchiy, ©iStock.com/MonthiraYodtiwong

Dori Zinn Dori Zinn has been covering personal finance for nearly a decade. Her writing has appeared in Wirecutter, Quartz, Bankrate, Credit Karma, Huffington Post and other publications. She previously worked as a staff writer at Student Loan Hero. Zinn is a past president of the Florida chapter of the Society of Professional Journalists and won the national organization’s “Chapter of the Year” award two years in a row while she was head of the chapter. She graduated with a bachelor’s degree from Florida Atlantic University and currently lives in South Florida.
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Should You Roll Your Student Loan Debt Into Your Mortgage?

More and more students have student loan debt, and their total debt is larger and takes longer to pay off than ever before.

An enterprising person may wonder if it’s worthwhile to roll that student loan debt into a mortgage.

While doing so may feel like a good idea when you’re caught in the strangle-hold of student loan debt, there are pros and cons to doing this.

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student loan debt into your mortgage may not always be the best choice, it may be in your best interest to refinance or consolidate your student loans, using a reputable student loan refinancing company. Here are some of the best ones that we’ve found.

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New Student Loan Models Attract Borrowers & Investors

August 21, 2014 &• min read by Mitchell D. Weiss Comments 0 Comments

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It was bound to happen.

So-called alternative financing sources for student loans have been popping up all over the place. Some take a peer-to-peer (P2P) approach, where individuals with a few bucks to spare and hopes of a better-than-market return lend to others who are looking for a good deal on a loan.

P2P companies serve as matchmakers of sorts. The firms pair pre-screened applicants with investors who set the credit and pricing ground rules for the loans they’re eager to make. The fees that the P2Ps earn may come from arranging the match and babysitting (servicing) the offspring (loans) over time.

The more traditional alternative lenders are somewhat less paternalistic.

A number of high-powered professional investment companies—including private equity and hedge fund firms—are backing a string of nonbank lending operations that are busy staking out market positions in a variety of business sectors.

Higher education is one of these.

The reason for the interest is obvious: More than $1 trillion worth of student loans, a portion of which will make its way into the private market at some point. For example, some borrowers may require additional financing after maxing out the amount they can get from federal programs. Others may need to combine and refinance their government and private student loan debt later on.

What’s less obvious is the lenders’ control over the selection process, and the fact that even if a bad deal were to slip through anyway, all student loans—government and private alike—continue to be virtually impossible to discharge in bankruptcy.

The selection process is attracting a bit of attention these days. Some lenders are seeking to improve upon their already good repayment odds by exclusively marketing to those students who are pursuing historically high-paying areas of study at premier colleges and universities. As for the rest, their rates are typically higher and their loans may need to be co-signed by deep-pocketed parents or other close relatives.

To paraphrase Orwell, all students are equal, but some are more equal than others.

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Meantime, there’s news that the first of these alternatively-originated loans are ending up in securitizations.

Fundamentally speaking, this form of structured finance serves two key purposes: It broadens lending capacity by recycling previously originated loans, thereby freeing up the lenders to grant new credit. It also locks in the originating lender’s profit, which is typically expressed in terms of the difference between the interest rates that borrowers are charged and those that are paid to investors to whom the loans are ultimately sold through one of these complex transactions.

The integrity of the investors’ rate of return depends on three things: an originally agreed-to payment stream that will not change, a loan value that can be expected to amortize as it was intended and a repayment term that will also remain intact.

Reduce the payment amount, forgive a portion of the loan value or extend the duration and the investor’s rate of return could get hammered—which explains the strong reluctance on the part of their agents (loan servicers) to meaningfully restructure or permanently modify securitized loans for distressed borrowers, whether for home mortgages or education debt.

So, as securitizations and other forms of structured-finance transactions begin to crank up in the education-loan sector, what should be done differently this time around?

As long as Congress continues to do nothing about the free pass in bankruptcy court that education lenders and investors enjoy today (including the feds), lawmakers should, at the very least, mandate two things.

First, that the governing documentation for all after-the-fact financing transactions (securitizations, in particular) makes it clear to all concerned that troubled debts will be promptly restructured or modified in a manner that is consistent with the student-loan relief programs the government has in place at the time.

Second, that everyone that’s involved in this financial conga-line — lenders, investors and loan servicers alike — will be held equally accountable for that as well.

More on Student Loans:

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

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Should You Make Payments During Coronavirus Student Loan Deferment?

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