HAVERFORD, PA – The borrower, the lender, and the payee have an interesting relationship, and certainly a dynamic one, but a relationship that is not necessarily symbiotic at every stage. That particular relationship, as it affects higher education in the United States, is no exception. Of the three parties in question, it is often the borrower who has the most to lose. But in the case of borrowers (i.e., students) at Haverford College in Pennsylvania, the Jaharis Family Foundation has come to the rescue.
A college requires its students to pay money – in the form of tuition and other expenses, such as room and board – which at Haverford averages close to $62,000 per year, the Philadelphia Inquirer reported. After four years, that’s almost a quarter of a million dollars, with interest compounded daily, which begins to accrue in some cases not after graduation, but as soon as the loan is disbursed.
Many students have no clue what daily compounded interest means, and so the “8%” they expected to pay back on the quarter million over 20 years, in their minds, is $20,000, which added to the $250,000 equals $270,000, divided over 240 monthly payments (12 months per year for 20 years), comes to $1125 per month. Granted, eleven hundred bucks a month is no walk in the park, but with any kind of job, it’s manageable. Except the amount owed per month is actually double that – because of that pesky compounded interest.
“You never told me that!” a student might complain to the bank (lender). In an indirect way, the bank’s response might be: “well, you never asked.” As for the college, it might, also not in so many words, say: “well, don’t look at us – we’re not the ones asking you for the money, the bank is. Besides, we told you about compounded interest before you graduated (albeit, in the final weeks of your senior year).
Quite a pickle for a recent graduate to be in.
But the $2 million the Jaharis Family Foundation has gifted to Haverford, as part of an overall $10 million bequest (the bulk of which will go toward a new music center), will help recent graduates who have not been able to find a job, and/or are not eligible for loan deferments, the Inquirer reported.
“Easing the burden of student debt will enable Haverford alumni to do more, for more people, in more ways,” Steven M. Jaharis told the Inquirer. Jaharis, a physician who practices medicine in Illinois, graduated from Haverford in 1982.