Rising costs, growing debt complicate students’ plans
- Sep. 12, 2012
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KU graduate Kathryn Unruh said she decided to go to graduate school during her sophomore year at KU, but she had no idea what that meant financially until recently.
“I spent quite a bit of time looking into the cost of living at the various schools I was applying to,” said Unruh, now a neuroscience graduate student at Vanderbilt University. “Figuring in transportation, whether the schools covered insurance, etc.”
Unruh only researched Ph.D. programs that were funded by a tuition and living stipend in order to make the cost more affordable. She receives a $26,500 yearly stipend from Vanderbilt, which covers tuition and living expenses. The stipend will allow her to complete graduate school without debt.
While Unruh is managing her graduate school costs, Lawrence Free State High School counselor Joel Frederick said most students entering undergraduate studies are unable to comprehend the cost of college.
“We can talk to them about it; I’m not sure a lot of them have a good understanding of it,” Frederick said. “None of them have bought mortgages, and very few would have credit cards with huge amounts of debt that they would understand credit.”
Frederick said high school students who eventually want to pursue professional degrees are considering community colleges as a way to offset costs. He also said that although many students are still able to attend college, their student loan debt will be much higher than it would have been in the past.
“The loan debt is getting worse and worse,” Frederick said. “There’s still scholarships out there, but scholarship money is not keeping up with the increases in tuition.”
A recent study by Fidelity Investments reported that only 31 percent of parents with college-bound children are realistically considering the total cost of college. The College Board’s Annual Survey of Colleges reveals the average tuition and fees of a four-year college with in-state tuition is roughly $8,244.
The average tuition and fees of the same school for an out-of-state student is $20,770.
The Fidelity study also shows, however, that families who calculate total costs are alleviating that burden by choosing less-expensive colleges, planning to rely more on financial aid and urging students to choose majors that promise more lucrative careers.
The studies are based on undergraduate tuition. Students who want to pursue a graduate degree have cost considerations in addition to undergraduate tuition. Average tuition and fees for graduate school is roughly $8,763 at public universities and $20,368 at private universities, according to the U.S. Department of Education. Graduate students accrued a total of $35 billion in debt in the 2010-2011 school year alone.
Pete Knutson, a financial planner with McDaniel Knutson Financial Partners, said students who are not financially prepared for college should consider spending more than four years in school.
“You’re better off, in my opinion, staying in college an extra couple years working your way through and chipping away at it so you can graduate with no debt,” Knutson said.
The Council of Graduate Schools reports that individuals with graduate degrees will be in higher demand during the next several years. Also, DailyFinance reports that the median salary for someone with an advanced degree is $13,000 higher than someone with only a bachelor’s degree. The biggest salary jump comes with an advanced degree in health and medical preparatory programs, where salaries can increase by as much as 190 percent.
Knutson said graduate school makes sense for students studying areas that will provide high salaries, such as law, engineering or medicine. For other less lucrative career paths, he said taking on any debt to pursue a master’s degree is not worth it.
“If you get a master’s in engineering, that’s different than a master’s in ceramics,” Knuston said. “I’m not sure that master’s degrees do as much as they used to, in the same way that college degrees don’t do as much as they used to.”
Average salary increases from an undergraduate degree to a law degree are nearly 81 percent, according to DailyFinance. Nonetheless, Steven Freedman, assistant director of admissions for the KU School of Law, said that nationally, law school applications have dropped dramatically, likely because of the cost.
“Many students are shying away from expensive private law schools because they are concerned about taking on excessive debt,” Freeman said. “For this reason, a number of students are choosing not to attend law school.”
Although KU is one of the few schools nationwide to see an increase in applications, Freeman said some students choose to attend cheaper schools or not to attend at all. First-year tuition at KU’s School of Law for the 2012-2013 school year totals $18,663 for residents and $31,474 for nonresidents.
High school students who plan to attend graduate or professional schools have special considerations when it comes to the costs of an undergraduate degree as well. With the cost of a four-year school up 15 percent from 2008 to 2010, students who aspire to higher degrees have to start planning financially.
Although she will graduate without debt, Unruh said, attending graduate school instead of getting a job has costs in the long run. After her first year, she will be required to work 40 or more hours a week in research labs or as a teaching assistant as a condition of her stipend from Vanderbilt, leaving no time for a part-time job or other source of income.
“I am so thankful that I won’t be in any debt when I graduate, but I also won’t be in a position where I have any sort of savings built up, which is absolutely concerning if I don’t find a job soon after I graduate,” Unruh said.
Lindsey is a junior from Overland Park studying journalism, political science and leadership. Read more from Lindsey Mayfield.