Study shows sharp increase in student debt
- Oct. 2, 2012
- 2 Comments
For many students, the hardest part of college may not be studying for tests or acing a research paper but simply graduating without a mountain of debt to pay off, as revealed in a Pew Research Center study released last week.
According to the findings, one in five U.S. households owed student debt in 2010, a number that has more than doubled in the past 10 years and has jumped 4 percent since 2007. The study also shows that almost all students who attend four-year universities graduate with debt, in average ranging from $24,600 to $34,600 based on family income.
This study was no surprise to William Elliott III, an associate professor in the School of Welfare. Elliott released a paper this year about the burden of college costs. He said loans have been making up a greater portion of student financial aid packages for the past 20 years, and parents are unable to contribute as much as they did before the Great Recession in 2008, especially in middle-income families.
Elliott said the high amounts of debt will continue to rise in the next several years.
“It’s a major problem for literally millions of Americans,” Elliott said. “It will continue to be a problem and weigh down our economy in the years to come.”
Noah Quinn, a peer educator with the University’s Student Money Management Services (SMMS), said that in 2009, 59 percent of KU graduates had student loan debt at an average of $20,500.
Jessica Montoya, a junior from Garden City, is the kind of student these findings reflect. Montoya expects that, by the time she graduates in 2014, she will be about $20,000 in debt, an amount she has tried to limit by taking on two jobs and creating a personal budget.
“My parents tell me, ‘Take what you need, don’t take extra,’” Montoya said. “I take the least amount of loans I can each semester, but so far I’m about $9,000 in debt.”
Montoya receives scholarships and grants through the University, and her parents pay her rent. However, she has worked at an on-campus job throughout her college career in order to finance her living expenses. This summer, Montoya tacked on another job and is now working 20 hours per week.
“I felt like I was living beyond my means,” Montoya said. “I hated taking money from my parents, and I wanted to be able to afford some more stuff on my own.”
In Elliott’s paper, “The College Cost Burden and the Role of Race, Income, and College Assets,” he reports that, as of 2006, about 70 percent of dependent students at four-year colleges had jobs. However, he said students should begin working and saving money at an earlier age to avoid debt.
This is what Corinne Westeman, a 2012 University graduate, did to fund entertainment expenses and pay for textbooks. Westeman began saving money in high school and continued working about 12 hours per week throughout her college career. To further offset costs, Westeman increased her credit hours per semester to graduate in three years with about $8,000 in student loan debt, which she will begin paying off this November.
Now, Westeman is living with her parents in Wichita and paying off the interest on her loans.
“This way, I can build up a little bit more money before I want to move out,” Westeman said. “I’m trying to do what I can to knock it all out.”
Although taking more credit hours to graduate early may not sound feasible or easy, Westeman said she is glad she made that decision.
“I miss KU a lot. I’ll certainly miss the experience of that fourth year,” she said. “But as far as finances go, yeah, it was worth it.”
As Elliot continues to research the costs of post-secondary education, he said the financial burden should shift from the individual student to the state and federal government. He said education benefits individuals and society as a whole, and funding children’s education should be a community effort as well.
“Colleges need to find ways to reduce costs, and community members could contribute to savings accounts or scholarship programs,” Elliott said. “The federal and state government needs to see college as a necessary investment in children’s lives, for the future of the child and the future of the country.”