The Future of Student Debt: rocky or rosy?

My main objective in pulling all of these young people together with this forum was to show a wide array of financial situations that face students and recently graduated individuals. The gap between those graduating with no debt and those graduating with the average student debt is astounding. Students I have talked to that are graduating with little or no student debt seem to be more positive and excited about the future ahead. Those that face debt are more focused on their financial situation than their goals and dreams.

Student debt due to loans is an ever-increasing burden. In fact, data gathered from the Project on Student Loan Debt showed that at Ohio University, debt increased by about $4,100 from 2001-2005. The state of Ohio is number 15 on the list of the highest average student debt and is number 10 on the list of the highest average student debt for the graduating class of 2005 from public universities. Overall, this is a great site to get both general and specific data from a source that upholds goals to increase public understanding of the trend of borrowing as the primary way to pay for higher education. Their mission also states:

“The Project's goal is to identify cost-effective solutions that expand educational opportunity, protect family financial security, and advance economic competitiveness (The Project on Student Loan Debt).”

There are several interesting articles in the site including “The Debt Dilemma” and “How Much Debt is Too Much?” A survey about America’s call for relief from rising student debt gives great information on public opinion of the subject and provides a thorough executive summary and descriptive graphs and charts that sum up the information. The site also provides links to great related articles from USA Today, the San Francisco Chronicle, the Chicago Sun-Times and many others, and it also provides interesting testimonials from a variety of people in their “voices” section. The interactive map of the U.S. allows viewers to click on the different states and find the school of their choice to discover information on the average debt of students graduating from the school, the proportion of graduates with debt, and other analysis.

This site will be helpful to those of you with questions concerning debt and those of you that wish to commiserate with the many others out there struggling with debt – YOU ARE NOT ALONE. When talking to people about the issues surrounding student loan debt, many discussed the fact that it is a sort-of hushed subject. I think that because there are such a variety of situations that students must deal with, it can become a touchy and avoided topic. In a posted comment I received, a viewer explained that many people are “tip-toeing around the subject,” thinking that by avoiding it, it will go away. Well, it’s not going to go away, and in fact, it is seemingly getting worse.

A concern of mine that came up while talking to students about debt issues was the way in which some students choose to use their student loans. I have been wondering if it is smart to use my student loans to pay for my trip to Wales next fall. I talked myself into it after rationalizing the fact that I would be getting class credit and a great learning experience out of the opportunity. After discussions with my fellow student loan debtors, my stress was relieved after considering what they were spending their “leftovers” on. Some were using it to make extravagant purchases or take exotic vacations. Actually, a commenter remarked that some of her friends had taken student loans out to pay for a lavish spring break to the Bahamas last year, and plans to use the money this year to go to Acapulco.

Despite the not-so-smart decisions that some students decide to make with their loan money, the fact remains that the increase in student debt is due to the fact that in order to pay for higher education, most students must take out loans.

Who knows what the future will be for student debt, but we can surely hope that it will look a little better for those following the path of education. Things may be changing really soon considering the recent Democratic capture of the House.

Bethany McLean, author of the article “Dems: make student loans student friendly” that I found today on CNNMoney.com, discussed how the companies that have made money in education had good friends in Congress. She explained that this may change under the Democrats. The article quotes:

“Change is indisputably part of the Democratic agenda. George Miller (D-California), who is likely to become the new chairman of the House Committee on Education and the Workforce, wants to cut interest rates on student loans in half. Cost is a major culprit. Tuition has grown at double digits for more than a decade, and federal aid has not kept up, resulting in often crippling levels of student debt… As a blogger using the name ‘collegedebt4life’ writes, ‘We went into debt to get an education so that we could get good jobs, and we find that we have mortgaged away the rest of our lives by taking out student loans (CNNMoney.com).’"

We can only hope to see some changes for students having to embrace increasing debt along with their prized education. With everything in mind, my question becomes – “Do we want to be a society that obligates its bright youth with decades of debt in exchange for higher education?” If your answer is yes, then it can only paint a dreary picture for the future of America.

Till Debt Do They Part
NAME: Tiffany (Thompson) Elliot
AGE: 20
GRADE: Junior
MAJOR: History
GRADUATION: unknown
DEBT UPON GRADUATION: $30,000+


I met Tiffany my freshman year of college and we quickly became close friends. It seems like one day we were painting our toe nails and giggling over a gallon of ice cream, and the next, I was watching her walk down the isle – the wedding isle that is.

A couple weeks ago, when most Ohio University students were pulling on their costumes, Tiffany was slipping into a wedding dress. However, this was not Tiffany’s Halloween costume; it was a rite of passage, a giant leap into the rest of her life. She and her new husband Eric aren’t jumping alone though; they have their good friends, debt and loans, to accompany them.

Tiffany has worked most of her short life, sometimes with two or three jobs at a time. This wasn’t enough to keep her at Ohio University. In one year here at school, Tiffany accumulated $14,000 worth in student loan debt. Unlike many students, she took on school expenses all by herself. When she decided that she could no longer afford staying in Athens, she packed up and moved back to her hometown where she began to attend Shawnee State using her own bank account. Aside from school, she paid for her apartment, the utilities, the furnishings, her cell phone bills, car payments and insurance and any other extra expenses to keep her going.

On top of everything else, Tiffany planned and paid for part of her wedding. Her new husband Eric is in the Navy and had been out of the state the entire time she was planning. He was able to come home for 16 days when they got married and is now in California, where Tiffany will be moving in nine short days. Not only will she be carrying the debt with her, but she will be facing it without the comfort of her family or friends. She will be picking up the expenses of shipping stuff out to her new home and Eric is busy setting up house for her arrival.

Tiffany does not have a job waiting for her, but she plans to continue school in California while she looks. The situation looks uncomfortable, but she is confident that things will work out. With her attitude, I know they will make it. Tiffany is excited to be stepping foot out into a new life, but like most newly weds she is nervous about their financial situation. Student loan debt is just another thing to add to their long line of things to worry about.

Eric and Tiffany know that it will be a while before they can say they are comfortable financially, but their positive outlook and willingness to make sacrifices and work hard to stay together will pay off in the end. Tiffany plans to pay off all of her student loans by herself and is looking forward to the day when her debt is paid so she can start a family.

For those of you that may find themselves in a situation similar to Eric and Tiffany, check out tips from an article called “Til debt do us part: financial tips for newly weds” that I found from a publication called Lifestyles Jet.

* The photo was taken by me at a Ohio University football game last fall.

The Bitter Graduate


NAME: Lauren Smith
AGE: 24
OCCUPATION: High School English Teacher
EARNED: Bachelor’s and Master’s in English Education
CURRENT DEBT: $30,000





Meet my sister, a 24-year-old high school teacher who can’t see a smidgeon of light at the end of the tunnel. When I asked her how long she thought it would take to pay back her loans, she simply said, “I’m on the whole-life plan.” Lauren has been a hard worker all of her life. I would know; I grew up with the over-achiever. She was actively involved in everything in high school and managed to get a 31 ACT score, a 4.2 G.P.A. and a measly $2000 a year in scholarships. I guess it doesn’t always pay to do well in high school.

While she plans to “make more money some day" so she can pay in larger chunks on her student loans, Lauren’s whole life plan consists of continuing to pay the minimum because “they are very low interest compared to other things she owes on.”

On the bright side, Lauren’s large debt doesn’t prevent her from obtaining things that she wants. She has decided to deal with creditors rather than the government.

“Creditors do not seem to care as long as I keep my good credit by making payments consistently on everything I owe on. I was told by a realtor that I could get approved for a large home loan in spite of my large amount of student debt,” she explained sarcastically.

Lauren is still paying on the same amount of debt that she racked up during graduate school. She makes just enough money now to keep from adding to her debt, but is not eliminating it. With her future plans in mind, it only seems that the black hole gets deeper. Now she is thinking about going back to school to be a lawyer.

“Student loans suck. When you see the amount you pay at the end of the year and how much of it actually goes toward the principal (instead of the interest), it is so depressing. I know my education wasn't a waste of money, but I feel ripped off. If it is in the best interest of the country to have educated students (and of course, it is), the government should think of alternative funding to provide students for their education.”

* The photo was taken by the "famous" Linda Smith (my mom) at my sister’s graduation from THE Ohio State University.

The Lucky One


NAME: Julianna Kaercher
AGE: 22
GRADE: Ohio University senior
MAJOR: Psychology
GRADUATION DATE: March 2007
DEBT UPON GRADUATION: ZERO



When I say lucky, I mean smart. Julie received a full-ride scholarship for receiving a 32 on her ACT – a shoe-in for a full-ride scholarship. Julie’s only financial burdens since she was admitted to the university have been room and board for her freshman and sophomore years and rent and extra expenses for her junior and senior years.

Julie has taken advantage of this great offering in a very positive way and actively involves herself in many groups and organizations. She is a member of Friends of Big Brothers, Big Sisters (she was president for the 2005-2006 school year), is the Athens’ Youth Recreation Volleyball coach for the fourth grade, a psychology 221 statistics tutor and is a member of PSI CHI (the national honors society in psychology).

If you can believe it, she also makes time to work as a Front Room employee at Ohio University’s Baker Center. She is also an intern at the Ohio Department of Transportation during the winter and summer intercessions. This sounds ludicrous considering the fact that she is not in any debt. However, she sees this as an opportunity to continue saving money, instead of spending what she saved over the years. This is something only very few students have the ability to do. Most students can only worry about all of the money they are going to owe, not what they can save.

Julie’s major concerns consist of gaining an education, making lifelong friends and making a difference in the world through volunteer activities. You may notice that the list considers nothing financially – me being bitter. That doesn’t mean that she hasn’t considered the fact that she is very fortunate to be in her situation.

“I just think student debt is ridiculous and I am thankful every day for the fact that I won’t be in it,” she said.

After graduation, Julie plans to either gain an invitation to serve in the Peace Corps starting summer 2007, or attend graduate school for a master's in art history, beginning fall 2007.

Does Julie see a bright future?

“I hope so! I definitely want to help others, and I know the Peace Corps will teach me to appreciate everything I have been given. I also hope to gain a successful career in art history; one where I can enjoy what I do for a living and also have time to help others. I see my future being very bright,” Julie said.

Like most students, Julie, who won’t even acquire any debt after graduation, knows what kind of a burden debt will be on her friends.

“I feel horrible for all my friends who will be tied down by loans post-graduation. I understand that the loans enabled them to gain a college education, but I think everyone should be entitled to a free education if they want to learn. Just because they did not get a high score on a test (the ACT) means nothing. Most of my friends had to shell out thousands of dollars, only to be charged interest that will lead one of my friends to actually pay twice as much as she borrowed. Just because you want to better your future, you have to go into debt, only to work twice as hard to come out of it, and with an education that may or may not get you a job that can pay the salary to get out of debt.”

* The photo is of Julie and her brother overseas (taken by anonymous person).

The Standard Student Situation


NAME: Hartley Mikus
AGE: 22
GRADE: Ohio University senior
MAJOR: Journalism/public relations
GRADUATION: March 2007
DEBT UPON GRADUATION: $9-$10,000




Hartley, a soon-to-be graduate of Ohio University, obtains a debt close to the national average of $15,000 for those graduating with a bachelor’s degree from a four-year public university (obtained from the American Council on Education). She would owe much more if she weren’t receiving scholarship assistance totaling about $1,500 a quarter. These include the Dean’s Scholarship, the Valedictorian Scholarship and the Anonymous Scholarship from the Scripps College of Communication. However, the university is denying her one-third of her hard-earned scholarship money this year because she is graduating early (another way to jip Hartley out of an earned chunk of money).

Hartley is not letting her college experience go to waste, however. She is very involved on campus. She is a Scripps Student Ambassador, is involved in PRSSA (she was president of the organization last year), is a member of ODK (a national leadership honor society for college students), as well as a few volunteer programs. She also has a couple jobs on campus – one at Ohio University Communications and Marketing and another as a fitness assistant at Ping Recreation Center. While she uses these job opportunities to improve her portfolio, she also needs the money for weekly living expenses.

Her parents are helping as much as they can – paying interest on her loans so she will only have flat fees to deal with after graduation. But, Hartley still has to deal with most of the weekly expenses. She pays for part of her tuition, all of her books, some of her living expenses, and any other odds and ends.

An excelling student and campus/community leader, Hartley still worries about securing a desirable job after she graduates and wonders if she will have the ability to pay her loans off before they accumulate too much interest.

After graduation, she plans to move where her first job is and begin her life in the real world. She wishes to obtain a corporate public relations job in the United States, but other than that, she is not limiting herself geographically.

So, amidst her debt, does Hartley foresee a bright future?

“I do, well I certainly hope I do anyway, otherwise what have I been doing the last few years,” she said.

“But in all seriousness, yes I do see a bright future. The first part of the future will probably be filled with Ramen and macaroni and cheese, but I am prepared to make the necessary sacrifices to have a more profitable career later down the road.”

Her general outlook on loans isn’t so peachy.

“I think more scholarships should be available for students who excel on the college level. I think serious debts and loans affect students for 10-20 years after they graduate. I am not looking forward to getting my first paycheck and immediately decreasing the figure by half to start the 'paying-back' process.”

* This photo was taken in Hartley’s house in Athens by a roommate.

Debt or Dead End

With senior year quickly approaching, it seems that greater concerns over matters of money are at the forefront of my thoughts. A significant reason for this distress is the looming presence of debt that is already over my head. It seems that more than ever I reflect and feel guilty about the purchases that I make. For instance, a few days ago my grocery bill added up to about $130, this past weekend alone I spent at least $100 to lend a good time to visiting friends and tonight I coughed up $100 for my utilities. It doesn't end there, however. According to me, I will be testing out the big city life this summer and will move from there to Cardiff Bay in Wales. My 18 week internship in Wales will cost me approximately $6,500 (not including food, air fare and other small trips). I don't even want to think about what it will cost me to possibly live in New York City - an arm, a leg, and probably my ability to buy food or breathe. Aside from my big plans, I currently owe the government $12,000 and will owe an estimated $20,000 after graduation. Hello, my name is Meryl, and I am a slave to money. Too bad for me, considering the fact that my outlook for big money in public relations is far down the road. According to the Public Relations Society of America Web site, the average entry level salary for a college graduate with a baccalaureate in public relations is about $18,000 to $22,000. However, I hardly have anything to complain about, in view of the fact that my parents owe $51,000 in loans because of my sister's and my education. By the time I graduate, that $51,000 will increase.

Out of curiosity, I wanted to talk to a loan officer at one of the local bank branches to figure out what it was like to acquire a student loan. After I was shot down three consecutive times, I decided that it was probably either a touchy subject or nobody wanted to waste their time talking to a journalism student about student loans. At the Ohio University Credit Union, the only response I received from the desk assistant was that they didn't deal with student loans and they discouraged students from taking out personal loans. So, my question is, "how are students supposed to pay for college?" The manager I talked to at Chase Bank threw an 800 number at me and told me to talk to them about it. Needless to say, I was getting nowhere.

In my reflection on how things had gone at the banks, I remembered a woman that I interviewed about a blog she is involved in called Creditslips. The blog discusses issues ranging from bankruptcy and consumerism to debt trading and student loans. In a recent entry she made, Deborah Thorne, an expert on bankruptcy and debt, and a sociology professor at Ohio University, talked about student loans and the idea that they are a modern form of slavery. She said to me, "The worry over student loans is burdening, it's ugly, it's frustrating and it is scary, but there is no other way." And isn't that the truth? I am over exaggerating when I say this, but the choice is to pay off student loans for most of your life or flip burgers at the local fast food joint. Not that working fast food is discrediting, but it's a dead end road and it's tough. So most of us choose college, we choose tuition, we choose student loans and we choose to be chained down by debt. For most of the student population, those four plus years cost us a lifetime. Thorne explained to me that this fear of debt is prevalent among most students getting ready to graduate. "They are frightened, and they probably should be," she explained. However, on the bright side, there are those lucky few that don't have to worry about debt upon graduation. I can imagine that they are feeling better about their decision to go to college. Thorne advised me to look at the difference between students that graduate with no debt compared to those graduating with an average of $20,000 of debt. On the one hand there is the student that sees a bright and fulfilling future that can afford health insurance, pay bills, buy a house and maybe even begin saving for their own children. The other end of the spectrum is dreary - the future for these students is burdensome. "Student loan debt is an ugly thing, probably the ugliest thing about college next to credit card debt," Thorne said.

In her recent post on student loans Thorne explained the common mind bind that students are in. "They (Thorne's students) described an increasingly common pickle -- there was no way that they could have attended college without the loans, and they are frightened that they will not be able to repay them, but they knew that without the college degree, their futures were beyond bleak. To say they feel between a rock and a hard place would be an understatement (Creditslips.org)."

Thorne went on to explain her trouble with student loans as she is having to postpone her retirement because the money that should be going to her 401K is going to Sallie Mae, the nation's leading provider of student loans. "I don't regret my education; however, I am discouraged and disgusted by the amount of student loan debt with which so many of our young people must graduate college. I would argue that these student loans are the modern day version of indentured servitude (Creditslips.org)."

To live in a society that puts such a heavy burden on the people contributing to the future is discouraging and downright frustrating. With that, I must end before I get violent.

* The photo was taken by me. I borrowed a couple dollars from my roommate (because I didn’t have any money in my wallet – go figure). I manipulated the shot in a program called HP Image Zone.

Upcoming entries: I will be talking with students about their financial situations and what they are to expect in their future. Some of the interviews were done in person and the others were done through E-mail.