Topic: A Good Education Isn't Cheap.... 

Aug 13, 2006 9:47 am US/Mountain

College Students Crushed By Debt, Federal Aid Lags

(AP) BOULDER, Colo. To avoid being crushed by his student-loan debt, University of Colorado doctoral student Mike Christoph has molded a lifestyle out of frugal choices.

Christoph stopped driving about four years ago when his car died after 247,000 miles. The 29-year-old has rented cheap apartments and until a bed was recently donated to him, he had been sleeping on sheets and blankets.

Still, with at least three years left in his education, Christoph has accumulated $33,000 in debt. That could easily double by the time he finishes school, but he would like to cap his loans at $45,000.

The latest round of college graduates are stacking record-high amounts of debt, and the proportion of students leaving college with unmanageable debt has skyrocketed since the early 1990s, statistics show.

In 2004, nearly 8 percent of graduating seniors carried student loans of $40,000 or more, according to the Project on Student Debt, a nonprofit advocacy group. That compares with 1.3 percent in 1993.

The effects that crushing debt will have on college graduates are wide-ranging, advocates for affordable education say. Some graduates will be discouraged from going into education and public-service fields because their salaries won't be high enough to offset their loan payments. Some will still be paying off their debt when they should be saving for their children's education. Others won't be able to afford to buy a house or car.

There are several factors driving the student-debt dilemma. But simply put, experts say the cost of higher education has continued to climb and financial aid isn't keeping pace.

The weight of Christoph's looming loan payments could have been heavier, but he made a concerted effort to finish his undergraduate degree at Tennessee Technological University debt-free by earning money waiting tables and renting a small room for $87 a month.

His hefty loans came later, when he began pursuing a master's degree in music performance at the University of Arizona.

More than half of the students who earned master's degrees in 2003-04 graduated with federal loan debt that they racked up as undergraduates or graduate students, according to the American Council on Education. The average debt for master's students from public universities was $26,119, translating to $304 monthly loan payments, according to the council.

Christoph worked as a teaching assistant while he was in Arizona, and that paid for some of his tuition. Over two years, he took out about $17,500 in subsidized Stafford loans to pay for his other living costs.

Then, when he began looking to enroll in doctoral programs, he found out he needed to replace his 20-year-old bassoon in order to be competitive. The instrument will cost more than a new car.

"There were a couple of programs that basically told me flat out, 'We can't accept you until you buy a new instrument."'

He said he was told the bassoon he's had since middle school wasn't top-notch and was holding him back from his playing ability.

Christoph has taken out a second round of loans as he saves up to buy the instrument, which he expects will cost $30,000.

"It's a pretty significant investment for a guy who doesn't have a career," he said. "It took me from having significant debt to having extreme debt."

One rewarding statistic comes from the U.S. Census Bureau. It says that college graduates, on average, will earn $1 million more during their lifetime than those without degrees.

All Christoph says he's hoping for after he gets out of school is a comfortable lifestyle.

"I don't want a big house," he said. "I don't want a fancy car. But I would like some health insurance."

College costs nationally have increased 40 percent at four-year public colleges since 2001, but federal aid has not kept up.

Pell Grants -- the most common form of financial aid for low-income students -- have not been increased since 2003, when the maximum grant was set at $4,050 a year.

"The government's investment in higher education has not kept pace with actual costs, which has left students and their families to bear a larger share," said Lauren Asher, associate director of The Project on Student Debt.

"Since most families can't afford to pay cash up front for the full cost of education -- which, in addition to tuition and fees, includes books, rent, food and other necessities -- borrowing has become more necessary."

Kristin Grabarek, who works for the Colorado Public Interest Group as an organizer on the Boulder campus, said the students she has worked with don't seem to worry about taking out large loans while they are in school.

"A lot of them assume that they'll have $60,000 salaries out of college," Grabarek said.

But when they graduate, begin looking for jobs and find out that starting salaries can be modest, the reality of their payments sinks in, Grabarek said.

Student-loan debt is rising faster than the cost of living and health care costs, according to a study released last month by the interest group.

Between 1993 and 2004, the average debt for graduating college seniors with loans increased by 107 percent to $19,200, the study says. At the same time, in the Denver-Boulder area, the cost of living increased by 38 percent.

Lindsay Booth, a 21-year-old CU student from Pueblo, expects she will graduate with a higher-than-average debt load.

Before settling on environmental studies as a major, she declared biology. Then political science. Then art history. Somewhere in between she picked up and dropped a minor.

She amassed $15,000 in debt coming out of her junior year and expects that by the time she graduates in 2008 she will have up to $30,000 in student loans to repay.

"It is scary to start your life with that much debt," she said.

Booth works part time at food stations in the University Memorial Center during the school year, and full time during the summer so she can pay rent without taking out additional loans.

"I think it's starting to become more of a reality the closer I get to getting out of school," she said.

The reality of student-loan debt has already arrived for Boulder resident Jeremy Neufeld, 26, who graduated four years ago from Grinnell College in Iowa.

Neufeld now works as a fundraiser for an environmental group, and he expects to finish paying off his student loans before his 30th birthday. He is repaying $150 a month and says the debt has delayed him from buying a house or car or making any other significant investments.

"The shadow is always there," he said. "It's always something I have to think about. I can't neglect it."

Paul Barrett
   -Principal Bassoonist, Honolulu Symphony
    -Lecturer in Bassoon, University of Hawaii