Life after college: Students in debt over $10,000 on average

Brooke Randle
Contributor
brandle@unca.edu

As tuition rates and student debt continue to rise across the United States, many college students find themselves wondering if college is worth the price.

“I have nightmares about it. I get very scared thinking about it,” said 25-year-old Allie Steinhoff, a student who is preparing to take out loans for the first time.

On average, UNCA graduates accumulate $16,985 in debt, according to UNCA’s Financial Aid Office. Federal student loans allow a six-month grace period after graduation for students to locate a job and settle before beginning repayment.

According to College Board, a nonprofit organization researching trends in higher education, tuition at public four-year universities increased by 13 percent in the past five years. Although the latest increase is lower than in previous years, students still pay more for college today than ever before.

Elizabeth Porter, an economics lecturer at UNC Asheville, said rising tuition and the correlating debt is not because colleges simply charge more per year. The real reason students pay more today is due to nationwide budget cuts to education, which places more of the financial burden on students rather than taxpayers.

“It’s not that college is getting more expensive. What is happening is budgets are being cut across all of the states, which leads to more of the cost being shoved off onto students,” Porter said.

Jonathan Stansell, new program development director at OnTrack Financial Education & Counseling, said failing to pay student loans on time and within agreed-upon terms could lead to more than just bad credit.

“Having bad credit is one thing, who cares? What people don’t realize is that it affects so much more than getting a credit card or a new car,” Stansell said. “It can affect whether you can buy a house or not. Debt can even potentially shape the course of a person’s career.”

Stansell, who developed the student loan debt counseling program at OnTrack, said students who are most at risk of defaulting on loans tend to come from lower income backgrounds. However, student debt affects people of all demographics.

Stansell said many clients seek financial counseling after realizing they are unable to find a job with an income large enough to cover monthly payments.

“One of the things that I’ve learned is that a person can’t assume that their education will pay off their debt,” Stansell said.

Stansell said students considering taking out loans should pay close attention to which major they choose and if their field of study will be financially viable.

“I hate saying this because I love liberal arts education, I was a sociology major, but I think it’s important to think about loans when picking out a major,” he said. “Sometimes you have to make a choice based on the fact that you have to make a living when you’re done.”

Chris Bell, chair and associate professor of economics at UNCA, said the concern over student loan debt is inflated by the media.

“I think ‘crisis’ is thrown around a lot by journalists without there really being a crisis,” Bell said. “There are a lot of students who have made some bad decisions about piling on debt and not choosing to go to a school that would be less.”

Bell said debt from a college education is similar to other kinds of long-term investments such as buying a house.

“Lifetime earnings are significantly higher for people with college degrees. That doesn’t mean it will be true for everybody. If you don’t play your cards right when you graduate, you could do not so well,” he said.

Despite the concern students may have over job availability, Bell said the economy and the job market is doing much better than how it is sometimes portrayed.

“You hear a lot about how horrible the economy is doing and for some people it’s not doing well, particularly those without a college degree,” he said. “It’s not weak right now, despite what you may hear from some politicians.”

Bell also said much of what contributes to student debt amounts to basic living expenses while attending school.

“Part of that debt that is piling up is from not working and going to school full-time instead. Part of that debt is what you’re paying to live for four, five, or six years,” he said. “It’s not like it doesn’t count, it’s real dollars, but people need to realize that when they think that they are only paying for their education.”

For Steinhoff, who is working toward a bachelor’s degree and plans to work as a physical therapist, taking out student loans appears to be the only way to continue her education.

“I’ve kind of accepted it at this point,” she said. “Where I am, waiting tables, I don’t really see very many opportunities for myself without getting a degree.”

Steinhoff said while nervous about the long-term implications of student loans, she feels ready to take the risk.

“It’s putting a lot of weight in a lot of hypotheticals, but I want financial stability. My parents never had that which has made it important to me when I’m planning ahead,” she said.

Steinhoff said taking out loans and accepting more responsibilities comes with getting older.

“I think that part of growing up is learning to be OK with debt.”

One thought on “Life after college: Students in debt over $10,000 on average

  • May 10, 2017 at 10:17 am
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