College student indebtedness is on the rise, admissions directors and students at Elon University share their opinions about college loans and student debt

By Cameron Saucier

Infographic by TICAS.org. Reproduced under TICAS' creative commons license.

Infographic by the Institute for College Access and Success. Reproduced under TICAS’ creative commons license.

In 2014, an estimated 1.8 million college students will receive their bachelors degrees. But for many of these students, a bachelors degree isn’t all they obtain after graduation. They are also awarded a hefty receipt for all of their student loans. College debt has become an increasingly prevalent force in the lives of many college graduates – and it’s not getting better.

According to a new report released by the Institute for College Access and Success (TICAS), debt has increased an average of 6 percent each year from 2008 to 2012. The data from the report was derived from the federal government from an annual voluntary survey.

TICAS report reflects a wide variation in student debt across selective states. Graphs compiled by TICAS.

TICAS report reflects a wide variation in student debt across selective states. Graphs compiled by TICAS.

The report says U.S. debt averages varied depending upon geographic location. Generally, the Northeast and Midwest were areas of the most concentrated student debt. New Hampshire and Delaware remain two of the highest-debt states in the nation.  Conversely, lower-debt states tended to be located in the West and South, with New Mexico and California being two of the lowest debt states in the country.

But students aren’t the only ones dealing with debt. The report is concerning for many colleges, especially considering the impact the most recent recession has had on college budgets.  As costs for running and expanding college institutions increase, many universities are forced to raise their student tuition.

Student debt in North Carolina compared with other selective U.S. states. Infographic by Cameron Saucier

Student debt in North Carolina compared with other selective U.S. states. Infographic by Cameron Saucier

Elon University, a private college located in North Carolina, is one of many universities in the nation trying to address student debt post-graduation. According to Greg Zaiser, vice president of admissions and financial planning, Elon’s debt average for post-graduates is around $23,000. But the Project on Student Debt, a sister organization of TICAS, says the average debt of Elon’s graduates in 2012 was $28,183. That’s nearly 15 percent higher than North Carolina’s state average, which sits at $23,893.

But Zaiser said that Elon has many programs in place to help students pay for tuition, like the university’s work-study program. Elon gives students the opportunity to work at a part-time, on-campus job, earning money that can be directly applied to their college loans.

“I think that’s what colleges need to do,” said Zaiser. “They need to find creative ways to address student indebtedness. Our work-study program is one of those opportunities.”

Elon’s endowment is currently $172 million and has grown even during the recession – a trend that most private universities can’t claim.  While this seems like a lot of money on the surface, most of it covers school maintenance and expansion, said Zaiser. According to him, Elon has a large donor-base that allows it to stay up and running, while also providing students need and merit-based financial aid.

Patrick Murphy, Elon’s director of financial planning, believes that the debt students accumulate at college is worth every penny.

“Students are getting an education here that’s allowing them to be employed after college,” said Murphy.

Zaiser reflected Murphy’s belief in the importance of a college degree, but as a parent of an upcoming high school graduate, his statements were more vehement.

“In this day and age,” said Zaiser, “college is an investment in the future. The benefit will outweigh the cost of college indebtedness in the long-term.”

Still, Murphy admits that many students may not recognize just what they’re agreeing to when they take out a student loan.

“It’s amazing how many students will get a loan,” he said, “but realize it must be paid after they graduate.”

Murphy counsels John Bowden, a senior at Elon, about paying of his federal loans after graduation. Photo by Cameron Saucier

Murphy counsels John Bowden, a senior at Elon, about paying off his federal loans after graduation. Photo by Cameron Saucier

According to Murphy, Elon offers exit counseling to graduates, which will help them to prepare for dealing with their loans. The first thing students need to do is to be in touch with the lender, said Murphy. If it’s a federal loan, the government can offer forbearance, he said. The government extends an Income-Based Repayment option to students, which spreads loans over a 20 year period. The option is an effort by the government to reduce student default rates, which is currently 13 percent.

But many loan-recieving students at Elon are not blind to the debt they’ll face post-graduation.

Heather Harder, a senior at Elon, is taking a course about financial responsibility to prepare herself for budgeting once she graduates.

“I think that having debt after college makes you make smarter decisions,” said Harder. “From other seniors I’ve talked to, it seems like Elon’s student population is more knowledgable about student loans.”

Andrew Creech, a junior at Elon, wouldn’t be able to attend the university if it wasn’t for federal loans. Creech said he is already preparing to budget to compensate for his large debt after college.

“I’ve borrowed about $60,000,” said Creech. “I’m just trying to make sure I have a good job lined up after college. I’ll have to start repaying my loans 6 months after graduation.”

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