It’s payback time – As student debt climbs, number of good jobs drops
By Emery Cowan
Tse Chi “Chad” Yen will graduate from Fort Lewis College this December with a degree in psychology and a promising job prospect at a nonprofit in Denver. Yen acknowledges he is in a better place than many in this struggling economy, but not without a cost: about $27,000 in student loans.
But without those loans and some scholarships, “I wouldn’t be here,” Yen said.
The most recent numbers show that college students around the country are taking on more debt in order to finish their degrees. College seniors who graduated with student loans in 2010 owed an average of $25,250 – up 5 percent from last year, according to a report released this month from the Project on Student Debt at the Institute for College Access & Success. At the same time, there are fewer and fewer good-paying jobs awaiting recent graduates:.
In 2010, the unemployment rate for all those with a bachelor’s degree was 4.3 percent, but for recent graduates, it was more than twice that – 9.1 percent, up from 8.7percent the previous year, according to the student debt report.
Upon graduation, a bill
With the lowest amount of student loans in the state, FLC graduates are in a better position than most of their Colorado peers, but that hasn’t sheltered the college’s graduates from a bitter job market.
The college’s career services offices get regular calls from alumni seeking job-search assistance, said Jill Kolodzne, a career services coordinator.
“They all say ‘I really should have used you (when I was in college),’” Kolodzne said.
Of the 61 percent of FLC students who have student loans, the average amount owed is $17,371. Statewide, 55 percent of college students have student loans, which average $22,017 per student.
Nationwide, student-loan amounts have climbed steadily over the last several years because college costs have outpaced family incomes and federal grant aid, said Lauren Asher, president of the Institute for College Access & Success.
The lower student debt at FLC likely boils down to its lower cost, said Mitch Davis, spokesman for the college. FLC has the fourth-lowest tuition in the state, has avoided raising nonresident tuition for the last three years and has increased the funding available for merit-based scholarships, Davis said.
Yet the cost of college add up beyond tuition. Native American students at FLC receive free tuition through a 100-year-old land-grant agreement with the state, but that hardly means they get through college debt-free. This year, 51 percent of Native American students carry at least one student loan, and those students borrow an average of $3,500 a year.
Amoretta Pringle receives free tuition through the waiver program, but the single mother of two still depends on federal student aid to cover student fees, books and some living costs. As a last resort, she also had to apply for a loan to cover other expenses such as rent, childcare and utilities because her eligibility for state assistance hasn’t kicked in. The interest rate of about 20 percent already starting to accrue, Pringle said.
“Once you graduate, it’s right at your front door, and you have to pay it back,” said Pringle, an accountingmajor.
Making education pay
In a recession, the demand for student aid and loans increases even more, said Asher, of the Project on Student Debt. More people flock to school to increase their training for the job market and at the same time have lower incomes, so more people need and qualify for aid, Asher said.
Also, families that might have counted on home equity, retirement savings or earnings to pay for their children’s education now need loans, Asher said.
For the increasing number of people whocarry debt, those outstanding loans factor into everything from decisions about buying a home and starting a family to pursuing additional education, Asher said.
The scary state of the economy also has shifted students’ approach to college, whether they have student loans or not, FLC’s Kolodzne said.
“More than ever, they’re questioning their major and did they pick the right major,” she said. “Now it’s ‘I go to college to get a better-paying job,’ not just to learn and be well-rounded,” she said.
The job market was a big factor when Paul Blick chose his major. Liberal arts majors have a tough time finding jobs in their area of expertise, so he chose computer science, said Blick, who will graduate this December. His line of thinking reflects one of a student whose college career has been defined by an economic recession.
“I chose computer science because even though job markets have collapsed,I feel I can still probably find a decent job in the field,” he said.
In a smaller town such as Durango, it is inherently harder to find a broad spectrum of career opportunities, said Roger Zalneraitis, executive director of the La Plata Economic Development Alliance. But despite common assumptions, there is a surprising number of job opportunities in the area, Zalneraitis said.
“It’s not like our companies are collapsing here,” he said, though it will take more effort from students, colleges and businesses to fill open positions with local graduates, Zalneraitis said.
In recent years, the value of internships here and elsewhere has increased as starting-level jobs become scarcer, Kolodzne said.
“Internships are the new entry level,” she said.
Yen did unpaid internships and other extracurricular activities throughout college to give him a boost in the job market. He took out the maximum amount of student loans and chose those unpaid activities over a job because the contacts and experiences would be worth it in the long run, he said.
“Do I regret it?” he said. “Not really.”
- $25,250: Average Debt Load For 2010 Graduates Hits Record High Amid Difficult Job Market (huffingtonpost.com)
- Not Just Wall Street: Protesters Should Target Colleges Over Student Debt, Tuition Increases (timesoftexas.com)
- 15 Surprising Side Effects of Rising College Costs (timesoftexas.com)
- The other student loan problem: too little debt (seattletimes.nwsource.com)
- Taking advantage of new student loan assistance (usatoday.com)
- Should we bail out student loans? (hotair.com)
- You: Average student loan debt of 2010 graduates up 5.2%, tops $25,000 (latimes.com)
- Analysis: Is student loan, education bubble next? (goerie.com)
- The other student loan problem: too little debt (sfgate.com)
- Everything You Need To Know About Oregon’s “Pay It Forward” College Program (leftandcenter.com)