Des Moines Register
03-30-06
ISU students average $29,480 in debt
LISA LIVERMORE
REGISTER AMES BUREAU
Ames, Ia. — Bryan Holden , like many other Iowa State University students, grew
up on a farm in Iowa, took out loans to attend college, and works 20 to 30 hours
a week as a waiter to pay living expenses.
Students like Holden carry more debt into the world than their peers at four-year
schools nationally and at the University of Iowa and the University of Northern
Iowa, according new studies from an ISU student group and the most recent
Iowa Board of Regents data.
"Through life, I'll be constantly paying it off," Holden said, on break from a lunch
shift as a waiter at Hickory Park Restaurant. "All my money I'll be making to pay
bills."
ISU students are graduating with $13,600 more education-related debt than their
national peers, according to the latest study in student borrowing at the
university, to be released today.
One reason is that many students come from rural communities where the cash
assets for their parents are different, according to Warren Madden , vice
president for business and finance at ISU.
Most farm assets are land, which can't be converted to cash for school but still
shows up in financial aid calculations, thus pushing students to take more loans,
he said.
"It doesn't surprise me," said Tessa Bean , an ISU student. "I take out loans
myself to cover tuition and cost of living in Ames, which is ridiculous. From what
I've taken out, I'm already at about $12,000 to $13,000, and I'm only a
sophomore."
The findings, along with strategies to reduce student debt, will be discussed
today at a meeting among administrators and students.
"We are cognizant and concerned about the numbers," said Roberta Johnson ,
director of financial aid at ISU, where officials have encouraged parents to
consider putting some loans in their name. Student financial literacy has also
been an issue as financial aid leaders seek to educate students about their own
part in accumulating credit-card debt.
The study at ISU was conducted by ActivUs, a student government group that
started last fall with get-out-the vote campaigns. The group conducted the study
with the help of the Student Debt Alert, a campaign designed to raise awareness
about over-reliance on loans to pay for college. The campaign is supported by
the Institute for College Access and Success, and is part of the Partnership to
Reduce the Burden of Student Debt, an initiative of The Pew Charitable Trusts
with support from the Surdna Foundation.
The Student Debt Alert, located in Boston, has worked with student organizations
across the country to create similar surveys.
The consequence of the debt is that fewer students are choosing lower-paying
public interest careers, as they seek higher-paying jobs to pay off loans, said
Chris Lindstrom, higher education program director for the Public Interest
Research Group, which manages the student debt campaign.
She blames the debt on less federal and state aid, which results in higher tuition
and fees.
"Debt limits opportunity, which is counter to what higher education and affordable
and accessible higher education is supposed to be about," she said.
According to ISU financial aid officials, the average student debt after graduation
was $29,480 for 2004-05. That compares with $15,834 for 2003 graduates
among national four-year public institutions, according to ActivUs and the
Student Debt Alert.
At the U of I, the average debt for graduating seniors was $27,235; at UNI it was
$24,291, Iowa Board of Regents data shows.
Also, fewer students at ISU and UNI graduate without debt compared with their
national peers. According to a report released at the March Iowa Board of
Regents meeting, about 41 percent of graduating seniors in 2004-05 at the
University of Iowa graduated without debt, compared with 30 percent at ISU and
22.9 percent at the UNI. Nationally, the regents reported that 34 percent of
graduating seniors in 2003-04 were without debt.
Students said the cost of education puts a strain on their grades.
Bean, 20, also works as a waitress at Hickory Park in Ames and at the Iowa
State Foundation while she majors in communication studies and minors in
English.
Juggling priorities has caused her grades to slip this semester when she worked
two jobs, but she said she does it to cover tuition and living expenses.
"I'm really trying to focus more on my education as opposed to the debt I've got
piling up," Bean said.
Madden also pointed to personal lifestyle choices among ISU students, who
make decisions on how much they want to work and how much money they
spend on outside activities.
"Students who want to work can work," he said.
There are also several initiatives under way to create more scholarships for
students, including one program that will go into effect next year in which children
of ISU graduates from other states will get scholarships to get tuition costs down
to resident tuition rates, Madden said.
"Students who want to minimize debt loads do have options," he said.
You'll need a good job
According to FinAid, a student financial aid Web site, a college loan of $29,480
would cost about $339 per month to be paid off in 10 years. The Web site
estimates that a graduate with the loan will need an annual salary of at least
$40,711.20 to be able to afford to repay it.
Tips about debt for parents, students
Roberta Johnson , financial aid director at ISU, said she and members of her
department work to educate parents and students about debt.
HELP FROM PARENTS: "We are definitely trying to encourage the parents to
incur some additional responsibility for taking the loan as opposed to putting it in
the students' name," Johnson said. "If our students are overburdened with debt,
not only it will negatively impact the whole future, it may make students not want
to live on their own. A lot of parents are hoping students will be independent and
won't come back and live at home."
FINANCIAL AID: Students need to apply for financial aid. Johnson said many
students and parents incur debt because they never apply.
CREDIT CARDS: Students need to understand what they are paying on their
credit cards. "We have students who think, because the minimum balance is X,
they will stay out of trouble if that's all they pay," Johnson said. "We help students
understand, this is your minimum payment. It doesn't mean you won't end up in
credit card debt."
SEEK LOW-COST AND NO-COST ALTERNATIVES: Johnson gives these
examples: Students who love to read should check out books from the library,
rather than purchasing them. Students can also walk or ride bikes to nearby
destinations, rather than driving a car, and eat at home, rather than eating out.
WEB SITES:
• accessgroup.org
• collegeplanning.org
Debt at ISU
THE GAP: One explanation for debt being so high is that so many students
come from rural communities, where farm assets are land and cannot be
converted to money they spent to go to school, but still shows up in financial aid
calculations.
DURING SCHOOL: Students say loans put a strain on their grades because
many feel obligated to take on jobs while they are in school, forcing students to
split their time between studying and working.
AFTER GRADUATION: One fear is that students aim for higher paying jobs to
pay off loan bills, resulting in fewer students choose lower-paying public interest
careers.