Student loan debt set to soar

Rice, 25, of Kilmarnock, Va., borrowed $15,000 for her bachelor's degree from Xavier University in New Orleans and $190,000 for her medical degree from Pitt.

"It's overwhelming," she said. "It's hard to think about paying off my loans."

Nationally, more students are having to borrow for college, and they're taking out larger loans. Student debt is expected to grow after July 1, when the federal Stafford loans change from a variable interest rate, at 5.3 percent for loans issued for the 2005-06 school year, to a fixed rate of 6.8 percent.

"There's always a minority of students who experience real difficulty paying off their student loans," said Jacqueline King, director of the American Council on Education's Center for Policy Analysis in Washington, D.C. "With interest rates going up, we're especially concerned about those students."

Between the 1992-93 and 2003-04 school years, the proportion of students who borrowed to complete their bachelor's degrees rose from nearly 37 percent to 62 percent, according to King's center. During the same period, median debt for students who completed a bachelor's degree increased from $10,088 to $16,432. Those figures, which have been adjusted for inflation, are just for federally backed loans. There is no accurate data for private loans.

The average debt for students with a bachelor's degree from a Pennsylvania institution increased from $16,403 in 2000-01 to $17,675 in 2004-05, according to the Harrisburg-based Pennsylvania Higher Education Assistance Agency. These numbers reflect borrowing through state and federal loan programs.

Early in the decade, the average amount of debt held steady because of rapid increases in student grants and constant caps on how much students could borrow.

Lately, though, changing financial conditions might have forced students to borrow more.

Experts now estimate the average student debt for those with a bachelor's degree has climbed to $20,000.

That's a drop in the bucket to Rice.

She will do her three-year residency in Columbia, S.C., where she expects to make $40,000 a year. Her specialty, pediatrics, could pay $100,000 a year after she finishes her residency, but doctors in other fields could make three times as much, she said.

She hopes to get into a program that would help pay off her loans if she works in an underserved place such as a rural area or an inner city.

Students don't have to owe the equivalent of a home mortgage to be stressed out by their loans.

Denishia Salter, 21, of Rankin, graduated last week from Seton Hill University in Greensburg with $16,000 in loans.

"I have five younger brothers and sisters," she said. "We all stay with my grandmother. My mother passed away, and my father died last summer. It's just very stressful."

While she was in college, Salter squeezed her pennies. She rode with friends and split the cost of gas. She attended matinees rather than evening movies to save money.

Salter decided not to consolidate her student loans to take advantage of lower interest rates. The reason, she said: If she consolidated, she would lose the six-month grace period to begin loan repayments.

"It weighs on me every day that I need to get a job, I need to get a job," she said.

College debt forces some students to change their career plans.

Salter majored in journalism but hopes to get a job in media relations.

"I feel I'm more likely to make more money," she said.

Not all students are daunted by their debt.

Jeremy Burkett, 24, of Greensburg, graduated from Seton Hill with a degree in corporate communications. He owes between $25,000 and $30,000.

"I'm not necessarily worried about it, because I'm positioning myself so that the debt is manageable," he said.

Burkett works part-time for FedEx as a package handler. He would like to get a full-time job with the company and get a master's degree in rhetoric and communication, possibly from Pitt.

In addition to student loans, many undergraduates run up credit card debt or must pay off car loans. A June 2005 report for the American Council on Education said almost 80 percent of graduates who were still dependent on their parents had at least one credit card, and 46 percent of those carried a credit card balance from month to month. The median amount owed was $1,600 in 1999-2000, the most recent statistics available.

Among undergraduates on their own, 59 percent of credit card holders carried a balance. The median amount was $2,200, the report said.

Because of high interest rates, "the level of credit card debt could have serious implications for individuals as they begin repaying their student loans," the Council on Education report said.

Experts caution students and parents not to be scared off by the costs of getting a degree, however. Among workers 18 and over, those with a bachelor's degree make an average of $51,206 a year, compared with $27,915 for those with a high school diploma, according to the Census Bureau. Other studies show college graduates have more job mobility and more hobbies and can provide a better life for their children.

• Most Read
• Most E-mailed
• Latest News