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*Student College Debt on the Rise!

Imagine being 53 years old and still paying off your college loans! Far-fetched? Not really! The Seattle Times recently reported on a 2008 Boston University graduate who owes $152,000 in student loans. If he pays the minimum payment of $1,000 a month, he will make his final payment at an age that many adults are considering retirement. This business administration graduate is employed today and earns approximately $40,000 a year but has no plans to buy a house in the next ten years. He has moved back in with his mother to help save expenses. In the past these figures were normal for those entering the legal or medical fields, they now are becoming commonplace even for those seeking undergraduate degrees. On the surface, the college experience does not appear to have changed drastically in the last 30 years. However, several factors have led to the increase in student debt:

1. College is more expensive. When compared to starting salaries for college graduates, tuition is five times higher today than in was in the 1980’s.

2. More students need loans. In 1993, only half of college students needed financing. Today over 67% receive loans to offset tuition and expenses.

3. Loans have become privatized and are marketed directly to students. In 1997, the Federal Government was the main source of student loans. Today over 22% of college loans are made in the private sector, a tenfold increase.

College is still a good investment with today’s graduates earning approximately $51,000 annually compared to $31,000 for a high school graduate. However, with the rise of associate degrees and industry certifications, the income gap is narrowing. Students need to consider several options before blindly committing to huge college loans:

1. Consider less expensive four-year colleges. While there are many colleges with prestigious reputations, their degrees do not always translate into higher salaries. Do your homework and check the starting salaries of their graduates against other less prestigious colleges which may not be as well known in the media. Some of these colleges produce graduates well known in certain industries and professions and can provide a great education at a bargain price.

2. Consider Community College. While community colleges do not have many of the popular experiences associated with college such as dormitories and college athletics, they offer a good starting point for students who want an advanced education. Not dominated by faculty bureaucracies focused on traditional course offerings, community colleges often tailor their course offerings to the latest trends in the workplace. In addition, many institutions have agreements with four year colleges where their credits can transfer directly into degree programs. This allows students to receive a degree from a four year institution at a fraction of the cost. Last year in Virginia, approximately 33% of Virginia college graduates used some credits from community colleges to earn their degree. Currently in Virginia, the community college system has guaranteed admissions agreements with many 4 year colleges and universities. Check out your opportunities at: htttp://myfuture.vccs.edu/Students?Transfer/tabid/106/Default.aspx

3. Have a plan. Many students enroll in college with no idea about their major or career choice. This often leads to students transferring to other institutions before they graduate. Others switch majors numerous times before they graduate. Both of these add up to longer college stays. Students often coast through several years of college thinking that they will miraculously discover their career and earn their degree. Such was the case of Josh Bates of Montana State University. After five years of college and no degree, he suddenly realized that he had accumulated $50,000 in student loans and $8,000 in credit card debt. He ended up dropping out and going to work without a degree for a marketing firm in Seattle.

4. Have a Back-up Plan. As anyone who has taken a long journey knows, you often have to make detours. Lack of funding, family illness and a down economy are just a few of the reasonable detours in one’s pursuit of a career. Develop a back-up plan to utilize in case your first career goals are delayed. Develop skills in a related career field that may help you in case the economy is down and you cannot immediately find a job in your field. Health care and technology are just two of the fields that offer good paying jobs which do not require a four year college degree to be employed. A licensed practical nursing degree can be obtained through many public school systems, including Chesterfield, for free. LPN graduates can often earn in the mid-$50,000 salary range doing shift work and have flexible schedules that often allow for continuing education. Technology certifications are also a bargain and lead to high wages in fairly recession-proof industries.

5. Let your employer pay for your college education. Businesses are looking not only for employees who have good academic knowledge, but also those with a good work ethic. Students who earn internships and apprenticeships while still in high school give employers an opportunity to observe their work ethic. If the employee has obtained essential academic and work place skills while still in high school and is performing well, the company will often pay for him to earn his degree part time.

These are just a few of the options available to help reduce post-secondary education costs. There are numerous scholarship opportunities and other methods available as well. Any student serious about going to college needs to check all of the resources available in his school’s college and career center. The student should also schedule an appointment with his school counselor to receive a full explanation of the resources available to all students. And do not forget to look at the course offerings in Career and Technical Education. Many of the skills obtained in these courses can lead to jobs that pay above minimum wage and are in high demand. Some of these skills may relate to a student’s college major and if not, may at least become a source of income to help support a student’s college expenses.

• Based on “As costs rise, more students drowning in debt”, Richmond Times-Dispatch, November, 2008.

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