In June 2010, the nation-wide total student loan debt exceeded total credit card debt for the first time in history. The figure for outstanding student loan debt in the United States increases by nearly $3,000 per second. Grants and scholarships have not increased enough to keep up with the rising cost of tuition, forcing more students into crippling debt every semester. We know the numbers—more than $1 trillion in national debt—but do we fully understand the emotional toll debt can take on students?
Alexandria Hughes, a double major in math and biology, sought the advice of a counselor last summer because she was so stressed on a daily basis. Hughes doesn’t have job problems or family problems or relationship problems. Hughes has a debt problem.
“I checked my account the other day,” Hughes said. “Right now, I have about $20,000 in student loans and interest.”
According to the Bureau of Labor statistics, 54 percent of degree-holders under age 25 are un- or underemployed. The average in student loan debt has nearly tripled since the last generation was graduating, up from $10,000 in 1985 to over $26,000 today. Surpassing credit cards and mortgages, student loans represent the largest portion of American debt, a total which surpassed one trillion dollars last year. Even with debt on the rise, income is steadily dropping, and so are the hopes of today’s young people that the American dream may still be alive.
To Hughes, the size of the number is hardly surprising.
“The loans that I took out my freshman year, which were $5,500, have already accumulated $1,000 worth of interest,” she said. “It piles on top and it adds up. That’s the thing about the unsubsidized loans, which are the only ones I qualified for.”
Hughes is restricted to unsubsidized Stafford loans because of her parents’ income level. According to her FAFSA, her “expected family contribution” is $37,000 per year. Hughes is one of five children and her parents are still struggling to pay off their own student loans. That number, she says, simply isn’t realistic.
“My parents both graduated only ten years ago, and as pharmacists, they each had four years of $20,000 tuition,” Hughes said. “They’re knee-deep in debt as well.”
Matt Williams, 32, is in a similar situation and feels that the economy is to blame for his current underemployment. Williams graduated in 1998 with an associate’s degree in drafting and design, and while he worked successfully as a civil drafter for several years, he lost his job when the recession began. He spent a year working for Winco, and has worked several restaurant jobs since.
“I would have figured by now I’d be a project manager,” Williams said. “Life kind of sucks right now because I’m not doing what I’d like to be doing.”
Williams graduated with close to $15,000 in loans, and, 15 years later, still owes about $3,000. As much as he would like to go back to school and pursue a four-year degree, he is unable to do so until the loans are paid off. Making less than $20,000 per year with no benefits, Williams can’t see himself debt-free any time in the near future.
“I think I shot myself in the foot with a few of my choices when it came to education,” Williams said of his decision to pursue a professional degree rather than attend a four-year university. “I took the easy way out, and I’m paying for it now.”
For now, Williams only hopes that the economy will recover enough that he can find work outside of the restaurant business.
“The goal is to get back into civil design and drafting, and try to work my way up to maybe being a project manager,” said Williams. “But that all depends on the economy. It’s not looking good, I can tell you that much.”
Jennifer Iuvone, a representative of the Boise State Career Center, works with many graduating seniors facing difficulty finding careers rather than service industry jobs. She says that in the current job market, while many students are able to find some kind of work, very rarely does it pertain to the field they studied in college, raising more questions about the necessity of a degree, especially when mortgage-sized debt is needed to attain one.
“Look at something like social work, where a master’s degree is entry level,” said Iuvone. “These jobs require a lot of education, which is expensive, and start (paying between $20,000 and $30,000 per year).”
In such a situation, where postgraduate education is required but nearly impossible to pay for, Iuvone feels that students are simply at the mercy of a system that does not work. To do the job, a degree is necessary, but the job will not pay for the degree.
“Tuition and fees keep rising every year, whether we like it or not,” she said. “It’s a system that could be reevaluated, for sure.”
But despite the system’s shortcomings, Iuvone hasn’t given up on it just yet.
“The American dream has become more competitive,” she said. “It’s probably (possible) for fewer individuals than in the past, but it’s not something that is dead or becoming impossible. It comes down to work ethic and personal choice.”
Hughes, however, feels that debt may be limiting the potential of people in her generation. Although she anticipates pursuing a career that will pay enough for her to repay her loans, she wonders about students who dream of seeking less lucrative careers.
“There are a lot of students out there who are in the same boat as me,” she said. “Some of us get grants and some of us have loans, and ultimately that determines a lot of what we’ll be able to do when we leave this place.”
Hughes expects to accumulate about $35,000 in loans and interest by the time she graduates. She is thankful that she has the opportunity to obtain a degree, something she could not do without her loans, but she struggles under the stress of knowing how deep in debt she will soon be.
“I’m constantly thinking about when I’ll be able to buy groceries,” Hughes said. “Should I pay on my interest that’s accumulating, or should I go buy groceries?”
Hughes said her personal life suffers, not only because of her stress, but because her carefully limited budget and the time constraints that come with her three jobs get in the way.
“I have a seven-year-old brother and I want to take him out and do things,” she said. “I really want to take him to the Discovery Center and show him the Bodies Exhibit that’s going on right now, but I know it would cost $32 for us both to go, so I decided against that.”
For Hughes, $35,000 in debt has become more than just a number. It is a constant part of her life now, representing her emotional struggle at every moment.
“It’s so much more of an emotional issue than it is logistical,” she said. “I know I’ll be able to pay it back. I will. But it leaves its mark. I think about it every day.”