By Kelsey May
Six months after graduating, most college graduates will get a brand new responsibility: paying back student loans.
A 2003-2004 National Postsecondary Student Aid Study found few students can afford to pay for college without some form of education financing, and two-thirds of undergraduate students go out into the real world with an average debt of over $19,000.
In 2000, a Nellie Mae study found that of the 95 percent of students with credit cards, the average debt among them is more than $4,000, and the median among them is more than $3,000.
Sheia Pleasant, assistant director of financial aid for Flagler College, said that approximately 55 percent of Flagler students have student loans. Of those who borrow, the average student loan debt at graduation is approximately $15,000.
That is the total Rachel Tonnemacher, who graduated in December with a degree in communication, will have to begin paying back her loans in July. She is currently living in Wheaton, a Chicago suburb, and after three months of job hunting, found a position at a local cable station, Naperville TV17. She is involved with community development and PR campaigning, and also helps with editing.
She took out a Stafford loan with an interest rate of about 6 percent and her six-month grace period is almost up. In July she must start making payments on a balance of $15,000.
“I also owe my parents about $2,000 on top of that,” she said. She will not be able to get another job to help with her payments because, “I’m going to have a pretty grueling work load,” she said.
But Tonnemacher is doing her best to keep up with her budgeting.
“I’ve learned, and I think college really taught me this, to prioritize what I spend my money on. If I have money left over at the end of the month to have fun with, I can do that, but right now it’s about prioritizing,” she said.
Pam Leydon, the executive director of finance for Flagler College, said that in the last five years she has seen an increase in the number of Flagler students who take out loans, as well as an increase in the amount of those loans.
Eric Larson, a junior at Flagler sees his future student loan debt as a part of life. When he graduates next year with a BA in sport management, he will owe about $22,000.
“I think I’ll be ready to start paying it off and I don’t think it’s that bad compared to other schools. I think I’m pretty lucky,” he said. He took the loan out in his name because he knew he could get a better rate than his parents.
“I took out my loan with a credit union and my rate is really low — about four percent I think. It would be much higher for my parents,” he said.
Morgan Southwell went to Stetson University in Orlando for two and a half years. She then transferred to the University of Florida and graduated in 2003 with a BA in exercise and sport medicine. She had the same six-month grace period as Tonnemacher to start paying off her $35,000 debt and now she owes about $30,000.
“I’ll be paying it off until I die,” she said. Each month she pays $88.45.
At that rate, it will take Southwell about 28 years to pay it off. Southwell also added that she had to pay her taxes with one of her credit cards because she did not have the $2,000 she owed.
She has plans to go back to grad school because she needs to get her Ph.D., but she is “taking her time” until then working at TGIFridays.
“I’m also a beach bum, but that doesn’t pay,” she said.
A Nellie Mae Loan survey found that 17 percent of respondents “strongly agreed” or “agreed” that they had significantly changed their career plans because of their student loan debt. The survey also found that 66 percent of borrowers said that while repaying loans is unpleasant, the benefits are worth it.
Some students, though, are responding to their loans by creating interest groups on their campuses. Penn State has begun a grassroots campaign to write to public officials and create more awareness about the burdens of their student debt. This campaign is not only a response to personal debt, but to President Bush’s plan to cut $2.7 billion from student loans in the next five years.