Cory Gates, senior psychology major, said he expects to be about $20,000 in debt when he graduates in Spring 2012.
“I have loans and scholarships that help me out a lot, but I usually have a couple hundred dollars that I have to pay out of pocket for,” Gates said. “It kind of sucks writing that big check to Kent State University.”
According to a Federal Reserve statistical release, student loan debt totaled $830 billion as of June 2010, surpassing the total credit card debt for the first time, which stood at $826.5 billion.
Curtis Reynolds, assistant professor of economics, said student debt totals are in direct relation to the increasing cost of tuition and the static cost of household income.
“You’re talking about college becoming more expensive, incomes haven’t necessarily adjusted and more people are trying to go to college,” Reynolds said. “Students who weren’t going to college 30 years ago are now going to college, and they are disproportionately more likely to need to borrow money to go to college.”
Reynolds said that in order to combat the rising costs of tuition, more students are pursuing financial aid.
“They’re taking on more financial aid, and that financial aid tends to be more in the shape of loans over time than grants,” Reynolds said.
According to the National Postsecondary Student Aid Study, in 1987, the average amount borrowed by students attending four-year public universities was $9,147.23. In 2008, that same average was $15,363.29.
“Credit became a lot easier to get in the late 1990s,” Reynolds said. “It was easier to get loans, not just from the government but loans from private banks to go to college.”
Once students graduate, Reynolds said they must commit some of their post-graduation earnings to pay off debt.
“This could be more difficult for certain students depending on their job and career choice,” Reynolds said. “The biggest problem is for students who do not graduate and therefore do not get the higher earnings associated with a B.A. but now have debt.”
Gates said that after he graduates from Kent State, he plans to attend graduate school.
“I hope that I can get (my loans) deferred until I get my Ph.D. and pay them off later,” Gates said. “I haven’t really thought about it.”
When Gov. John Kasich announces his state budget plans this month, Reynolds said any budget cuts could negatively impact student debt.
“It’s very possible that budget problems could cause either the state governments or the federal government to change from grants, which are free money, to loans, which will get repaid in theory.”
Contact Leighann McGivern at [email protected]