Pennsylvania college grads' debt tops U.S. average
Cherise Sage has 51,000 reasons she should have done things differently after graduating from high school.
Sage, 28, a Connellsville native who lives in McCandless, owes $51,000 in student loans and deferred interest, after bouncing from college to college and extending her repayment following graduation.
She earned a psychology degree from Point Park University in December 2008, but doesn't work in that field. She works two jobs, with the hope of paying the $330 a month she will owe for 25 years.
"Honestly, I would rather have went for something like nursing right out of high school, just knowing I would have gotten a good job and gotten paid well," Sage said. "I just regret what I went for. It's depressing. It's kind of like I felt I threw away my money."
Student loan debt that U.S. college graduates owe continues to increase each year.
Pennsylvania's Class of 2009 graduated with $27,066 in debt — more than $3,000 above the national average, according to The Project on Student Debt. The average debt rose by more than $10,000 since 2001.
The state's public and private four-year institutions ranked seventh highest in the nation for debt among graduates. About 72 percent of 2009 graduates carry student loans, ranking fifth-highest in the country.
Experts believe borrowing to complete a college education often is a wise investment that most can repay. But they caution students and parents not to overextend themselves with debts.
"Not everybody has to borrow to go to college, and most students that do borrow are able to manage their debt," said Anne Sturtevant, director of enrollment services and access initiatives with the College Board. "Borrowing provides a means for students to be able to finance college. For many students it's a great investment and it's not burdensome for them."
The U.S. Department of Education reported a 7 percent fiscal year 2008 student loan-default rate. Although that rate increased from an all-time low of 4.5 percent in 2003, it pales compared to the high of 22 percent in the early 1990s.
Higher tuition levels and more students enrolled in higher-cost private schools factor into why Pennsylvania graduates face higher debt, said Matthew Reed, program director for The Project on Student Debt.
And Pennsylvania students, who tend to come from lower- or moderate-income families, receive fewer federal, state and institutional grants than the national average, he said.
Penn State, Lincoln, Mansfield and Temple universities rank among the nation's top 21 public schools, in terms of average student debt.
At Penn State, 2009 graduates carried an average $28,680 in debt. Anna Griswold, assistant vice president for undergraduate education and executive director for student aid, said high tuition, a high percentage of low- and middle-income students, the sheer size of the university population and a low level of endowment for scholarships play a role.
Penn State graduates' default rate is low at 3.4 percent, she said.
"We say to them, taking out a loan is their responsibility and you're the only one that can really weigh if the value of the education you're seeking at Penn State is worth that debt," Griswold said.
Maryann Dudas, Seton Hill University's director of financial aid, gives steadfast advice: "Always borrow conservatively."
"There are some students who believe that because the money is available and it's out here, why don't I borrow the max," she said.
About 91 percent of Seton Hill's 2009 graduates had student loan debt, but an equal amount received a grant or scholarship, Dudas said. Yet, government grants have not kept pace with tuition increases, she said.
"And some people ... don't have discretionary income to put on a payment plan," Dudas said. "It's difficult, so the students are taking on more debt."
Indiana University of Pennsylvania Financial Aid Director Patricia McCarthy said more parent are denied loans because of the weak economy, forcing students to borrow more themselves.
Although the debt load of IUP's graduates is about $1,800 under the state average, McCarthy hopes to expand upon financial-aid counseling during freshman orientation. "We'd like to show them what kind of starting salary could they expect so they can compare that to the type of debt they're going to have after college," she said.
Charleroi native Natalie Bryner, 25, manages $54,000 in loans that financed an integrated bachelor's and master's degree in architectural engineering from Penn State in December 2009. She landed a job right out of school as an assistant project manager with a Rockville, Md., construction company and said she feels "comfortable" with the $650 monthly payments.
Bryner landed small scholarships and held a part-time job while in school, but her loans and those by her parents paid for most of her education.
"I just know I need to manage my paychecks, because I still want to save up," she said. "In the future I want to buy a house, so I'm trying to save. That's why I'm just paying the minimum (on student loans)."
Managing debt isn't easy for many borrowers.
"It's definitely a concern for people," said Kristen Garrett, spokeswoman for Advantage Credit Counseling in Pittsburgh. "(Counselors) have definitely seen people using credit for other things so they can pay those student loan debts. They've definitely seen people taking out multiple deferments and reaching that max, too, so they're still going to be left with money on the back end, in terms of interest that continues to accrue."
For Sage, deferring repayment of loans added about $20,000 to what she borrowed. She thought she had no choice, when the only job she could find upon graduation was as a waitress.
Since then, a Moon appraisal firm hired her. She waits tables Friday nights to make student loan payment.
Though she graduated from Point Park, Sage attended IUP and earned an associate's degree from Westmoreland County Community College, taking out loans along the way. She believes she should earn a master's degree in order to make it in the psychology field, but her debt scares her.
"I want to go back to school, but I'm so under with my loans right now that I don't think I could do it," she said. "I know a lot of people that still don't have jobs that have their four-year degree."Additional Information:
• When it comes to college loans, students generally have two options for borrowing — federally backed loans or private lending. Interest on federal loans is currently fixed at either 4.5 percent for subsidized loans or 6.8 percent for unsubsidized loans or loans for graduate students.
• The government pays the interest on need-based subsidized loans while a student is still in college. Interest accrues during college on unsubsidized loans, which are available to most students regardless of income.
• The interest rates on private loans are variable and can vary widely from person to person and bank to bank.
• Students typically have 10 to 25 years to repay loans.
• In 1998, Congress passed a law that kept federal student loan holders from discharging those debts in bankruptcy except in rare and extreme circumstances. That same rule passed to private student loans in 2005.Additional Information:
Heavy load ahead
A student's field of study — and the return in salary — should be a big consideration for any debt load taken on for college, said Al Lee, director of quantitative analysis at online salary and career data provider PayScale.com.
At the top of the mid-career pay list for someone with a bachelor's degree is a petroleum engineer making $157,000. At the bottom is a preschool teacher making $38,500.
'Be honest about the kind of majors you're pursuing and be honest about the income you'll make down the line,' Lee said.
Lee said a graduate from any of the elite schools probably will enjoy a profitable career regardless of major. And students shouldn't dismiss an expensive private school until they look at the true cost. Grants and scholarships could make a private tuition cheaper than a public school.
Potential students should compare a university's graduation rates and the time it takes most students to complete. If there's a high chance they might not finish or take longer to finish, that school might cost more in the long run.
'Really, the ones who graduate usually end up OK regardless of what field they go into,' added Jim Miller, president of the National Association of College Admission Counseling. 'It's the ones who aren't sure what they're doing, and either because of unstellar preparation or uncertain ambitions don't finish their degree and have two years of school and two years of debt. And they don't have a job that's a college-level paying job.'