Debt accumulated by students in college may be unmanageable for graduates who plan to enter professions such as teaching or social work, a new report compiled by OSPIRG and the Oregon Student Association shows.
The report states that University students graduated with an average student-loan debt of $17,802 in 2004, an increase of more than $7,000 over the past decade.
The study, “Paying Back, Not Giving Back: Student Debt’s Negative Impact on Public Service Career Opportunities,” comes roughly two months after U.S. Congress cut $12.7 billion from federal student-loan programs.
The report also shows that 15.9 percent of college students enrolled in a public institution in Oregon would face “unmanageable debt” if they entered the teaching profession after graduation, and 26.3 of students enrolled in a private institution in Oregon would face similar struggles with debt.
“Unmanageable debt,” is defined by the study as loan payments that “would have a measurable and burdensome impact on their lives and would likely hinder their ability to pay for basic necessities,” according to the study.
Nationwide, 23.2 percent of public institution students would face unmanageable debt if they became teachers, and 38.1 of private institution students would. New Hampshire college students face the biggest burden, with 54.1 percent of public students and 67.4 percent of private institution students facing possible unmanageable debt as teachers.
The study sympathizes with future teachers, and suggests increasing need-based grant aid, making loan repayment fair and affordable, protecting borrowers from “usurious” lending practices and providing incentives for state governments and colleges to control tuition costs.
Educational studies major and senior Kelli Bass said she’s not discouraged from becoming a teacher.
“I really want to do it, and it will make me happy,” she said. “I know in my situation I can pay it off. It’s a worthwhile profession.”
Bass said she plans to become an elementary school teacher.
“I think it’s just the everyday interaction with kids, the challenge that it provides every day,” she said.
Elizabeth Bickford, director of Student Financial Aid and Scholarships, said the University is doing what it can to help students earn grants and scholarships, and last school year the University offered more than $15.5 million in scholarships, roughly $2 million more than in the 2003-04 school year. She said the University continues to push for private donations to help fund scholarships.
Bickford said the best thing for students to do is be mindful of their spending and keep a budget to recognize and eliminate unneeded costs.
“If you don’t need to borrow money, you should stay away from that,” she said. “Look at your spending habits on a monthly basis, and then make strategic decisions to help you cut back.”
Bickford said the high cost of living, healthcare and housing has made it difficult for families to save what little they have for college.
“I think it’s unfortunate that students graduate with any level of debt,” she said. “The high cost of just daily living really has just put parents in a situation where borrowing for college is common. Families know that loans are out there and they’re relying on them to help finish college.”
Sally Spurgeon, the owner of Debt Eliminators in Eugene, mirrored Bickford’s advice in being mindful of spending. She said her best advice is for students to not have credit cards. She said about one quarter of her business comes from college students.
Spurgeon said credit card and student-loan debt is different, but if someone is in credit card debt more than $10,000 she suggests a settlement with the debtors to reduce the payment.
For those who have recently graduated, she said it’s best to hold out for a higher paying job before filing bankruptcy or attempting to settle a debt for a smaller payment.
“When you’re 20 years old you don’t need a bankruptcy showing up on your credit report,” she said. “It’s just totally important to be frugal with your money. It’s not like you should live like a hermit or anything, but you really need to watch your pennies.”
Correction: Because of a reporter’s error in Wednesday’s “New study documents student debt,” the Emerald should have reported that OSPIRG co-released the study “Paying Back, Not Giving Back: Student Debt’s Negative Impact on Public Service Career Opportunities,” with the Oregon Student Association.
The Emerald regrets the error.
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