Mounting debt raises students’ concerns

Lindsey Watson

The Signal

College students are in crisis.  Tuition is rising, loan interest rates are increasing and jobs are few and far between. Students are now leaving college with enormous debt.

“It is definitely a serious problem for individual students and society when students are leaving school with an average of $23,000 in debt,” said Edie Irons, communications director at the Institute for College Access and Success.  “It is really troubling.”

There are three different types of loans available for students: private or alternative loans; parent or PLUS loans; and the most common, the federally insured or the Stafford loan.  Finaid.org reports that in the 2007-2008 school year, two thirds of undergraduate college students graduated from college with an average debt of $23,186 from student loans.  

Qualifying students can apply for a Pell grant, which does not have to be repaid. In the 2009-2010 school year, the maximum Pell grant any one student could receive was capped at $5,350.  That is up from $4,731 in previous years. Some students also receive scholarships that do not need to be repaid.

In 2003, Gov. Rick Perry deregulated tuition in the state of Texas. From 2003-2009, tuition rates have increased by 86%. For the 2010 school year, University of Houston System schools are facing an increase at an average of 5.5 percent.

As of Feb. 2010, the U.S. unemployment rates have held steady at 9.7 percent. With the U.S. caught in the midst of a recession and unemployment rates remaining stagnant, recently graduated students face paying off student loans without sufficient employment.

Experts agree that everyone should be conservative when considering borrowing money for school.

“It is a good investment, but you have to be wise when taking that investment,” said Billy Satterfield, associate director of financial aid at University of Houston-Clear Lake. “Consider future income when borrowing. Only take what you need.”

Defaulting on student loans will do much more than simply add a negative item on a credit report. The federal government can garnish wages and take legal action against the person in default. Defaulting on student loans can also render one unable to gain future student aid or unable to buy a house.  While one won’t go to prison for defaulting on a student loan, financial ruin is a possibility.

Tracy Patteson, a 2009 graduate of University of Houston, found herself in this situation.  As a single mother struggling to pay for college, she accumulated a $37,000 student loan debt.   Unable to find work after six months, her students loans went into default.

“It is such a heartbreaking thing, first to undergo so much hard work, put myself through school and be unable to find employment, but then to be unable to pay my loans and have them  in default, destroying my credit,” Patteson said.  “I have failed myself and I have failed my daughter.”

Sara Quintana started college in 1998. Unable to pay for school, she took out several student loans.  As the cost of tuition and living rose, Quintana found herself unable to pay for school anymore. After dropping out, her lenders called to collect payment. Now, without a degree, she is scrambling to find a way to pay them off monthly.

“The whole experience has left me bitter and disappointed, almost like I’ve been tricked,” Quintana said. “We put ourselves through some of the toughest times in our lives hoping to make a better life, and all we got out of it was stress and debt that will trail us for the next 25 plus years.”