Right now, Tad Stemen’s college degree is serving as expensive art.
The 2006 IPFW graduate left school with $42,000 in student loan debt, and though his degree in communications helped him land a job at first, he has since been laid off. He’s now working part time at Sears while looking for full-time work.
And that degree?
“Now it’s $40,000 sitting on my wall,” he said.
In pursuit of higher education, many college grads are racking up higher and higher amounts of debt.
In fact, a study released last month by The Project on Student Debt, a non-profit group based in Oakland, Calif., reports that the average 2009 college graduate left private and non-profit public schools with $24,000 in student loan debt.
That’s 6 percent more than the average for 2008 graduates and the highest total since the organization began the reports four years ago.
With the economy crawling toward recovery and colleges regularly increasing tuition, officials with The Project on Student Debt do not see the trend ending soon.
“I do think the effects of the recession are likely to show up more in subsequent classes than the one in 2009,” said Edie Irons, communications director for the organization. “If anything, the classes of 2010 and 2011 will be more deeply affected.”
Loans, more loans
In the past five years, the number of IPFW graduates leaving school with student debt has grown from 62 percent to 71 percent, according to Mark Franke, the school’s associate vice chancellor for enrollment management.
And the average debt incurred by IPFW graduates rolls in along the lines of the national average, at just less than $24,000, he said.
It now costs an in-state undergraduate student $242.40 per credit hour and an out-of-state undergraduate student $582.20 per credit hour to attend the school, according to the IPFW website. Both of those figures are up from the previous year.
“It’s definitely a concern,” Franke said of the rise in students with debt.
Factors contributing to that increase are that college students, like everyone else, are having trouble finding work to help pay for school. Or some come from families that normally had money set aside for college, but those savings were lost during the recession, according to Judy Cramer, director of financial aid at IPFW.
“Students are in the same boat as others,” Cramer said.
To combat high amounts of debt, the financial aid office is offering courses and online advice about how to manage money. Officials also want to reach out to students with financial advice through Facebook and other social media.
The key is getting students to take out only what they need to graduate, according to Cramer.
“If you’re taking student loans to buy more shoes or a better spring vacation, it’s a bad idea,” she said. “We really want students to take a close look at their budgets and borrow exactly what they need.”
In Stemen’s case, he needed to take out more and more loans to pay for living expenses and make it through school.
“Because I was quite a bit older, I was basically on my own,” he said.
Along with school, his loan money went to housing and car payments. Plus, he said he worked two part-time jobs while a full-time student – one at a mall and one serving and bartending at Eddie Merlot’s restaurant.
He’d begin his day in class about 7:15 a.m. and end it at work at 11 p.m., he said.
“I couldn’t work as many hours as needed to pay for school,” he said.
As does IPFW, the University of Saint Francis also offers courses in personal finance that students can take to help manage money.
To attend Saint Francis, it now costs students taking 12 to 18 credit hours $22,000 for a full year, according to the school’s website.
Many Saint Francis students depend on federal loan programs to attain their education, said Stacy Adkinson, the school’s executive vice president.
And federal loans are the best to take out, according to the study by The Project on Student Debt, because those loans typically offer more payment options.
Adkinson said her school has a high percentage of students taking out loans for several reasons – one being a large percentage of low-income students who are first in their families to attend college.
Another, she said, is that there seems to be a rise in younger “independent” students. These are students who are relatively young – in their early 20s – who have been part of the workforce for several years and are looking for ways to pay for their education.
In any case, Saint Francis also advises students to take out what they need and not go overboard.
“In the best of all worlds, students would only take out debt in accordance with the cost to educate,” Adkinson said. “But that’s a judgment call that goes beyond the auspices of the school. That’s their call.”
Indebted
In the end, even with all the debt he incurred, Stemen said his degree was worth it.
He began college at Vincennes University on a track scholarship. After graduating with an associate degree, he began school at IPFW. But an injury that ended his athletic career led him to drop out of school.
Several years later he went back to complete his bachelor’s degree, taking out loans and working part-time jobs.
After graduation, he was hired at Ruan Transportation on the southwest side of town and later earned a promotion.
Both his hiring and promotion he credited to having a degree. Not for a second does he regret taking out the loans that helped him get an education.
“It was something I had to do,” Stemen said. “Where I was working, it was due to my degree. And because I had a degree, it was the reason I got a promotion.”
Now, though, he’s in the boat of many just out of college: He needs to pay back a big chunk of change, and he’s taking part-time work until he can find something full time. All the while, his degree sits on the wall, a $40,000 piece of art.
