There's a reason Rachel Given rented a decent but not fancy apartment when she recently left Fort Wayne for a job in Florida.
That reason is also prompting the 26-year-old to cook more at home, pack more lunches for work and put more miles on her 2004-model car.
She sometimes indulges in coffee from coffee shops – her “little piece of heaven” – but has otherwise limited discretionary spending because she graduated from college three years ago with almost $60,000 in student loan debt.
Countless others face similar situations. Outstanding student loan debt totaled $1.51 trillion in the fourth quarter of 2019, up by $10 billion from the previous quarter, according to the Federal Reserve Bank of New York.
Student debt has attracted attention from politicians. Before the field of Democratic presidential contenders dwindled, candidates offered varied solutions, including a loan debt cancellation plan and a call for free or subsidized tuition. Presumptive Democratic nominee Joe Biden's promises include making public colleges tuition-free for families earning below $125,000 and implementing income-driven repayments on federal student loans.
Meanwhile, the coronavirus pandemic has prompted lawmakers to offer some relief. The Coronavirus Aid, Relief and Economic Security Act – the U.S. government's $2.2 trillion coronavirus relief bill – suspends payments on most federal student loans through Sept. 30, although borrowers may continue to make them.
Given, a South Side High School graduate who spent three years at Purdue University Fort Wayne and two at Iowa State University, anecdotally knows she took out more student loans than her peers.
Research by the College Board supports that.
Among bachelor's degree recipients from public and private nonprofit four-year institutions, the average debt per borrower was $29,000 in 2017-18, a $300 increase in 2018 dollars from 2012-13, according to the nonprofit organization behind the SAT and Advanced Placement program.
Students at Indiana's public two- and four-year colleges borrow even less, owing an average of $23,684, according to a recent report from the Indiana Commission for Higher Education.
Even so, such debt can take a decade or more to repay, even with above-average earnings, said Sue Ellspermann, Ivy Tech Community College president.
“This burden has a ripple effect on our economy as talented graduates often have to delay major financial decisions, such as the purchase of a home and having a family, until they are debt free,” Ellspermann said in a Feb. 27 statement.
Given didn't hesitate when asked whether her total $500 monthly payment on a mix of federal and private loans is significant.
“Yes, it definitely is,” said Given, video coordinator for the University of North Florida's athletic department.
Douglas Hess, financial aid director at Purdue Fort Wayne, is used to families asking: Why is tuition the way it is?
Purdue University raised tuition for the regional campus by 1.65% last fall and will implement another raise for the 2020-21 year, bringing the general undergraduate rate for residents to $8,730.
The rate is for the full academic year and based on 15 credit hours per semester.
Similar factors drive tuition at northeast Indiana schools, officials at various colleges said. Personnel costs, building maintenance, student activities and student services including advising, wellness and mental health all come at a cost.
“None of that's cheap,” Hess said.
Belonging to a system of schools can help institutions like Purdue Fort Wayne and Ivy Tech Community College's Fort Wayne campus reduce costs because some resources are shared, such as information technology systems and legal expertise, officials said.
Ivy Tech charges the same tuition statewide, which amounts to about $4,350 for two semesters of 15 credit hours, based on fall 2019 rates, according to its online tuition calculator.
Community colleges generally charge lower tuition because their infrastructure and labor costs are typically lower than those costs at four-year colleges and universities, said Valerie Eakins, executive director of administration at Ivy Tech Fort Wayne.
“Often, community colleges hire adjunct faculty with practical work experience in their fields to teach courses versus tenured faculty at universities,” Eakins said by email.
Earl Brooks II, president of Trine University, also blames institutions for not controlling costs. For a while, schools competed with their facilities and would support that arms race through tuition instead of fundraising, he said during a recent university podcast about student debt.
Indeed, the College Board found that annual increases in published tuition and fees exceeding 5% were common from about 2001-02 through 2012-13, according to its Trends in College Pricing 2019 report.
That started to change around 2013-14 for public and private nonprofit institutions, the report added. Between 2014-15 and 2019-20, it said, the average published tuition and fees at public four-year institutions increased 1.2% per year.
“Although this news is encouraging, prices have risen rapidly for many years at the same time that household incomes have grown slowly, inequality has increased, and too many students are struggling with repaying student loans,” the College Board said.
At Trine, Brooks said, officials have tried in recent years to control costs with maximum 2% increases annually, and the university supports capital improvements through fundraising.
“Tuition dollars need to go back into the classroom to support instruction and to support our faculty,” Brooks said on the podcast.
WGU Indiana is a nonprofit, accredited online university whose students are generally older – the average age is 36 – and represent groups often underserved by traditional colleges, such as ethnic minorities, first-generation college students and low-income earners.
“Affordability is a key factor in their decision to return,” said Alison Bell, chancellor of WGU Indiana.
Part of Western Governors University, WGU Indiana boasts on its website that the average total cost of a bachelor's degree is $16,500.
Unlike traditional institutions, the online university doesn't have the “heavy burden” of facilities costs, Bell said. Instead, she said, tuition dollars are invested in students.
Lowering the sticker price
Teresa Vasquez, director of financial aid at Ivy Tech Fort Wayne, knows the Free Application for Federal Student Aid, or FAFSA, might be daunting to students and parents.
Families also might dismiss it because they assume their income will make them ineligible for aid, Vasquez added.
But she and others encourage students to complete the application, which Vasquez said has been simplified and now includes checkpoints to assist in the process.
“The fact is that the FAFSA is used at most colleges to help determine eligibility for all federal grants, state grants, work study programs, student loans, and scholarships,” Vasquez said by email.
For students seeking aid for this fall, she added, the FAFSA records income from 2018 federal tax returns to determine aid eligibility.
“We understand that circumstances may change for families, and it is important to keep in contact with aid offices to see how unexpected income changes might affect aid offers,” Vasquez said.
Nationwide, the average full-time equivalent undergraduate received $15,210 in financial aid in 2018-19, including $9,520 in grants and $4,410 in federal loans, according to the College Board's Trends in Student Aid 2019 report.
Local college officials said the majority of students at their institutions receive financial assistance.
Net price calculators on college websites offer prospective students an estimate of their costs.
In a disclaimer for its calculator, Indiana Tech notes that 93% of its full-time, first-year undergraduates received assistance through scholarships and grants in the current academic year.
Alumni and community members also make college more affordable for students, local officials said.
Trine donors may support the university's Books and Beyond program. It offers smaller scholarships for items not addressed by financial aid, such as textbooks or emergency expenses that could affect students' ability to stay in school, said Lisa Maxwell-Frieden, vice president for alumni and development.
“We don't want them dropping out because they have a $300 bill they couldn't pay,” Maxwell-Frieden said.
At Ivy Tech, donations provide for scholarships, books, program support, emergency funds and athletics programs, said Margaret Sturm, executive director of resource development at Ivy Tech Fort Wayne.
“Ivy Tech Fort Wayne and Warsaw's generous donors are crucial to our students' success,” Sturm said by email.
Chaise Kahlenbeck, a Fort Wayne accountant who graduated with more than $81,000 in student loans, woke up early one morning in January 2019, unable to shake the burden of his debt.
At the time, Kahlenbeck was a new father with a 3-month-old daughter.
Thus began his research into student debt in the United States.
His findings shocked him and prompted him to start a college consulting business, Cap Consulting, that educates high school students and parents about student loans.
Kahlenbeck considers himself lucky because he was financially literate when selecting a college and chose a career with high-earning potential, he said.
“I am not complaining about my debt. I knew exactly what I was getting myself into,” the 26-year-old said. “However, it's a farce to believe that every kid coming out of high school – kids that are expected to go to college – are fully aware of the consequences.”
Kahlenbeck has since spoken to high schools including Concordia Lutheran and his alma mater, Bishop Dwenger. He presents students with facts about student loans and their options, he said.
Students at Fort Wayne Community Schools have a range of understanding about college costs, said Shenita Bolton, K-12 college and career readiness manager.
FWCS, which has about 30,000 students, offers numerous educational programs for families, including “How to Pay for College Without Going Broke” workshops, classroom presentations, individual guidance and aid application filing events. The district also helps students enroll in the 21st Century Scholars program, through which students can earn 100% tuition scholarships to certain Indiana colleges.
Bolton encourages students and parents to contact her office or their school's guidance office with questions.
“We have many students who will be first generation college students. We have many who are seeking merit- or need-based scholarships,” Bolton said by email. “And we have many who are just trying to navigate what can be a very complicated application and financial aid system. Even students in families where both parents are college graduates oftentimes still need assistance with the process.”
Colleges also can help families understand their options for tuition, local officials said, noting these discussions often happen during the admission or enrollment process.
WGU launched a responsible borrowing initiative in 2013. That effort includes encouraging students to only borrow what they need, said Bell, chancellor for WGU Indiana. As a result, she said, the average borrowing of students who take loans has decreased by more than 40%.
Brooks, the Trine president, sees room for improvement.
Astronomical borrowing of $75,000 or $100,000 is understandable if the loans support an advanced degree, such as medical school, Brooks said, but those totals are “very unfortunate” for undergraduates.
He said prospective students should be aware of their potential earnings after college.
“Part of what institutions need to start doing better is the whole financial aid education process for parents and students early on,” Brooks said.
About this project
The cost of college has continued to increase, taking those who earn a degree years to pay down the debt. The topic has even been a talking point for those campaigning for U.S. president, so The Journal Gazette staff decided to take an in-depth look at the financial realities of higher education with a three-week series of stories on “Diplomas & Debt.”
• Why getting a college degree has become such an expense, including the stories of some graduates with loans to repay. See more on Page 1C.
• Should parents feel obligated to contribute to their children's college costs, even if it means saving less for their own retirement?
Coming May 17-18
• Financing a college education and a look at one debt-forgiveness program.
• A look at proposals politicians and congressional lawmakers have offered to make higher education more economically reasonable.
Coming May 24
• The debt repayment requirements for loans taken to finance college can affect the options graduates can consider when it's time to buy a home.
• Some students who bypass college and instead opt for trades training can find fulfilling jobs with decent salaries.
• Tuition assistance programs employers offer are popular.