It’s no secret that higher education costs money—lots and lots of money.
The pursuit of knowledge may cultivate minds and build character. It may provide students with valuable experience and the marketable skills necessary to become gainfully employed.
It may lead to a number of wonderful career opportunities that perhaps would not have been available without a degree. But it can also leave students struggling financially for decades after graduation.
According to Kennesaw State’s Office of Student Financial Aid, 80 percent of all KSU students receive some form of aid to help cover the cost of college and the average KSU student graduates owing more than $18,000 in student loans. In the 2012-2013 school year, 15,686 KSU students took out federal loans. Seventy-nine percent of those loans were subsidized, meaning the interest is deferred until six months after graduation. For the 21 percent of students who took out unsubsidized loans, however, that interest begins accruing immediately—and can add up quickly.
In an interview with USA Today earlier this month, Richard Cordray, the director of the Consumer Financial Protection Bureau said student loans have become the second largest source of consumer debt in the United States, surpassing credit card and auto loan debt.
Cordray said Americans owe more than $1 trillion in outstanding student loans. KSU’s Dean of Student Success Michael Sanseviro is no stranger to student loan debt. Having spent the majority of his adult life pursuing higher education, Sanseviro attended a number of universities, including Emory, Florida State and Georgia State.
“In total, between undergrad and various graduate degrees, between borrowing and refinancing, I ended up paying back about $60,000,” Sanseviro said. “What I did was every time I went back to school I would defer the debt.”
Sanseviro, originally from New York, moved to Atlanta in the mid ’80s to attend Emory University.
“In my first year it was actually cheaper for me to go to Emory than it would have been to go to a state school in New York,” he said. “My first year was actually pretty affordable.”
Sanseviro said after his freshman year, Emory’s tuition increased at least $1,000 a year.
“Often the prestige of a private school is linked to comparative costs of other schools,” he said. “Emory would always try to compete with Duke so if Duke increased their tuition, Emory had to raise theirs. Every year I was there it went up.”
Sanseviro said he had to pay $12,000 in his final year at Emory in order to remain enrolled in his classes.
Keelee Peterson, a KSU alumna who graduated in May with a degree in world history, said she owes approximately $15,000 in student loans.
The 35-year-old mother of two, who works in commercial real estate, was a non- traditional student who went back to school after taking time off to work and raise her children. She said she has not started paying back her student loans yet because she is still in her six-month deferment period.
“I’m probably going to make one or two lump-sum payments and just pay it right off,” she said.
She said she doesn’t really worry about the money she owes because she and her husband are financially stable enough to pay it off.
“If they came to my house tomorrow and said, ‘You need to give us the money today,’ we could give them the money,” Peterson said.
Peterson said she understands that not all college graduates are in her position and feels very fortunate.
“I have a lot of friends and a lot of family who are bogged down by the debt, but I think that’s partly why we did things the way that we did,” she continued. “There’s a reason I was 32 years old when I went back to college.”
Peterson said she could see how students can become overwhelmed by loan debt because it is so freely available.
“I think we have a problem in our society where we push kids to go to college right out of high school and I think it contributes a lot to where our student loan situation is right now,” she said. “They make it so easy to get those loans [and] these kids think it’s easy because they’re not having to pay them while they’re in school.”
Sanseviro finished paying off the last of his student debt last December.
“Student loans are kind of like a mortgage,” he said. “When you’re paying the mortgage on a house, you might pay about $500 that month, but of that $500, maybe $25 of it actually goes to the principal and the rest of it goes to the interest.” Sanseviro said what was stressful about paying back his debt was that the interest was accruing.
“I’d be writing these big checks and I’d be looking every month but it seemed like my balance hardly ever went down,” he continued. “That’s what was stressful to me.
“With student loans you actually end up paying about three times more than what you borrowed because of how the interest accrues,” said Sanseviro.
Donald Sabbarese, an economics professor at KSU who also serves as the director of the Econometric Center, said it took him five years to pay off the $10,000 he owed after graduation.
“Students must consider the cost of their education and resulting debt versus the potential income and job opportunities they anticipate upon graduation,” he said.
Sabbarese said that in the current market, many graduates would have to spend more time searching for jobs that provide them with enough income to pay back their student debt.
“The cost of post-secondary education has surpassed the average inflation rate, putting pressure on students to borrow more”, he continued. “The onus is on the student to do a better job to determine how much to borrow versus what they think they will be willing and able to pay back.
“Student loan debt today tops $1 trillion and the level of delinquency continues to rise. The growth rate of student loan delinquency poses the greatest credit concern in the U.S.,” Sabbarese said.
