When David Ruiz enrolled at Washington State University, he had no idea how to pay for it.
With so-so grades, he didn’t see himself as a scholarship candidate. Family support was limited – he’d spent his teen years working the orchards with his father, traveling with the seasons.
But he’d grown up learning in a bilingual classroom, and he wanted to teach in one himself. So he patched together the struggling student’s lineup of options: grants, jobs and loans. Every semester, he borrowed as much as he could through federally subsidized programs.
“I figured, if this is the only way to go, I’m going to do it,” he said.
Today, Ruiz is graduating with a bachelor’s degree in education and more than $45,000 in student loan debt. In that respect, he’s like most fellow graduates. Of the thousands of students who will earn degrees at regional universities this spring, more than two-thirds will leave owing money – an average of about $20,000.
That figure has been rising steadily, as college costs outpace family incomes and other financial aid. And, in addition to traditional, federally subsidized student loans, more students are turning to private borrowing – and even credit cards, according to the College Board, a nonprofit association that sponsors educational services including the SAT.
“Students have had to rely more and more on borrowing,” said Wayne Sparks, director of financial aid at WSU.
Some view the trend with alarm, saying it hurts poor families and minorities in particular. A Higher Education Project report on student loans by the state Public Interest Research Group estimated that 39 percent of all student borrowers graduate with “unmanageable debt” – debt that consumes more than 8 percent of their monthly income.
But others say borrowing to finance a college degree makes sense if there’s no alternative. College graduates earn thousands of dollars more a year, on average, than people who have just a high school diploma.
For a student like Ruiz – a first-generation American, English speaker and now college graduate – they would say loans are a worthwhile investment.
“If it’s the only option for going to school, I think it’s a good option,” said Dan Davenport, director of admissions and financial aid at the University of Idaho. “It’s better than the alternative.”
‘Definitely not affordable’
During the past decade, the cost of the average public university education in America has risen by 51 percent when adjusted for inflation, according to the College Board. Grants, scholarships and other types of student aid have generally not kept pace, nor have average incomes – particularly among the poorest Americans.
Between 1980 and 2000, the cost of tuition at a four-year school rose from 13 percent of the lowest-income families’ annual income to 25 percent, according to a report by the National Center for Public Policy and Higher Education, a nonprofit organization that advocates for greater access to higher education.
For students like Joanna Repsold, 19, a 2003 Ferris High School grad and Lilac Queen, loans help cover the gap. She’s a sophomore at prestigious Claremont McKenna College in Claremont, Calif., and it costs about $40,000 a year to attend.
“My dad is a pastor … and I have five younger brothers, so $40,000 a year is definitely not affordable,” said Repsold, who also works, maintains A-minus to B-plus grades, and is considering both acting and law school as post-graduate interests.
“I don’t know if I’d even be able to afford a community college without loans.”
Still, her debt isn’t as great as some. She’s expecting to graduate in three years owing about $20,000. “Really that’s nothing compared to what a lot of people will be graduating with.”
Besides cost, other factors are driving up the loan rates, financial aid experts say. Congress made it easier to borrow on the federal Stafford loan programs in the 1990s, regardless of family income.
“If Bill Gates’ kids were old enough to go to college, they could borrow through these programs,” said Sparks, the WSU financial aid director.
Some say that, in a credit-card culture, students are quicker to borrow than they might have been in the past. Others note that more parents are reluctant – or unable – to take out loans themselves to pay for college and are shifting that responsibility onto students.
“A lot of parents are tapped out themselves,” said Bruce Defrates, director of financial aid at Eastern Washington University.
Staying in school
Critics of the loan-heavy approach to student aid say Congress should increase its funding of grants. The Public Interest Research Group, for example, opposes raising loan limits, to prevent more students from “falling into burdensome debt after college.”
But Davenport, the UI’s financial aid chief, says it would be better for students to borrow more than to leave college. He says that the federal loan limits for a freshman in college – $2,625 – have barely risen in more than 25 years, though limits for upperclassmen have gone up.
He presents a hypothetical: Say a student from a poor family with no savings or other help wants to go to college. The student would need about $14,000 a year at the UI. A federal Pell Grant and student loan would cover less than half that.
And, while there are other sources of help and while students can always work, Davenport worries that that formula is hardest on kids from families with low incomes and no tradition of higher education. At the UI – where 36 percent of this year’s students are the first in their families to attend college – that’s a concern.
“That’s the student we don’t want to lose,” Davenport said.
Unlike many public universities, Gonzaga has increased its grant aid and tried to provide lots of financial help to freshmen in particular, said Thayne McCulloh, vice president of administration and planning.
That’s helped keep students from dropping out, McCulloh said, and it’s kept loan debt relatively stable. While the average student with loans graduating from Gonzaga owes a little more than $21,000, that figure has hardly changed in five years.
And the school has managed to reduce the number of students who drop out along the way, he said.
“If you enroll 100, but only graduate 65, that’s better than average,” he said. “But what happened to those 35? We looked at that issue and decided that while there are lots of reasons people are leaving, a good portion had to be that they just couldn’t afford it.”
The good news for this year’s graduates is that job prospects are improving.
According to a report by the National Association of Colleges and Employers, most employers are showing modest increases in salary for new hires, between 2 percent and 4 percent in most cases. Another report, from job-hunting Web site CollegeGrad.com, says that its entry-level hiring is up more than 13 percent over last year.
Financial aid officers emphasize that a college degree remains a good investment. According to the College Board, a college-educated worker will earn more than $1 million more over a lifetime than someone with a high school diploma.
For Ruiz, those considerations are still somewhat vaguely in the future. He’s finishing his student teaching at Blue Ridge Elementary in Walla Walla and hoping to land a job teaching in a bilingual classroom.
He knows the loan payments are coming. For now, though, he’s focusing on what those loans have purchased – a chance to work helping Spanish-speaking kids.
“The loans and all that stuff – I try not to stress about it,” he said.
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