Graduating into Debt
May is a watershed month for graduating college students. Another will approach in six months, when those entering the work world must begin repaying student loans.
Americans carry more student debt than credit card debt, according to the Consumer Financial Protection Bureau. The UW System calculates the average undergraduate debt at more than $30,000.
Three UWM seniors realize they owe, although none seems sure of how much.
"I have department of education loans, but then I also have private Sally Mae loans and that's how I have so much that I owe, because they tell you what your interest is going to be, so it's like $70,000 and so each semester I have taken out my max in order to cover books and cover rent so."
"Probably $40,000 to $50,000…and it is a lot, but you gotta do what you gotta do, I mean money doesn't grow on trees."
"I'm like this is a great opportunity, I can't wait and then now I'm here, f
our years later and I have a lot of debt."
Of the three soon-to-be-graduates, Sarah Johnson, Lyla Goerl and Marissa Mielke, only Goerl does not plan to attend grad school. She describes herself as stressed.
"I gotta look for jobs because in six months I have to start paying off loans and that's going to take pretty much the rest of my life to pay it back. It's sad to think that $350 a month, plus everything else you have to pay for on an entry-level job, it's ridiculous,” Goerl says.
Rough calculations show the average undergrad borrower facing monthly payments of $350 for nearly 20 years. While Goerl hopes she can afford hers, Marissa Mielke is confident the career she eventually forges will justify the degree earned with borrowed money. However, she wonders about students who dropped out along the way.
"I feel bad, like I have so many girls that I have met that aren't currently in school and they paid grands, you know, stacks on stacks on stacks for those two years of just memories? I mean, what do you call that - $8,000 a year for memories,” Mielke says.
Mielke plans to take a year off before attending graduate school. Students with similar plans must start repaying their loans - until grad school begins. Then the loans are deferred, while the student works on a master’s degree.
Sarah Johnson says she realizes deferring what could amount to $70,000 will compound her future. She already has her son’s education in mind.
"I have Aiden, who is nine, so in nine years, he will be going to college. I'll have only been paying for maybe four years by the time he's starting school, then I'm going to have his tuition to pay for also. That's what scares me the most, because I have no idea how I'll be paying for it." Johnson says.
Johnson says when she finishes school, she plans to take any job she’s qualified for so she can begin paying off her loans.
Not all UWM seniors face sizeable debt. Bethany Cressey is walking away owing a mere $18,000, thanks to family help, and she does not intend to be picky when it comes time to paying her debt.
"My step-sister works in the restaurant business as a manager for like a really nice café, so I could get a job there," Cressey says.
Is a degree worth the dent that student loans put in your future budget and lifestyle? Each senior told me she’s happy she attended college, but wishes she had thoroughly understood the financial burden to follow.
(This story was prepared by WUWM News Intern Faith Lenard)