Higher ed, higher debt
Jess D’Arcy graduated from Washington & Jefferson College in 2008. Then she began an even higher education.
“I had about $65,000 in debt,” she lamented. ”I had to learn how to take care of that.”
A psychology and theater major, D’Arcy had obtained loans to help pay for her schooling at W&J, a private liberal arts college that, at the time, cost about $40,000 annually in tuition, fees, housing and other expenses.
Her goal was a bachelor’s, and she acknowledged she got two at a quality institution. She also secured a full-time job in one of her fields of study – as a fundraiser for Pittsburgh Public Theater.
But D’Arcy sometimes wonders whether the payoff of a degree is worth the angst, sacrifice and financial strain of paying off college debt – at hundreds of dollars a month for a decade, maybe two.
That sheepskin isn’t cheap skin.
D’Arcy is not alone in this matriculate-now-pay-later quandary. An estimated 37 million Americans have outstanding student loans, according to the Federal Reserve Bank of New York.
The average student debt nationwide is $28,000, up 58 percent from $17,000 in 2005, said Dr. Daad Rizk, financial literacy coordinator at Penn State University, who last month launched a series of fiscal-responsibility workshops for students.
And with tuitions continuing to rise, that average is likely to increase amid a backdrop that may continue to include a rickety economy, fewer employment opportunities, fewer well-paying jobs and the apparently diminishing importance of a bachelor’s.
“Ideally, I’d like to see every student graduate from college without student loan debt,” said Matthew Stokan, director of financial aid at Waynesburg University. “In this day and age, though, that is virtually impossible.”
The entire bill – or “sticker price” – for four years of undergraduate work generally varies from $75,000 to $200,000. According to collegeboard.org, the “moderate” price of an in-state public school education for the 2012-13 academic year was $22,261, and $43,289 for private colleges.
The figures have been only ascending.
“The cost of education has gone up significantly over the past 15 to 20 years,” Stokan said.
Two of the three colleges in the region – W&J and Waynesburg – are private. Tuition and fees at W&J total $38,310 per year; tuition and the activity fee at Waynesburg add up to $20,540.
Tuition, exclusive of fees, at California University of Pennsylvania is $6,428 per year. As a state-owned school, Cal U. has its tuition set by the Pennsylvania State System of Higher Education.
There are means by which students can limit their financial burdens. They can apply for loans, scholarships and work-study programs; work part time while in school, full time between semesters; serve as a residential assistant in student housing; and commute if the family home is near school.
In many instances, students don’t have to start repaying loans until six months after graduation.
There are, however, fewer loan options today, and interest rates are higher than a decade ago, Jill Fernandes, financial aid director at Cal U., said in an email. “Since 2010, the only federal student loan option available is the Federal Direct Loan program offered by the Department of Education.”
Scholarships are out there, but present an unusual dichotomy. Some are extremely competitive and some virtually ignored.
Stokan laments that more dollars aren’t available.
“Federal officials talk about student loan debt, but they keep cutting free aid dollars to students,” he said. “I believe higher education is the key to success for everyone’s future, but when you cut back on that, what choices do students have?”
W&J does what it can to contain costs, saying on its website: “We are committed to making our . . . education affordable by offering generous merit and need-based assistance to our students. . . . Typically, 99 percent of W&J students receive financial assistance, and the average financial aid package is $27,700 for the fall of 2012 entering class. Furthermore, 76 percent of this assistance is gift aid, which does not have to be repaid.”
Darcy, 27, regrets that she wasn’t more knowledgeable about collegiate finances heading into her freshman year at W&J – an error, she said, that many other high school grads make.
“You choose a school, you think about getting a degree and making money (and) you’ll be fine. You don’t sit down and do the math.”
Intervention at school and home, she said, could have alleviated her situation.
“My family didn’t go over the money situation with me. I had to learn on my own when I was in over my head,” said D’Arcy, who graduated from a high school in northern Virginia. “They also don’t teach you personal finances in high school. They teach you how to apply for college and how to apply for loans, but they don’t teach you the applications for that.”
D’Arcy got GATE loans while at W&J, but after graduating with degrees and debt, she decided to take a proactive approach toward her finances. It included meeting with a loan counselor and taking free debt-consulting classes.
“I was almost ashamed of my debt and decided to handle it on my own. Getting out and talking about it helped me.”
She learned to be thrifty. D’Arcy shares an apartment in Mt. Lebanon with a roommate and doesn’t own a car; she takes a trolley to work in downtown Pittsburgh. And several days a month, she gets a ride to Washington, where she makes extra money working at Three Rivers Auction Company, owned by an uncle, Tripp Kline.
D’Arcy also went to an income-based payment schedule, which, she said, saves her about $200 a month.
“I’m paying about $500 a month, and I may be paying another 15 years. But it’s manageable now.”
College is more manageable for Katherine Mansfield now that she is gone from Duquesne University, where she went about $50,000 in the red over two years. She transferred to Waynesburg last summer.
“I loved Duquesne, but it was way too expensive,” Mansfield said. “Halfway through last summer, my dad sat me down and said, ‘We have to evaluate whether we can afford this.’
“It’s so stressful knowing you have so much to pay back. Sometimes, I feel like I’m going to be 40 and still living with my parents while paying my loans back.”
During her final year living on The Bluff in downtown Pittsburgh, tuition, room, board, personal expenses and health insurance totaled nearly $42,000 a year.
Mansfield is the oldest of five children, and one of three who will be in college a few months from now. Sisters Jackie and Elizabeth, respectively, are a sophomore at Wheeling Jesuit University and a senior at Canon-McMillan High School bound for the University of Buffalo.
Echoing D’Arcy, Mansfield said, “I didn’t think about money while I was in high school. I had a lot of loans and an academic scholarship at Duquesne, but in retrospect, I should have applied for many more scholarships.”
She said she saved “a lot of money” this school year by commuting to Waynesburg from the family home in North Strabane Township. “I’ll also be an RA next year, which will help financially and be a good experience.”
Attending college with a friend, Angela Wadding, has been a good experience, as well. They met last summer as interns in the Observer-Reporter newsroom. Katherine is the daughter of staff reporter Karen Mansfield.
Wadding, from Dayton in the Allegheny Valley, is a senior who, like her pal, is majoring in communications with a specialization in print journalism. Photography is her forte.
She said she will graduate May 19 with about $14,000 in loans owed, a pittance compared with many contemporary grads.
“Some friends have $40,000 to $50,000 to pay back. I can’t imagine that.”
She said she hadn’t planned on attending college – “my parents pushed me” – and once there “didn’t know how much school cost until I got my first financial aid statement.”
Her personal cost has been diminished because she is a Bonner scholar. Wadding said it is a service-based scholarship, financed by the Bonner Foundation at about 60 colleges nationwide. It requires 140 hours of public service per semester, about 10 hours a week, and a grade point average at 3.0 or above.
As a senior, Wadding is concerned about “when the six-month grace period ends” and she has to start repaying the loans.
“It’s kind of terrifying, and a little daunting, but right now, I’m probably not as worried as I should be.”
Neither is Evan Kephart, who is in the same class at the same school and in a similar fiscal state.
“I’m not a financial guy, so I’m avoiding financials as long as I can,” said Kephart, son of the Rev. Craig Kephart, executive prebyter for the Washington Presbytery. “I look to graduate with roughly $15,000 in debt.”
Kephart likewise is a Bonner scholar who also got a Presidential Scholarship from the university. He also earned money as as RA for two years.
“I’m pretty lucky compared with most,” said Kephart, who was home schooled through high school and moved to Washington with his family last summer.
Courtney Cochran is the first member of her family to attend college, but her parents long ago embraced the potential benefits of higher education.
“My parents started saving when I was little. It wasn’t an enormous amount, but it helped,” said Cochran, a 2012 Cal U. graduate. She returned to campus for a master’s in political science, which she expects to get in December.
Cochran, 23, of Oil City, said she owes “a little less than the national average,“ declining to give a specific figure.
A graduate assistant, Cochran said she worked as a waitress each summer she was home and participated in work study as a junior and senior.
She also got to cover the Democratic National Convention last fall as a paid intern for Time Warner Cable news.
Being frugal was almost a religion to her.
“As much as I wanted to go to a mall sometimes, I had to think about saving. It’s important to learn how to budget your money and your credit.”
Cochran said she worked closely with the financial aid office to reduce interest costs, and her Parent PLUS loan is paid off. Her other loan debt will be deferred until after she completes her master’s.
Mastering collegiate finances is difficult. Cochran, despite careful planning, still owes money. But she has applied the reins and preaches a proactive approach to parents and students.
“Debt is something you have to deal with, but not something that should control you,” she said. “You control your student debt.”
Jessop Community Federal Credit Union