The Digital Collegian - Published independently by students at Penn State NEWS
[ Tuesday, April 5, 2005 ]

Study: Students face higher debt burdens

By Christiana Varda email
Collegian Staff Writer

After he pays his rent this month, Jason Nowacinski will have $7 left in his savings account.

Nowacinski (freshman-history) lives off campus and has been working at Say Sushi, 310 S. Allen St., four nights a week since the beginning of spring semester. He gets paid about $8 an hour, and sometimes $12 to $16 on busy nights.

But Nowacinski still finds it hard to meet his expenses and will need to take out a student loan next year to meet tuition, room and board costs.

"It's harder to get through school if you're working -- especially four nights a week -- but it's something you have to do," he said.

A new study released by the U.S. Department of Education suggests that increasing tuition, higher borrowing limits of government loans and a new wave of low-income students have increased the average debt burden for undergraduate students.

The study was based on government figures and a nationally representative survey of students who received bachelor's degrees. The study cites an "immediate and dramatic" rise in the number of students borrowing money in the 1990s.

On average, undergraduate students borrow $19,300, an increase from $12,100 a decade ago.

The study also indicted that students from all income groups are taking on debt to go to college. In 2000, 46 percent from the top income tier reported borrowing money, an increase from 24 percent in 1992-1993, according to the survey.

The study also showed students from lower income families have taken on a greater loan burden -- 72 percent in 1999-2000, an increase from 67 percent in 1992-1993.

"For some people, having to work while in school may not be a bad thing if you can manage your time well," said Cathy Bowen, associate professor and consumer issues specialist. "It also takes a level of responsibility -- if you're working to pay off that loan you realize the value of that education."

Kiersten Walker (senior-advertising and public relations) is on a scholarship that covers tuition and room and board, but she has friends who have to work to meet all those costs.

"Taking out a student loan is twice as hard for students, because you're working to stay in school," she said.

Bowen said students should look into their options before taking out a student loan.

"Each situation is different," said Robert Snyder, the Office of Student Aid's administrative services director. "What I would encourage the students to do would be to contact our office and to speak with a representative or contact a representative at a campus location, and go over what some of their options may be."

With rising tuition, the number of students applying for student aid has increased, Snyder said. About 78 percent of students at all campus locations receive some form of student aid, but student loans make up some of that number, he said.

Trent Fulin (senior-health policy and administration) said student loans give many students the opportunity to attend college.

"For some students it's the only way they can go to college," Fulin said. "Tuition is going up, especially for out-of-state students, and something needs to be done about that."

Nowacinski said taking out a student loan scares him a little, but it will be better in the long run. He is aiming to keep the amount he owes to $15,000 to $20,000 by the time he graduates.

"Debt is debt. If you have it, you have to pay it back," Bowen said.


 

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