Students' debt load surging, study says.
The debt taken on by college students to pay for their educations has risen three times as fast as the cost of living, according to new figures released Thursday by a student advocacy group.
The average loan debt among public university graduates who borrowed money grew 115 percent nationally from 1993 to 2004, to $17,250 from $8,014, the study by the Oregon Student Public Interest Research Group said. In the same period, the cost of living in the Willamette Valley rose 32 percent.
College costs have risen faster than medical costs, which grew 62 percent in the 11-year period.
"I have $30,000 in student debt, and that's just for four years of college," said Francisco Castillo, who graduated from the University of Oregon in June with a bachelor's degree in political science.
Students attending private universities have seen similar increases during the study period. The debt load increased 95 percent for students at four-year private institutions, the report said.
The report underscores the challenge faced by college students, who have seen tuition at Oregon colleges and universities skyrocket as the state cut higher education funding to deal with a serious recession. At the same time, federal aid has remained flat and state aid decreased until getting an infusion of funding last year.
Elizabeth Bickford, the financial aid director at the UO, said students there face an even higher debt load. In 2005, UO students who borrowed graduated with an average loan debt of slightly more than $18,000, which includes only federally subsidized loans and not private loans or credit card debt.
About two-thirds of all students take out loans to pay tuition and living expenses. Many also take part-time jobs to help cover costs.
The number of students turning to loans also has increased. In 1993, 46 percent of college students graduated with debt; in 2004, the figure was 62 percent for public university students and 74 percent for those attending a private school.
The rising debt load could prevent graduates from going into chosen careers and leave them struggling to make a living. An earlier report by the student group found that 23 percent of public university students graduate with too much debt to make their payments on a teacher's starting salary, and 37 percent could not manage their debt as a social worker.
Another study by the Commonwealth Fund found that two in five college graduates can't afford health insurance for at least part of their first year out of college and that 18- to 24-year-olds are the most uninsured age group.
Castillo, who is working as an OSPIRG organizer, said he'd like to work for a political candidate or organization, but getting his foot in the door would require him to start out at an unpaid or low-paying internship.
He's worried about the loan payments he'll face starting in five months and said that could force him to seek better-paying work in a different field.
"The main burden of that is that I can't pursue the job opportunities I originally wanted to pursue," he said. "It sort of defeats the purpose of why I wanted to go to college in the first place."
Bickford said the debt problem is one of the most serious financial aid challenges that schools face.
"We are very much aware it has been increasing," she said.
The federal government, while holding Pell grants flat for five years, did add two new financial aid programs that will start this fall.
One program provides additional aid in the freshman and sophomore years for students who complete a rigorous academic program in high school.
The other program provides aid to students who major in certain math, science and language programs deemed strategically important to the nation.
But Bickford said it's unclear at this point how many students will qualify for the aid.
The UO also is trying to raise $100 million for scholarships as part of its $600 million Campaign Oregon fundraising effort.
The university already has established the Dean's Access Scholarship, which provides additional aid to financially needy students who qualify academically for the Dean's Scholarship.
"The university's goal is to bring that price down for the neediest students," Bickford said.