College debt affects more than just students, can put off important life decisions
Falcon News Service
December 2, 2015
Editor’s note: Total student debt in the United States now tops $1.2 trillion, a financial burden that has wide implications for the economy and society. In a series of stories, student journalists of the Falcon News Service examined what student debt means at the University of Wisconsin-River Falls.
College students across the U.S are taking on debt from the institutions they attend. But for some, it’s not just themselves they carry into debt but also their loved ones, as the parents of students are also feeling the burden.
Trouble like this starts with statistics, such as those from a survey conducted in 2014 by the Citizens Financial Group. The survey asked 5,000 college students and parents about higher education debt.
A substantial 94 percent of parents said that they feel the weight of the debts from their children. Forty-five percent of parents surveyed said they do not have a plan to manage the debt. The survey went on to remark that 70 percent of these parents also feel that the investment will not pay off in the future.
Student debt may affect a wide variety of plans in one’s life, said Robert Bode, financial aid director at UW-River Falls.
“There are studies that are being done that show that students are delaying a lot of life choices because of the student debt they have taken,” he said. “You have reports of students not getting married, not getting children, not buying houses. You are seeing some impact of that.”
Bode works with students regularly on campus to help manage how they approach repaying their debts.
Average debt for graduates of UWRF in 2014 was $27,134, according to The Institute for College Access & Success, a nonprofit and nonpartisan research, analysis and advocacy organization. A total of 76 percent of UWRF students graduated with debt.
The average debt at UW-River Falls was a little less than the national average for graduates, $28,950, but problems can persist for anyone getting out from under the financial burden.
Students coming out of college will have to enter payment plans for their debt, which can range between paying $61-$466 per month, though lowers payments result in longer time that interest is built up, according to Bode. It comes down to either paying more each month to get the debt cleared quicker or paying less each month and then gaining more to pay off in total.
And this debt hits right into the bull’s-eye that is family.
The non-profit organization American Student Assistance in 2013 looked into effects that student debt has on family and life decisions.
The organization found that millennials age 18-29 had decreasing interest in getting married, saying that many are seeing it as a “capstone” rather than a “cornerstone” in their life, according to the report. Further problems that occur later can be saving for one’s own children when they go to college, putting money towards a retirement fund, and even simple paying off other debts, like credit cards and car loans.
The problem of student debt can also scare prospective students from taking out big loans for college, according to Bode, as they might have doubts that they can pay it all back.
Connie Vonch, a resident of Red Wing, Minnesota, will enter Minnesota State University, Mankato next summer. Tuition and fees at the school are around $3,900 per semester for a Minnesota resident. Vonch has seen what her eldest sister has gone through with college and said she hopes she doesn’t fall into the same mistakes.
“My older sister is struggling to pay off her student debut. She didn’t really think about college until it was too late,” Vonch said. “It kind of started a ripple between my elder sister and my parents. Where I pocketed my high school graduation money for college, she spent it. My parents I think are just disappointed in her, but they still love her and want what’s best. My dad has stopped giving her large amounts of money to help her with college.”
Vonch plans to stay with her parents while she is going through college, but says that she plans to work through much of it and use the money she got after graduating high school for good use.
But pressure is still felt by Vonch as she is about to enter college.
“Where I have always wanted to be a marine biologist, my parents are worried about me, too,” she said. “Becoming a marine biologist takes time and money.”
Vonch has said that she will enter a four-year college eventually and has stopped smoking to save money, though she admits that her social life might take a backseat to grades and sleep.
“If I worried too much now, it will cause more stress or depression,” she said. “I need to be positive and self motivated to get through this and on with my future.”
In the end, she hopes to not regret her choices.
“I wish that after college, I didn’t make a mistake about choosing marine biology,” Vonch said. “I chose it because I love it and if some day I don’t love it, I think it’d hurt because I wasted my college.”
Debt can exacerbate family concerns, scaring students from their plans to start families soon and causing schisms with immediate family members who feel they are getting the brunt of the work from their children.
Despite that, Bode said that from his experience there is no debt that cannot be unpaid, and with the right payment plan fit to each person and their financial situation anyone can escape the seemingly large wave of repayment.
“There are ways to manage the repayment of that debt and students really need to know of those options as they begin to repay,” he advised. “The worst thing to do is to just stop making payments and go into denial, saying you won’t open that letter you think is from the insurance company and you think contains loan information.
“Once you start down that road,” Bode said, “it is very hard to return from it.”