Reality check for college students: Diploma in sight, loans on their mind
EDITOR’S NOTE: This semester WTVR.com has partnered with VCU’s School of Mass Communications “iPadJournos” mobile and social media journalism project. Those VCU students reported the following story.
By Annie Cocke and Katelyn Tatti (Special to WTVR.com)
RICHMOND, Va – Thousands of college seniors across Virginia will finally see their hard work pay off this month as they walk across the stage at their graduation ceremonies. For some, it will mark a poignant beginning to their future. But many college graduates will receive much more than a diploma. They will soon get the bill for their student loan debt.
According to the Federal Reserve, student debt now ranks ahead of both credit card and auto loan debt. Student loan and debt balances now sit at around $870 billion. It is estimated that the average college graduate owes around $23,000 in loans.
Karen Coleman, a finance professor at VCU, said that she has seen an increase of students working to compensate for rising debt. This amount of work and distraction from classes will deplete the overall experience and activities that students could be involved in.
“You don’t want to forgo a college education because the college education still has tremendous value. It’s much easier to get a job with a college education than it is to get one without. The unemployment rates are dramatically different,” said Coleman.
VCU graduate Patricia Sikorsky is one of the many students in the Richmond area who is experiencing this ongoing financial battle for her education.
“I recently graduated with my undergraduate at VCU just a couple months ago,” said Sikorsky. “Besides the $1,000 scholarship and putting up a fight, I am the only one who has contributed to my college expense, regardless of my parents ‘estimated family contribution’. My father liked to teach us hard work; however, my story ended up being a lot more difficult than it should have been.”
Sikorsky worked 30 to 40 hours a week and put herself through community college before transferring to VCU. She managed to keep a respectable grade point average and juggle work and family hardships before almost giving up her last semester due to lack of funds.
Sikorsky has recently become involved with a group called Virginia 21 that works to spread awareness and petition the state government to create regulations to help ease the amount of student debt across the commonwealth and improve education standards.
The Federal Reserve has now estimated that the total national student debt level will hit $1 trillion for the first time. According to a Rutgers University study, only 56% of the 2010 graduates had found a job a year later.
With such low employment rates, it has become increasingly difficult to pay back any amount of funds borrowed to graduate.
Richmond resident and VCU student Regan Mason finds herself in a similar situation. Mason comes from a single-parent home and has found it difficult to fund her schooling in the recent difficult economic times.
Mason first attended John Tyler Community College in Midlothian, Virginia. Through her commendable grades and strenuous work hours to pay for schooling, she was accepted to VCU last fall. But she was unable to keep up with payments and fell behind in school.
“If I had it to do over again I wouldn’t have gotten a credit card. I think I also would have tried to get more help. I have a single parent who is trying to help me, but at this point I’m about $4,000 to $5,500 in debt,“ Mason said.
“I have credit card debt as well. So trying to stay on top of paying for school is definitely a stressor. I am now about two semesters behind due to my debt,” she added.
“You want to be really careful about high interest debt. You just have to stay away from the credit cards, as tempting as it may be. At least the student loans are more manageable. Any type of high interest debt will just magnify that much faster and have a much harder effect on your finances,” said Coleman.
Coleman added that interest rates are low now, but if these rates start rising, there could be even more difficulties ahead.
“The good news is, I don’t think people are spending like they used to and people are thinking ‘I need to have the money before I spend.’ I think just being thoughtful about your spending is important and that is something that we are seeing and that I would advise people to keep being careful of,” said Coleman.
This story was reported by the “iPadJournos” mobile and social media journalism project, a cooperation between WTVR.com and VCU’s School of Mass Communications