My 90G College IOU
The Philadelphia Daily News
December 27, 2006
I’ve just started my senior year of college, and if things go as planned, this spring I will proudly accept a diploma that I’ve paid a lot of money for. Well, I haven’t paid for it quite yet. Actually, I owe $88,718.75 to various lenders—a sum I expect will take more than 20 years to repay. It’s a daunting prospect, but I tell myself that it’s a worthwhile investment. Fingers crossed!
How does a 21-years-old end up with such an enormous debt? For me, it was simply because I wanted to go to the best college I could, and, at the time I made the decision, I really didn’t fully understand the burden I was taking on.
As a senior in high school, I’d considered a range of colleges: I looked at some State University of New York schools, other state universities, and a few less expensive private colleges. But, in my heart of hearts, I really wanted to go to the best college I could possibly get into. I had it hard in high school, taking challenging classes and studying hard so I could earn good grades. I’d played soccer and joined after-school clubs to show community involvement. I’d practiced taking the SATs for months so I would score competitively.
I applied early decision to New York University, and the offer of admission came on a rainy November afternoon. I remember slowly opening the damp 8 1/2-by-11 envelopes, being ever so careful not to damage the life-altering information inside. When I saw the word “accepted,” I felt like my dream had come true.
Right away, my parents made it clear that the $40K-plus a year tuition and fees were far out of reach for our middle-class family. Though they both had respectable jobs—my mom is a teacher and my dad owns a small business—we live in a high-priced New York suburb, and our family had lots of other financial obligations at the time. They warned me that if I wanted to go to such an expensive school, I would bear the bulk of responsibility for paying the costs. At the time, it didn’t seem like such a big deal. After all, didn’t everyone take out loans to go to college?
With the help of my family, we figured out a way to make it work. NYU’s College of Arts and Science gave me an $8,000 yearly academic scholarship. I emptied my savings account and contributed $14,996.87 to my first year’s tuition. My mom took out a total of $22,764.93 in Parent Loans for Undergraduate Students (PLUS) loans to help alleviate some of the costs in my freshman and sophomore years. All four years, I was eligible for the maximum amount in Stafford loans—a federally subsidized student loan that does not accrue interest until six months after graduation when repayment must begin. I also received a $2,000 Perkins loan, another government loan that accrues a fixed rate of 5 percent once repayment begins 10 months after graduation, for the first two years. As a state resident attending an in-state university, I was awarded a New York Tap grant totaling $500 a year—not much, but every little bit helped. The rest—$52,665 at 7 percent interest—came from a private student loan from Citibank. Over the past four years, I’ve probably signed close to 15 loan documents, and the bottom line is this: I am left with $88,718.75 in student loans—all of which I’ll be paying back myself.
I take some comfort in knowing I’m not the only student saddled with such a responsibility: According to The Project on Student Debt, a non-profit research and education organization, more students than ever are using loans to pay for college, and their debt is at an all-time high—up about 60 percent over a seven-year period. Though the College Board reports that the typical student who borrows to finance a bachelor’s degree at a private, for-profit four-year college owes only $24,600, I’ve met plenty of other students who owe as much as I do—or more.
At this point in the school year, a lot of my classmates are counting the days until graduation. I’m a little less eager. While I know there won’t be dollar signs plastered on my cap and gown, I know they’ll be there. Instead of thinking about the money I will make after graduating from NYU, all I can think about is the money I owe.
At the end of the day, though, I’m still grateful for being able to attend my first-choice school. I’ve thoroughly enjoyed every bit of my college experience. I’ve taken interesting classes, made lifelong friends, and soaked up New York City along the way. As far as my future, I’m hoping that my diploma from a “brand-name” school will give me an edge in my career.
Did I make the right decision? Check in with me again in another 20 years. But if you ask me now, here’s what I’ll tell you: If I had to do it all again, I’d still make the same choice.
HEAD: COLLEGE DEBT BY THE NUMBERS
- The College Board reports that students borrowed a total of $14 billion from nonfederal sources to help fund their education.
- 80 percent of students at private, for-profit colleges have federal student loans and 14.9 percent have private student loans, according to the Project on Student Debt.
- The total funds (both federal and nonfederal) used to finance postsecondary expenses have increased 181 percent over the last decade, according to the College Board.
- Since 1993, the Project on Student Debt reports that there are 10 times as many graduating seniors with student loan debt equal to or exceeding $40,000.