We're all told when we're young that the goal for us is to ultimately go to college and graduate with a degree. But is it really worth it?
Is it worth going tens of thousands of dollars in debt to get a degree? On its face, most people would likely answer in the affirmative, but looking beneath the surface and examining the details and intricacies that exist with borrowing money for school, some might be tempted to change their minds. Today, many people in Ohio and across the U.S. are borrowing money so they can attend college. According to The Project on Student Debt, the current balance of federal student loans nationwide as of May 2012 was $902 billion, with an additional $140 billion or so in private student loans. The organization claims that the average college student who attends a university in Ohio owes an average of $28,683 – seventh-worst in the nation.
Abbey Schell, 25, attended the University of Toledo for two-and-a-half years, accumulating 40 credit hours before taking a break for five years. The 2005 Clay High School graduate resumed her studies at Owens Community College during the fall semester of 2012.
During that five-year period, she was burdened with having to pay back money to Sallie Mae, the company with whom she received her loans.
“What I ended up doing (after high school) was going to Sallie Mae and taking out the loans,” Schell said. “I almost had to beg my Grandma to co-sign. I just didn't want to be left behind – my friends were all going (to college), but the reality of the situation didn't penetrate my brain. It didn't hit me until a year (after I left school) after the company contacted me to pay them.
“My interest rates (with Sallie Mae) are just under 1o percent. Sallie Mae was after me like you wouldn't believe. They gave me a year (to adjust) and, at first, I paid a $150 processing fee to delay things for a three-month period. That was better than paying $900 over three months. With a rent payment, car payment, food and everything else, $300 per month is quite daunting.”
Schell notes that getting loans through the government has been less stressful.
“My government loans are at about 6 percent. I did have a few loans through the government and they looked at my income and they gave me (some flexibility). I was given a $3,500 grant and received some subsidized loans when I went back to Owens,” Schell said.
Schell offers an interesting perspective, one that is quite different from what people are told at the age of 18.
“After high school, you're offered scholarships,” she said. “And that's to get you in the door. It's hard to turn down those scholarships. If you think you can handle it, if you're academically gifted, give it a shot. But if not, take a break, work at a job and learn the value of money. Because in high school, you don't live on your own. I'd recommend taking a break, experience the world and when you have some of the skills, like time-management and organization, go back to school.”
Constance Perkins, 23, is a 2006 graduate of Eastwood High School, who is currently employed at Kohl's in Perrysburg. Perkins, who owed $30,000 when she graduated from Bowling Green State University in December 2010, was fortunate enough to get all of her loans through the government via Free Application for Federal Student Aid (FAFSA), an office of the U.S. Department of Education.
She began paying back her loans within six months of her graduation. She is currently on a 10-year payback plan, paying roughly $280 per month. Though she works only part-time, she lives with her parents, something that helps to keep her expenses down.
According to Perkins, the accumulation of interest is quite high.
“It's frustrating,” she said. “You're paying a lot more (in interest) than the amount you're in debt for. That's what kills you.”
Sarah Wilhelm, a 24-year-old who attended Michigan State University for a semester before transferring and graduating from BGSU in December 2011 agrees.
Wilhelm, a Perrysburg High School graduate who currently lives and works in Dayton, spoke about some of the challenges that come with having to pay back loans that total about $30,000.
“It's definitely a burden to know I have these monthly loan payments that are now about $500,” she said. “Until I am able to pay them off, they (the loans) will always factor into any future career or education decisions I make. If I want to go back to school, I will have to work while doing so in order to afford it.
“There is a certain lack of freedom that comes with owing this much money,” she said.