Student loan debt in America has reached almost $1 trillion in 2012, according to The Federal Reserve Bank of New York.
The total student loan balances in the United States has almost tripled in the past eight years. In 2004, debt from student loans neared $350 billion, a fraction of the near $1 trillion in debt accumulated in 2012, according to the Federal Reserve Bank NY.
The Federal Reserve Bank NY reports that about 25 percent of borrowing students owe more than $28,000 while 10 percent of borrowers owe more than $54,000.
The Institute for College Access and Success, an independent nonprofit organization, conducted a study in 2011 titled “The Project on Student Debt.” The study determined that graduates from Texas had a state-wide average of $22,140 in debt per student compared to a national average of $26,600 per student.
The institute’s study found that 56 percent of Texas students graduated with debt compared to a 66 percent national average.
For students who have acquired loans to help pay for expenses while in school, the debt has become burdensome.
Haley Oakes, a full-time sophomore at Tyler Junior College has accumulated $11,000 in student loans in the past two years.
Oakes says the $11,000 of loans was used for expenses.
“The money was used to pay for a lot of things,” Oakes said. “Bills, food, gas and the likes. I don’t recommend that.”
When Oakes changed majors after her second semester, she realized her previous classes, paid for with loans, were no longer relevant for her new degree program.
“I ended up wasting a lot of my student loan money when I switched majors,” Oakes said. “Most of my classes I’d taken didn’t count for the new degree plan.”
For the past few months, Oakes has been working full-time and uses more of her income for school expenses.
“Since I have been full time I have used more of my personal income to pay for school,” Oakes said. “I had been using the money strictly for bills beforehand.”
The University of Texas at Tyler reported that 47 percent of its 2011 graduates were graduating with an average of $19,181 debt per student. Source: The Project on Student Debt – projectonstudentdebt.org
Julia Endicott, a full-time senior at UT Tyler, finds herself acquiring loans every semester despite receiving a scholarship and federal grants. She has about $40,000 of loan debt to date.
“They are used for living expenses throughout the year,” Endicott said. “I am an unconventional student, being that I am older than many students, I am married and have two children.”
She says the loans are worth it because it will help her to earn the career that will make her happy.
“I think it’s most important to do something in this world that makes you feel fulfilled and happy,” Endicott said. “In doing this, I am a better wife and mother. If it wasn’t for my student loans, I would have to work and pay for childcare, having less time for my family and my studies.”
Valerie Campos was a full-time sophomore at TJC when she moved to Arizona in the fall of 2011.
Despite receiving federal grants, Campos had to rely on student loans to pay for her education. She ended up acquiring a total of $25,000 in student loans.
Campos said her personal income was spent towards bills and other necessities.
“They were used for everything to help me get on my feet,” she said.
While some lenders give you a grace period to pay your loans, some lenders require you to begin making payments immediately after you have completed school or drop below half-time enrollment, according to Federal Student Aid, an office of the U.S. Department of Education.
“They already want money from me,” Campos said. “It’s overwhelming, especially when you can’t afford to pay it back at the moment. So when I get a better paying job and I can afford it, I will start paying back.”
Campos is considering returning to school with a different major choice and hopes to pay differently.
“I will do my best to find scholarships to pay my way instead of getting into more debt,” Campos said.
Danielle Parker, a part-time senior at TJC receives federal grants that usually pay for tuition and books, but has borrowed funds for other classroom materials and paying bills while in school.
In 2005, Parker earned a licensed vocational nurse degree from Panola College in Carthage, Texas. She and her family paid for that out of pocket and did not acquire any student loans. However, while pursuing a degree in graphic design in 2009, Parker began receiving student loans averaging about $12,000 per year.
“The loans I have used for computers, camera, software, equipment, and also to help with rent and bills,” Parker said. “A lot has gone for rent.”
Parker does not know an exact number of how much debt she has acquired, but said it is a lot.
“I’m scared to know exactly,” Parker said. “I would say close to $50,000 and I’ve applied for more to finish out this degree.”
Parker graduated with an associate degree in graphic design and photography from TJC and expects to graduate from TJC with an associate degree in web development in the spring of 2014.
Christina Gibson, a graduate Human Resource Development major at UT Tyler is the graduate assistant to Ona Tolliver, the assistant vice president and dean of students.
Gibson leads the Student Money Management program which intends to assist students with improving their financial literacy and to develop good financial habits during their college experience.
“The idea of the program is to educate our students and make them aware of their financial decisions,” Gibson said. “Most students don’t realize their financial situation until it’s too late.”
The program has had success in the past year by presenting to departments and organizations at UT Tyler.
“Greek life, residence life, student learning committees and new student orientation are just some of the students we’ve reached,” Gibson said. “We try to make the presentations very interactive and engaging by asking questions and getting the students involved so they stay interested.”
Students that pay for higher education with federal and private loans have little time after they graduate school before they must begin to make payments toward their debt.
The program conducts a survey before each presentation to get student feedback regarding their financial habits. After the presentation’s conclusion, a second survey is conducted to see what the students learned from the program.
“We know that if the students enjoyed the presentation, they were at least listening and are now aware of better financial habits and will take some of the things we said into consideration,” Gibson said.
Since the program does not currently offer one-on-one consultations, Gibson advises students to talk to parents or trusted adults on how to manage money because they have likely had experiences with managing money and creating budgets.
“Eventually we would like to offer one-on-one consultations, but that is the only part of the program that is still in the works,” Gibson said, “I tell students often, ‘live like a college student now, so you don’t have to live like a college student later.’ You don’t want to splurge now on luxury items, and then not be able to afford things after college when you are having to pay the money back.”
The Federal Reserve Bank NY is one of 12 Federal Reserve Banks of the United States that make up the Federal Reserve System. The bank works with the FRS and other public and private sector institutions to foster the safety, soundness and vitality of the country’s economic and financial systems, according to newyorkfed.org.
At UT Tyler, the Office of Student Affairs handles a variety of student issues and policies. Student travel, student disciplinary issues and academic graduation preparation are among the services offered. It also reigns over Student Life & Leadership, Career Services, Judicial Affairs, Student Services and Veterans and Military departments.
For more information regarding the Student Money Management program, Gibson advises students to visit their webpage at uttyler.edu/studentaffairs/smm.
The Student Money Management program also has a twitter account where they broadcast financial advice at twitter.com/UTTylerSMM.