Rinamay Rhoten, Staff Writer, @rinamaylopez with Additional Reporting by Nicole Shepard, News Editor, @NicoleEShepard
The rise in tuition costs is breaking the bank for more than just college students; studies show the economy suffers too.
Most students are stereotyped as perpetually broke, but the increase of tuition can be damaging to the nation’s economy.
Universities across the nation, UVU included, are increasing tuition rates. In the past decade, the average four-year tuition cost has increased by 44 percent. With the economic downturn of recent years, paying for school has never been more difficult.
“I’ve tried really hard to not take out any loans,” Michael Delareau, a senior studying business management, said. “I’ve always worked full time and tried to stay out of debt. But it’s my senior year, and I need to focus on my last year, so I can’t work. These loans scare me though. I’m already stressed out, and I don’t even have as much as most people.”
Many students rely on government aid for help. According to the Columbus dispatch, in the last year FASFA applications rose 11 percent. This is a major issue the nation is facing. Average enrollment in schools has increased to 34 percent, while public spending has decreased by 30 percent. This is creating a heavy weight for the government and bloating the national deficit.
It’s difficult to ignore the problem of how many students are going into debt to pay for school. Student debt in the United States is now at 1 trillion dollars according to the Federal Reserve Bank of New York and increasing the debt by 310 percent in the last decade, according to the Pew Research Center.
The burden of paying back student loans proves heavy for more than graduates. Students with costly loans can’t afford to be picky when choosing jobs. As a result, they feel that they must take the first job they find. Many times they get stuck in dead end jobs for years, living paycheck-to-paycheck, dealing with increasing interest rates.
After graduation, graduates are forced to put their dreams on hold. Pew Research Center found that 47 percent of student loan debtors have a yearly income of less than $60,000 a year. This group is also grappling with an 11 percent increase in credit card debt over the last five years in addition to their student loans.
Stifling debt and limited options have caused students to feel they will never have the careers that they planned on. Just under half of all college students polled by the Pew Research Center said their debt has made it nearly impossible to avoid accruing further debt. Another 24 percent admitted their debt influenced their decision to settle for work outside their educational training.
“I trained in fire science,” Jared Sadler, UVU alumnus, said. “I wanted to become a firefighter. It’s been almost six years, and I still haven’t found a job. But my debts have been calling my name so I’m stuck delivering furniture.”
According to the National Association of Home Builders, student debt also affects the housing market. When a person has too much debt their credit score will make it difficult to get a loan for a home.
“I really thought we’d have a house by now,” Katie Bingham, UVU alumna, said. “My husband and I had a plan when we were still in school of how we’d work for four years, pay down our loans, buy a house and have kids. It hasn’t worked out that way. I’m not sure that day is coming.”
People who have heaping student loan debt are also more hesitant to get married or make a major personal commitment. For example, for every $10,000 of debt, the chances of a debtor getting married drops 7 percent.
Some students are taking out more student loans than others. Only about 57 percent of high income families say they are ready to pay for children’s education before they enroll, about 60 percent of students from lower income households take on student debt.
Economists agree it’s a positive sign that more people are interested in receiving an education. The problem is that people are simply not putting their money where they used to, investing in houses or other assets.
Today most money is going towards paying off debt. Though an education is traditionally seen as a positive investment, if the cost becomes so high that the individual cannot place stock in any other venture, education debt functions as more of a black hole.
The Financial Stability Oversight Council reported the reaching effects of student loan debt on the economy as a whole by leading to “dampened consumption.”
“The major problem as I see it,” Dane McLanders, a senior studying economics, said, “is that when money gets tight, people do the smart thing and try and save. But what’s smart for the individual isn’t always what’s best for the whole. Mass amounts of people saving can hurt the economy because it can’t function without active trade.”
While most people pay the minimum on their student loans, over half say they do not have extra money left over for much else.
“I’m a college graduate and I’m still only making $10 an hour,” Melanie White said. “Everything I make goes straight to my student loans, and I’m still barely paying over the minimum. I can’t do anything else besides pay my loans and pay my rent. Food that isn’t Ramen is a luxury. And it’s not even that bad for me; I have friends that still have to live with their parents because they just can’t make it.