l STORY BY LANITA WITHERS AND ERIC COLLINS
Laura Humphreys considers her Ford Contour a godsend.
It doesn't matter that the car is a decade old. It's paid for, and that helps the 23-year-old professional direct more money toward something that's not: her college education.
The cost of higher education has more than doubled in the past 30 years, and more students are taking out loans to cover the price tag.
But the impact of paying back the debt -- which averages $18,900 for undergraduates -- can linger for years after a student's final exam. And people pursuing advanced degrees can dig themselves into a deeper hole: The average debt for graduate school is $31,700 beyond undergraduate loans, according to Nellie Mae's 2002 National Student Loan Survey, the most recent available.
Like many young college graduates, Humphreys is trying to whittle down an intimidating amount of student-loan debt by old-fashioned scrimping and saving.
Her salary -- in the mid-$20s -- doesn't leave her much wiggle room. Most nights, she makes dinner at home. She brown-bags her lunch and shuns nighttime movies in favor of cheaper Sunday matinees. She has no idea when she'll be debt-free. And that weighs on her as she considers going to graduate school.
"I'm at the point where I'm working but I don't know that I'm financially stable to start taking classes," she said. "It's kind of a crossroads as to whether or not I'd take out another loan to live off of if I decided to continue with grad school."
Humphreys' debt might not have been so burdensome years ago.
The cost of a college education has risen dramatically over the past three decades.
In the mid-1970s, the average tuition and fees at a public four-year institution were just $1,530, according to data from the College Board that has been adjusted for inflation.
This year, the average price tag is $5,491, an increase of almost 260 percent.
The average cost of a four-year private school has also skyrocketed, from $8,026 in the '70s to $21,235 this year, a jump of 165 percent.
With the higher cost has come an increased reliance on loans -- a major part of financial-aid packages.
College administrators urge people to put the debt in perspective.
"Even if you borrowed $17,000, that's less than a new car, and that's an investment in your lifelong working career," said Deborah Tollefson, UNCG's financial aid director.
In the UNC system, undergraduate students borrow an average of about $14,000 over four or five years, about 16 percent less than the national average for public universities, said Steve Brooks, executive director of the N.C. State Education Assistance Authority. At today's rate, that payment would be about $159 a month for nearly 10 years.
The College Foundation of North Carolina advises people to borrow only what is necessary, Brooks said.
"We encourage people to find out about grants before they look for loans," Brooks said.
Beyond student loans, credit card debt is also landing more people in trouble.
Credit card companies are much more aggressive at marketing to college students these days, said Paul McCollum, counseling supervisor for the Consumer Credit Counseling Service of Greater Greensboro. And with increased college costs, many use credit cards to fill the gap.
Some students who have relied on loans and credit cards to get through college run into trouble once the loan payments begin after graduation, McCollum said.
"That, on top of any credit card debt they've already been juggling, that's when it really can get challenging," he said.
Unrealized dreams
Some choose to take on more debt in graduate school. The payoff is not always financial stability.
Greensboro couple Cynthia Nearman and Terry Kennedy racked up about $70,000 in student-loan debt and $10,000 in credit card debt to get the graduate degrees they desired.
Though they feel lucky to have both found good teaching positions -- he at UNCG and she at Guilford College -- the debt restricts their lifestyle.
"We try to eat a lot of 99-cent frozen pizza," said Kennedy, 37. "We don't go on vacation unless we have somewhere we can stay with family."
This was not the life Nearman envisioned as she slogged through about 10 years of graduate school to get her doctorate in composition and rhetoric.
The 35-year-old assistant English professor dreams of world travel and summers spent writing books. Instead, she and her husband live paycheck to paycheck. She often works 12-hour days. He teaches extra classes at night.
"It's just not financially possible," she said about her wishes.
Kennedy, who has a master's in creative writing, said they are on the "20-year plan" to pay off their student loans. Without help from his family, they never would have been able to afford a down payment on a house.
He calls their 1930s, three-bedroom bungalow in the Glenwood neighborhood a "handyman special." But in owning it, the couple is ahead of the game.
"So many of my peers in my situation, it would be 15 to 20 years from now -- if ever -- that they could buy a house," said Kennedy, the assistant director of UNCG's Master of Fine Arts writing program. "Putting away $5,000 or $10,000, none of us make that type of money."
Kennedy sees how tenuous their financial situation could become.
"If something happened where one of us suddenly didn't have a job, the whole house of cards would tumble rather quickly," he said. "We don't make enough to put anything in savings."
Financial planner Ashley Madden often sees people struggle to balance their student loans with other goals, such as saving for retirement.
For people considering a return to the classroom, Madden said they should consider the cost versus the benefit.
"People looking to go to college or looking to go back to college really need to weigh out how much is this degree going to cost me in time, money and energy versus payout for my career," said Madden, a financial planner with Triad Financial Advisors.
Debt on the horizon
For those yet to make a dent in their student loans, the future can seem scary.
UNCG graduate student Liz Trump worries about paying off tens of thousands of dollars after she graduates in December.
Though the recently married 23-year-old is confident her master's degree in community counseling will lead to a job, she knows her salary in that field will max out around $40,000. The prospect of making a difference outweighs her income concerns.
"If I'm going to worry about money anyway, I might as well like my job," Trump said.
Both she and her husband, Matt, went to private schools for undergraduate degrees -- she at Duke and he at Wake Forest.
The couple live conservatively off the paycheck he brings home as a biologist for Carolina Biological Supply. She drives a Buick Century that she received when her grandmother stopped driving it. They rent a Greensboro apartment with only basic cable and dial-up Internet. She saves her credit card for car emergencies and books -- and she pays it off in full every month.
And though she doesn't yet have to make payments on her student loan, she sends in $25 a month.
"It just makes me feel like I'm contributing something," she said.
Trump said she and her friends don't talk about the student loans. They don't discuss how they'll be paying them off into their 40s. Or how there's no way to get out of them.
"I only assume it's manageable because so many other people have gone through it," she said about living with student-loan debt. "It doesn't seem manageable."
Source: www.news-record.com, Greensboro, North Carolina
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