Sarah Feit, a pharmacy graduate student in her third year at the University, said she spends her free time hanging out with friends, going to bars and occasionally eating out.
She said she does not worry too much about spending money, despite owing the University $55,000 in student loans.
“We don’t go overboard to the point that we struggle to pay rent,” she said.
For Feit and many other University students, debt has become a part of college life. The average University undergraduate who graduated in 2003 accumulated $11,582 in debt. The numbers for graduate students are nearly twice as high.
Students accumulating student loans and credit card debt might not realize the potential problems of borrowing money, some financial experts say.
“My advice to my students is to cut up their credit cards and cancel their accounts,” said Peter Rosko, a retired professor who taught finance courses in the University’s Carlson School of Management. “I despise credit card people. They make it easy to get the card, but students run up a lot of debt.”
M.E.G. Paez, a loan unit manager in the University’s Office of Student Finance, said some students take out student loans to pay off credit card debt.
“That is not what student loans are designed to do,” she said.
She said students with large loans might be forced to accept unwanted jobs just to pay back the debt. The amount of debt can be a deciding factor in the type of house or car students can buy.
“A lot of students don’t know the long-term implications of borrowing money and how it could affect their quality of life,” she said.
Paez said the number of private loans the University has granted doubled between 2001 and 2003, largely because the caps on federal loans have not changed since 1986, despite large tuition increases.
Credit card companies such as J.P. Morgan Chase have offered free merchandise in exchange for completed credit card applications on campus since school began last week. Many students said they cannot resist the temptation of free stuff.
Ben Greshwalk, a sports studies junior, filled out a Chase credit card application for a free T-shirt, but he does not plan on accepting the card. He said he already owes $2,000 in credit card debt, but he will not worry about it now.
“I’ll pay it off when I graduate,” he said.
There is no obligation for students to accept the cards, Chase officials said.
Monday was the first day of Gov. Tim Pawlenty’s College Savings Month in Minnesota.
During the month, representatives from the Minnesota College Savings Plan will hold a series of events to raise awareness of the state’s 529 investment plan. Those who invest in the plan can use the money they invest and earn for education expenses.
For students such as history sophomore Adam Afseth, who said he owes approximately $10,000 in student loans and $1,200 in credit card debt, a savings account might have come in handy.
“(My debt) worries me … Without summer income, I can’t pay it off quickly,” Afseth said. “I don’t consider it a burden. I stress out over not having cash at hand. I would say I’m not that bad off compared to some people.”
Adam Rothering, an architecture junior, said he has two major credit cards with balances of approximately $4,500 total. He also owes nearly $4,000 in student loans but said he is not worried. Rothering plans to take out a student loan to pay off his credit card debt because the interest rates are lower.
“I think people worry about (money) too much,” he said. “It’s just money.”
