Graduate student debt is skyrocketing

Tom Lopez

Graduate and professional students across the country face mounting debts with no relief in sight. Since 1993, borrowing jumped 74 percent.
“I think it constitutes a prospective crisis on the horizon,” said Anthony Rosati, the information exchange coordinator for the National Association of Graduate and Professional Studies.
Rosati is concerned with the increasing loans graduate and professional students are taking. Educational loans are becoming more difficult for students to pay, which Rosati said constitutes an unfair burden on students.
According to “Graduating into Debt,” a study released this June by the Education Resource Institute and the Institute for Higher Education Policy, graduate and professional student borrowing has climbed from $4.4 billion in 1993 to $7.7 billion in 1995. Rosati thinks this reflects a variety of problems that graduate students face. The results, he said, may be disastrous, both to students and to the nation as a whole.
“Anything that reduces the ability for our population to be educated, or makes getting a degree — particularly an advanced degree — less attractive, means that we’re going to lose our edge,” he said. “And that means that in the future, we’re not going to be able to command the world economy.”
According to a press release from the National Association of Graduate-Professional Students, since 1990, students have borrowed as much as the total amount of all the student loans of the previous 30 years combined. “A new debtor class seems an inevitable result of these trends,” said Kevin Boyer, the association’s executive director.
Rosati said this potential crisis is the result of two primary trends — decreasing government aid and increasing student expenses, often in the form of student fees.
“Federal money that in the past has been provided to graduate and professional students, in the form of grants, fellowships and scholarships, has gone down dramatically in the last 25 years,” Rosati said. “In addition, universities have shifted priorities in how to get away with charging more money out of students, and they’ve gone the fee route.”
Rosati said that depending on the school, fees can range from $20 to hundreds of dollars per quarter.
He added that this use of fees is particularly harmful to graduate and professional students because fees are not taken into consideration by the government when it calculates financial needs. “The universities’ attempts to make their schools look good by having lower tuition has screwed graduate and professional students who are dependent on federal and state accounting methods for doing need analysis, because those fees can’t be counted as part of the cost of attendance.”
The problem of burgeoning student loans is one that, according to many graduate and professional students, the University of Minnesota has not escaped. Sean OhmsWinnie, the legislative liaison for the Graduate and Professional Student Association, is concerned that once students complete their educations, they won’t have the means to pay their debts.
“Many students are facing fields where salaries haven’t risen as dramatically as tuition has,” he said. “A lot of students are striving for a higher ideal, but they end up shooting themselves in the foot.” OhmsWinnie added that as a veterinary student, he has been reading in journals that older veterinarians have been complaining of incoming veterinarians having to carry heavy debts. “They don’t know what they’re in for,” he said. “My peers and I are going to be graduating with debts in the six figures.”
However, Sheryl Spivey, the director of the Office of Scholarships and Financial Aid, said that the problem is not confined to the graduate and professional schools. “Loans for all students are rising,” she said. “It’s very scary. Students are coming out of school owing the amount of money that our parents paid for homes.”
Like Rosati, Spivey attributes the problem to a lack of government funding, saying that “universities all over the country are strapped.” However, she also believes that part of the problem lies in students borrowing more than they need — and digging themselves in a hole as a result.
“Some students borrow recklessly,” she said. But there are students, who take loans out of necessity, she said, “because they have no other means of attending school.”
To combat the problem, the office has a counseling program to educate students about responsible borrowing.
But once students do take out loans, it is important to stay in touch with the bank, said Glen Herrick, vice-president of Norwest Bank’s student loan center. “I would advise students to maintain contact with their lending institution,” he said. “More so now than in recent years, lenders have more options, different repayment plans. Students who lose contact with their lending institution pass up a lot of repayment options.”
But despite rising debt burdens, student default rates are declining, Herrick said. Default rates — students failing to pay off student loans completely — are steadily decreasing after rising in the 80’s. In the latest fiscal reports, student default rates were at 11.6%, down from the record of 25.8% in 1989. Herrick attributes this decline to banks doing a better job of loan collection, as well as better screening of colleges and universities for eligibility. “There are always a few for-profit schools that are abusing the program, through fraud or waste,” he said.
Rosati said that part of the solution to the problem lies in increased government funding and cooperation between the school, state and community; but students should also be given the opportunity to pay their loans. “We have to find a way to allow students to find employment that doesn’t conflict with the education process,” he said. “It’s not as simple as vote this guy in’ or spend more money.’ You can’t spend enough money to solve the problem.”