Tuesday | May 22, 2012
Students Work To Pay for Tuition, Avoid Debt
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By
Jennifer Nalewicki
11 March 2004
(U-WIRE) AUSTIN, Texas – Melissa Salinas could get by financially without having to take out loans during her first semester of college. But all this will change for the University of Texas-Austin business management senior this upcoming semester.
“I was really hoping to stay away from loans,” she said. “But this spring I will have to get them.”
Currently Salinas holds a part-time job at the Texas Union Campus Store, but in order for her to put more concentration into her studies — which she says is getting harder to do — she doesn’t plan on working next spring. That will leave a good-sized hole in her finances that cannot be completely filled by the $2,000 she gets annually from her Longhorn Opportunity Scholarship, an award given to students who attended underprivileged Texas high schools, and the little money she gets from her parents.
“Right now my paychecks cover my food costs, utilities and cell phone bills,” Salinas said. “Tuition is due soon, and my mom will have to shift around her bills in order to help pay for my schooling.”
Salinas sees taking out loans as her only option, but like many students, she is hesitant to do so for fear of going into debt before she gets a job.
“I know with the poor economy I am not going to get the best [paying] job,” she said. “Plus, my parents expect me to help pay for my younger brothers’ educations after I graduate, which is something I want to do since they look up to me, and they want to attend UT too.”
Salinas is not alone. Every year, more and more students and their families are turning to loans as a way to compensate for their lack of money to go toward higher education.
According to The Chronicle of Higher Education, 64 percent of students attending public four-year colleges receive loans. Of them, 39 percent said their debt levels are so unmanageable that they absorb more than 8 percent of their take-home pay.
David Peterson, a UT alumnus who graduated in August, knows first-hand the repercussions loans can have on students and their families after graduation.
“Right now, I am $13,000 in debt,” Peterson said. “My parents did help out to an extent, but they were also putting my stepsister through school too.”
Incurring excessive debt is no new trend for college students. During the 1999-2000 academic year, the average debt for a full-time college student at a four-year public institution was $16,243, up from $9,188 in 1992-1993, according to a study done by the Texas State Private Interest Research Group’s Higher Education Project.
At the University of Texas, the average indebtedness for undergraduates who graduated last spring was $15,800, according to the Office of Student Financial Services.
“Student debt has been marginally increasing nationally,” said Henry Urick, assistant director of the OSFS. “[This] has been occurring ever since I started this job 20 years ago.”
One cause is that the federal government offered grants and loans to students more than any other type of financial aid during the past two decades. Grants were offered 45 percent of the time, while loans were offered 52 percent of the time.
By 2000, the percentage switched to loans representing 58 percent of aid and grants roughly 41 percent, according to a National Center for Public Policy and Higher Education study “Losing Ground.”
Because of this switch, students and families classified as being middle class – $25,000 to $75,000 in annual income — often receive financial aid in the form of loans, since their estimated financial contribution is based on family income and other assets.
“Sometimes all we can offer the middle class are loans,” Urick said.
This leads to a frustrating reality for many middle-class students.
“I know people in the lower class that have $2,000 left over from their grants, and they spend it on cars, rent and [textbooks],” Salinas said. “Meanwhile people in the middle class can only get loans. I think the government needs to put more focus on middle-class families. They think we make enough money, but we don’t.”
Many students are hesitant to take out loans for fear of going into debt, especially when considering the possibility of purchasing a home or some other large investment after they graduate.
Sarah Munshi, an undeclared sophomore, could only qualify for loans, since her family is classified as being in the upper middle class by the government. She is opting to hold a job while attending the University along with using money from her Internal Revenue Service accounts and other investments to pay for school, since her parents don’t help out with tuition payments.
“The last thing I want is debt on my name,” Munshi said. “I definitely refuse to have to pay interest.”
Urick feels that being in debt is something students and their families can avoid altogether by making certain lifestyle changes which he calls “deferred gratification,” such as cutting back on living expenses.
“You can choose to put off getting a cell phone or buying a car until you get a job,” he said. “Sometimes you need to make lifestyle choices in order to make an investment such as an education.”
But do these lifestyles changes really make a difference when the costs of cell phone and car payments are much less than an paying for an education?
After working 90 hours a week at several jobs over the summer, Munshi was exhausted. She didn’t find working the excessive hours worth the money she was earning.
“Other employees would mention all the time how tired I always looked,” she said. “I didn’t have a choice. I don’t like working and going to school at the same time.”
Like Munshi, Salinas also made a change in her lifestyle. After majoring in international business for several semesters, she switched to business management after talking to people at a career fair who said she would have a better chance of getting a job if she changed majors. She took their advice.
“I know [my parents] struggle a lot to put me through school,” she said. “I want to do something to help them.”
If it means taking out loans, she will.
Copyright ©2003 Daily Texan via U-Wire
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