COLLEGE DEBT: What is the Real Cost?

January 23, 2020 | PBAT MAGAZINE

By Erika Alba, Iris Feng Cen, Rong Chen & Miguel Marin Ruiz

 

 

“I spend my whole life after graduating and while I was in college. Paying for school. I am 34 and I started paying for college out of my own money when I was 19 years old.” recounted media arts teacher Ms. Jillian Leedy from Flushing International High School, as she shared her story of how she is still paying  her debt from college. She started off for her bachelors degrees at least $20,000. She had to take out loans because she did not get any help from the government since on paper her parents made together almost $120,000 a year, but in reality her mother was very sick and all the money went to her medical bills, paying for house payments, car payments, care for her sister and her. 

But she is not alone, according to CNBC News Nationwide, college student loan debt was $517 billion in 2006 and 2019 the college debt is $1.5 trillion with more than 44 million borrowers who now owe money. The drastic increase in college debt in the U.S. has many causes and if not resolved will cause serious problems for the society. It’s affecting adults and college students.

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Google Images

 

 

Colleges are Raising Costs Too Much Too Fast 

 

College Costs are too high which is causing students to take on too much debt.  According to Value Penguin for 2019 the average tuition for 2 year public school is $3,570  every year, for four year school is average of $9,970 each year, but the average cost for out of state students is $25,620. The cost of a private 4 year college is even more expensive with an average of $34,740 per year. (Chart 1) 

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Value Penguin, 2019

Taking into account tuition, room, board, and fees across 2,312 public and private colleges and universities in the U.S., the average price of an undergraduate degree increased $63,973, or roughly 161%, since 1987. (These numbers and the rest that follow have been adjusted for inflation)

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At the beginning of 1991 the tuition rate and the salary for minimum wage was about the same level, for the tuition rate for public university was 25.936% when for the minimum wage is about 22.234%. There wasn’t a big difference between the salary and the tuition rate. After 25 years the rise of tuition increased by 157.376%  for the public university and for the private university it has increased by 119.507%. On the other hand the salary for minimum wage and for early career salary has not increased over 10% over the 25 years. There is a big difference between the amount in the adjusted inflation (the money that we make) in comparison of tuition increases. 

Comparing the cost of college cost in the past from the college cost now for a Suny four year college. Valuepenguin states Since 1977 until 2018 the cost of private colleges has gone up to $46,950  from $8180 since 1977 which is about $29,940, it is the same situation for the public institution since 1977 it has gone up a $20,770 which is $12,590 in just two decades as well.  

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In only 40 years, the average cost of college, including tuition and room and board, has increased over 150% for both public and private four-year colleges. Between 1977 and 1978, the average cost of a four-year degree from a public school was $8,180, while the cost for a nonprofit private school was $17,010. The cost is now more than twice that amount and is moving up to three times that cost (Chart 3).

The price of private college and out of state college has become a barrier for many students. FIHS Alumnus Xianle Jin is a senior at Babson College where she is majoring in Business Administration with a focus on Business Analytics was able to attend Babson, is a private college in Massachusetts, because she was a recipient of the POSSE Scholarship. In recounting her college costs Xianle says that for every semester she would have to pay $26,000 if she did not have her scholarship. There are additional costs for insurance, meal plans, housing and adds up to $35,000 every semester. Her housing is $6,200. Meal plan $2,800. Additional expensive are textbooks. “There are a lot of expenses out of pocket if I didn’t have my scholarship, and I would probably have attended like CUNY or SUNY in that respect,” siad Xianle. She has also friends that did not get a scholarship. When she went to study abroad in Japan, she met students from many different colleges, “I know some people that have to take $30k or $40k every year just to be able to stay you know just to keep paying for their tuition. And the tuition is only increasing, some of my friends from the trip that are from Babson had their tuition increased by like $6,000 just this semester!

Endless Paying 

 

Media arts teacher Ms Jillian Leedy took out a loan from the student plus loan with a high interest. Her other two government loans have a lower interest rate but they are a bigger loan amount, so she stills needs to pay a lot of money. She would need to pay at least $150 a month, that's only the interest it's not anything that she has borrowed. Every time she took out money because of the interest rate the amount of money gets bigger.

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Jillian Leedy still has three loans from the government that she needs to pay. Its at about $47,000 right now is what she owes for her graduate school, but thats with the 50% scholarship. she quotes, “as a 34 year old I would say it just kinda feels like I’m under this pressure. I have close to a $650 payment or more every single month and that’s going to continue for the next 10 years of my life.”