Monday, December 8, 2008

College Debt Makes Beginning a Career Difficult

By Ashley Savard

Many students coming out of college are now faced with overwhelming debts with little hope of paying them off.
"I definitely don't think I'm currently making enough to pay off student loans after graduation," Amy Lynn McCracken said.
Loans have become the primary means of paying for education, and with the cost of tuition increasing at twice the rate of inflation, according to Smart Student Guide to Financial Aid, it is becoming more difficult for college graduates to pay off their debts.
Private loans, which carry higher interest rates than federal loans, have increased by 734 percent since the previous decade, according to The College Board.
A number of college graduates have a hard time finding jobs that enable them to pay off their loans quickly and with ease.
About 8 percent of college seniors had loans amounting to $40,000 in the year 2004, according to the Project on Student Debt.
Some graduates, such as Tom Aldrich, found that jobs can pay enough to live on while paying off loans.
"The job fortunately allows me to live comfortably and pay off student loans," Aldrich said.
Aldrich is a graduate of Stonehill College, works for Sandler O'Neill & Partners, L.P.
"I believe having a college degree should require a higher pay because that degree was an investment that opens doors to greater opportunities," Aldrich said.
Kimberely Roussin, a Stonehill College graduate who works for Commonwealth Medicine, said that beginning wages should be higher to help students pay off their loans when they first enter the work force. Roussin began working in the social work field making $17,000.
"Money was tight. I think being in the workforce for 20 years has allowed me to attain a decent salary so I can now live comfortably without any loans," Roussin said.
Tim Gannon, a senior at Stonehill College, said entry level salaries are pretty fair, depending on the degree.
"Most students going into the work force with a degree have an idea about how much money they're going to make and plan around it," Gannon said.
Gannon said a lot depends upon how much work students are willing to put into outside scholarships.
"There are an innumerable amount of scholarships out there that many people are not even aware of because most people don't do the research," Gannon said.
Christina Burney, associate director of Stonehill Career Services, and Benjamin Chalot, assistant director of Stonehill Career Services agreed and said students coming out of high school should try as hard as possible to find more scholarships.
The cost of attending a four year college, such as Stonehill College, increases by about $1,000 a year, similar to the cost of living, Burney said.
In some ways this has made colleges more accountable, said both Burney and Chalot.
"Parents are greatly concerned with what their child will be doing when they graduate," said Burney.
Colleges are now asked to produce "outcomes" for their students. In order to make themselves more marketable, colleges have to put more effort into what students will be doing after graduation, said Chalot.
Colleges have to be able to give students the means to attain a job, make connections, and make enough money to support themselves, he said.
Most employers don't take student loans and college debt into account when they determine salaries, Burney said. She said they look at other factors, such as cost of living.
Factors such as the increase in housing costs has started to steer certain students into different career tracks, said Burney.
"It doesn't bother me to write that check," said Burney, who is still paying off her college loans.
She said that paying off loans just becomes part of your life and you just get used to it.
Burney said one of the most important things students can do to minimize debt coming out of college is to not use credit cards.
According to Nellie Mae, a Sallie Mae Student Loan Company, nearly 75 percent of undergraduate students in 2004 began the year with credit cards.
"The last thing you need is to be making payments on a credit card," Burney said.
Both Burney and Chalot said that students should consider working first before moving on to graduate school.
Many organizations and companies will pay for students to receive a higher education in their field, said Chalot. Students can also look for fellowships, he said.
Service institutions such as AmeriCorps or the Peace Corps will forgive up to $5,000 of loans for one year of service, Chalot said.
Burney said the best way to come out of college making more money is to make yourself marketable by getting internships and making your resume more attractive to employers.

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