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Posted on Sep 28, 2015 in Featured

Student Debt Changes the Game

Written by Michael Lee Simpson, Financial Editor

As the graduation ceremony ends and caps fly into the air, high school students and their parents are faced with the reality that public school has been let out for good this time. Fragments of images swoop and swirl by as they imagine their baby boy or girl falling down the college freshman rabbit hole: worries about frat parties, the perils of drugs and alcohol, poor judgment, failing grades, bad relationships, too much freedom, all come flooding in – but the most overwhelming of them all is money, $$$$$ – Lots of it.

A New York Times article published earlier this year states, “Student loans are now the second largest source of consumer debt in the United States, surpassed only by home mortgages. They now constitute a larger portion of household debt than credit cards or car loans. Students’ debts are unsustainable, dragging our economy down.”

College students are taking longer to graduate. According to the Department of Education, fewer than 40% of students who enter college each year graduate within four years, while almost 60% of students graduate in six years, primarily due to the excessive cost. The Huffington Post recently published a report that New Mexico is the only state where the average college student has less than $20,000 of debt when she graduates.

Many of us were raised from an early age to dream big. One day we’d go off to Duke and get drafted into the NBA, or attend Ivy League schools like Princeton or Harvard to later become celebrity attorneys, doctors and CEOs with multi-million dollar incomes. But what are the second, third and fourth options? How did people who made it through college manage to pay for it, or more likely, how are they paying for it now? What’s their Game Plan?

“I literally worked my butt off so that I would get a full ride for soccer and when that fell through I didn’t think I was going to get in,” said Laura Kennedy, a born-and-bred New Yorker who moved to Ocala three years ago said. “When I did, I took my chance. Because I went to a state school, I worked a part time job, studied, played sports and was involved in clubs. My parents said as long as I stayed involved and helped them as much as I could, they would pay for my school. I feel I earned a college education but my parents gifted me with one and most kids don’t get that opportunity.”

Nontraditional students have had reasons to postpone their education-financial stability, life circumstances, or simply a lack of desire at that particular time. Given our ever¬≠changing world, starting a new career in a job that didn’t exist thirty years ago is appealing.

John Jett, a local counselor, remembers, “I graduated high school in ’78. At that time if you had a high school diploma you were qualified for most jobs. It seemed to be enough to survive and I was content living on a blue collar wage. I tried some college, but I didn’t quite apply myself, then was involved in motorcycle accident and could no longer do physical labor. I went back to school and this time I worked for my grades. Now it seems that even a bachelor’s degree is not enough, especially in my chosen field which is counseling. I start my masters program in three weeks and will be going to Webster University. It’s going to be very challenging but at fifty-four I still feel up to it.”

Matt Sinclair, manager at Harvest Market Ocala explains, “In high school, I excelled academically and was awarded an in state scholarship that covered tuition and most of my books every semester. That combined with a 529 fund my parents had invested in my whole life paid for the first two and a half years of my education at Arizona State. I am going to be attending the University of Iowa in the spring to finish my undergrad but have no scholarship. Now I’m going to have to drain my 529 (the stock market did a number on it several years ago) and will need to take out loans to finish. I am basically hosed for grad school and am hoping to get into a research lab at the university to help mitigate the costs for my graduate education.”

According to a report from the College Board, the average cost of tuition and fees for the 2014-2015 school year was $31,231 at private colleges, $9,139 for state residents at public colleges and $22,958 for out-of-state residents attending public universities. For Ocala residents, the most popular is the College of Central Florida, the thirteenth most affordable school in the country at $12,668, or less if living at home. Another choice is the University of Central Florida in Orlando, which has a tuition fee of $16,763. Unless major scholarships are granted, or the paying party is worth over six figures, Ivy League schools are generally out of the question. Rachel, manager at GNC in Ocala says, “When I was attempting to attend college with no scholarship, my game plan was to utilize the ‘Florida pre-paid college plan’ for two years of community college at a two-year university, but I would save as much money as I could in high school to afford the remainder.”

A local clinical psychologist states, “I was an undergrad in the late seventies when education was more affordable. I went to UC Berkeley. A great state school tuition was about a thousand a quarter and I had grants and work-study money so I actually made more money than it cost to go to school. I also took out student loans and put them in CDs, which were running really high interest rates at the time. When I was done, I just paid them off. It didn’t really cost me. For graduate school, I was accepted into the program which was guaranteed by funding for six years, so again I was very fortunate and did not have to incur debt.”

Tracy Soto, a federal officer with years of training, went the military route and paid for school through her service. “I decided to serve my country while getting the education needed for a lifelong career,” she said. “Whether you chose to stay in the military or take the training into the civilian world, our military offers some of the best practical schools in the country. I joined the U.S. Air Force directly out of high school. After basic military training school, I went on to two separate schools to become an Otorhinolaryngology Surgical Technical – at Sheppard Air Force Base in Texas, then at the Naval Hospital in San Diego. I was in school for almost my entire first year of service. I left the military after my four year enlistment was up, to continue my career with the federal government.”

A local construction worker is always trying to find balance while changing careers to pursue a vocation in the health field. Craig Hughs said, “Many college degrees require an internship in order to graduate. With twenty-three hours a week dedicated to free internship, student loans are a must to survive. Going into debt to feed my family, while in school, is hard to deal with. What other choices do I have?”The United States Department of Justice website is an excellent resource for locating a local credit counseling service is the National Foundation for Credit Counseling, at www.nfcc.org. It’s very easy to become overwhelmed with the cost of getting an education-but with a Game Plan, you may have more peace of mind.