Debt by degree: College loans swamp a generation

As a freshman at the University of Oregon four years ago, Marcus Triest was blissfully unaware of the price of college.

His mother and father, a saleswoman and a farmer, were doing all the worrying for him, just as they had for his elder brother, Matthew, who?d earned a history degree from Willamette University.

?I was getting allowances still from my parents,? Triest said. ?I really had no idea what was going on and what position they were being put in by sending a second kid through college.?

Then came a day in Triest?s sophomore year when his mother sat him down for a talk.

?Look,? he remembers her saying, ?This is what we?ve paid for. This is how much we have left, and this is how much in loans we?re going to have to take out to pay for the rest.?

Triest got a job at Beppe & Gianni?s Trattoria to keep up with his expenses.

He graduated two years later with a degree in product design, with $20,000 in student loan debt and with no prospect for a job.

With chagrin, he?s continuing to drive his hand-me-down, rust-bucket, last-century Corolla.

And, he?s moving back to Portland to live with his parents.

Earlier in the summer, his brother talked about doing the same, since the only work he?s been able to find in Portland has been in flooring sales.

?Dibs on the top bunk,? Marcus jokingly said.

Seriously, then, he said:

?I don?t want to move in with them; I have to. I don?t have any other decision. I have a little bit saved up, but that needs to go toward my loans.?

Like never before, student debt is changing the lives of college students, young graduate?s and middle-aged borrower?s who are still trying to put their college debt to bed.

Nationwide, the mushrooming debt crossed the $1 trillion mark nationally earlier this year, surpassing the big balances that U.S. borrowers owe on automobiles and credit cards.

The debt burden ballooned as the economy worsened, with indebted recent graduates scraping for a job ? any job.

The average student debt grew 24 percent in the past decade. Meanwhile, average earnings fell 15 percent for graduates between the ages of 25 and 34, according to a study by the Progressive Policy Institute.

This debt-to-earnings slippage is increasingly putting young lives in a holding pattern: 14 percent of graduates put off marriage because of the debt, 27 percent moved back in with their parents and 40 percent delayed a major purchase such as a home or a car, according to a Rutgers University spring survey of 444 U.S. residents who had earned a bachelor?s degree between 2006 and 2010.

The debt they carry infuses their decision making, for example, influencing not only when they marry, but also who they marry.

Student debt makes for awkward conversation in the bloom of romance. ?Hey honey, by the way, that baggage in my closet, that?s all debt,? 26-year-old Marylhurst University student Sara Bates quipped.

The debt burden shouldered by the two-thirds of students who borrow to go to college is heavier than the debt their mother and father carried, said Mark Kantrowitz, the founder of finaid.org and an expert in college finances.

The smartest students start worrying about debt when they make their college plans. At college, they don?t dabble in coursework to find a subject that thrills them. The pressure is on to make a decision about their major ? and their career ? before the loan totals mount.

Because of the cost, it?s no longer feasible for students to work their way through college and emerge debt free. It takes more hours of work a week than most students can endure and still get good grades, Kantrowitz said.

In their 20s, students are leaving school laden with regret for the choices they made, the Rutgers study found. Thirty-seven percent said they wished they?d been more careful about choosing a major, 29 percent wished they?d done more internships, 24 percent would have begun looking for work while still in school and 20 percent would have taken more career-?oriented classes.

The job market has disappointed them. Only half found full-time work, the study found. Of those, only four in 10 were in a job that required a four-year degree.

?You went to college to pursue the American Dream,? Kantrowitz said, ?but because you graduated from college with too much debt and you can?t get a job, that dream is on hold.?

And even for those able to establish a solid career, the debt can seem daunting.

Nationwide, the summer of 2012 was enlivened with student-?loan true confessions, starting with President Obama, who said that he and the first lady graduated from law school with debt of $120,000, which they were able to retire only eight years ago.

U.S. Sen. Marco Rubio, R-Fla., disclosed that he borrowed more than $100,000 to attend the University of Florida and the University of Miami.

Rohit Chopra, student loan ombudsman for the federal Consumer Financial Protection Bureau, during a visit to the UO, admitted that he owes $90,000 for his degree from the Wharton School?s MBA Program.

UO student body President Laura Hinman ? who as a California resident is paying out-of-state fees ? said she expects to graduate with $100,000 in debt, about half in student loans and half in loans from family.

Irmary Reyes-Santos, a UO assistant professor of ethnic studies, still owes $40,000.

?It?s like any debt; you think, ?Well, I?ll have this for 30 years, unless I go into business and make really, really good money and I can make bigger payments,??? Reyes-Santos said. ?The reality is that?s not going to happen. I love my job. I love teaching.?

But Kirk Schueler, a hospital administrator and an Oregon Higher Education Board member, who spoke at the UO graduation this year, advised new graduates to shake off their worry about their student loans.

?You?ll make it through this tough job market as others have before you,? he said. ?You?ll pay off your loans, which for the majority of you is less the amount of a mid-sized car loan, which you might also be taking on soon.?

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The Series

TodAY: The sky-high cost of college is forcing young people to fundamentally rethink their goals

Monday: College debt hobbles many recent graduates

Tuesday: College tuition is being driven up by the rising cost of pay and benefits for college employees and declining state aid

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