College Kids Worry About Student Loan Debt

LINCOLN — Marco Aldana shifts uneasily in his chair as he listens to his older brother Johny describe his money worries.

Marco, 18, is a freshman computer science major at the University of Nebraska-Lincoln. He just took out his first student loan.

With graduation looming in December, brother Johny, 23, lives with three roommates in a house off campus. Until recently, he was working two part-time jobs to pay his bills.

He's afraid to look at his student loan balances.

“Money is the No. 1 stress in my life,” Johny said last week.

The Aldana brothers are not unusual. The average student debt for graduating college seniors in the U.S. is about $25,000.

In this presidential election, both political parties target student debt in their platforms. The Democrats tout efforts to expand the Pell Grant program, to control college costs and to keep student loan terms manageable; the GOP says federal student aid is on an unsustainable path and calls for a return to private-sector student loans.

Officials with area universities said they observe students facing increasingly intense financial challenges — and a growing number of institutions provide financial counseling to students.

More than half of college students who responded to a new survey said they are highly stressed about repaying loans, the cost of college and finding a job after graduation.

The online survey of 500 students was conducted by Inceptia, the newly established school services division of the National Student Loan Program, a Lincoln-based student loan company.

The respondents included current students and recent graduates of public and private two- and four-year institutions.

Other findings:

  • While more than half of students worry about their academic performance, on average, they feel more intensely stressed over money.
  • About one-third of students report that financial stress hurts their academic performance. One-fifth said they had to reduce their course loads because of finances.
  • Students spend more time working than studying. Three-fourths worked during the school year, averaging 21 hours per week. That compares to 15 hours a week the average full-time college student spends studying, according to another survey.

“Some students are taking longer to graduate or dropping out completely because of financial stress,” said Kate Trombitas, Inceptia's vice president of financial education. “It is a retention issue.”

In 1986, Iowa State became one of the first universities in the country to established a financial counseling clinic. In the past two years, Creighton University and the University of Nebraska-Lincoln have added financial counseling services.

In July 2010, Creighton assigned an assistant director in its financial aid office to financial literacy services. At about the same time, UNL established its Student Money Management Center, now in its fifth semester of operation.

All three universities provide a mix of services to students, such as conducting group workshops at dorms and Greek houses and one-on-one counseling services to students who seek more personalized assistance.

Doug Borkowski, director of Iowa State's financial counseling clinic, said he's noticed a slow-growing trend of students worrying about finances. The clinic provided personal counseling to more than 560 students last year — an increase of about 50 from the previous year.

About half are students with “minor to major” problems with bills and debts. Others seek investment advice, assistance in analyzing job offers or help in an establishing a budget to stay out of trouble. And many, he said, are anxious about starting their work life with a millstone of debt.

“That's their big worry: ‘Am I going to be able to do the things I want to do, considering I have that much debt?'” Borkowski said. “‘Will I even be able to afford to buy a house or take advantage of an employer's match on a 401(k)?'”

The Aldana brothers are familiar with such doubts.

Both their parents have worked many years at the American Meter factory in Nebraska City. The brothers said their parents want their four children to have a better life. They made sure all of them worked summer jobs at the factory, for spending money and to experience what it's like without a college degree.

“I don't want to go back — it's not fun,” Johny said.

Their 31-year-old sister, a teacher with student loans to pay, urged them to seek as many scholarships as they could find. A 27-year-old brother chose the Navy Seabees instead of college.

Johny was able to quit his part-time job at a supermarket after his parents gave him some money to cover start-of-school bills. He still works at a fast-food joint.

He worries about burdening his mom and dad.

“The only reason it bothers me so much is because it bothers my parents so much,” he said.

Majoring in English and film studies, Johny's dream is to become a scriptwriter. Right now, he's hoping to land an unpaid internship that would get his foot in the door for a corporate communications job. He fears that his debts and his job prospects may prevent him from having a family of his own.

“My sister said maybe I should find something more practical,” he said. “I would — but I don't want to hate my life after that.”

Marco, though he loves acting, chose computer science for its better job prospects.

Though he got about $7,600 in scholarships, grants and federal student loans, Marco has taken out a $13,000 bank loan to cover the remainder of his first-year costs.

He is sobered by what his brother says.

“Actually — it's making me real nervous,” he said.

THE OMAHA WORLD HERALD

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