College graduation is typically a time to tally accomplishments and to look ahead. But for many graduates, it is also a time to tally student loans and figure out how to repay them.
About two-thirds of college graduates have some student loans to pay off, and their average debt is about $25,000 to $28,700, according to estimates by education experts and organizations. (About 10% of those with loans owe more than $50,000 or so.)
Many college seniors say they had not thought much about their debt until they received summaries just before graduation. Their reactions ranged from complete panic to a calm sense that their degree will help them get well-paying jobs to cover the loans.
"While you are in college, it doesn't seem real," said Ben Herrington-Gilmore, who will graduate Sunday from Occidental College.
The weak economy compounds graduates' worries about payments on many federally backed student loans that come due six months after graduation.
"It's clearly another stress in a tough job market," said Lauren Asher, president of the Institute for College Access & Success, an Oakland-based group that works on issues related to student loans. "These are challenging times, and the one thing worse than graduating with a lot of debt is not graduating and still having a lot of debt."
She and other experts urge graduates to explore their options to consolidate loans and to apply for programs that could reduce and stretch out their payments, and possibly forgive portions in the long run if their incomes are low enough. Some public service and teaching jobs also help with reducing debt.
The Times recently interviewed graduating seniors at several California campuses about their loans and how paying them off figures into their post-college plans. For some, the path ahead seems clear and secure; for many, uncertainty is the only certainty. But all said they valued their college experience and do not regret taking out loans even if they now pose serious challenges.
Ben Herrington-Gilmore, 22, feels "pretty up in the air at this point." An Occidental international relations major from Minnesota, he has applied for about 20 jobs at law firms as a legal assistant or administrative aide. But so far, even though he had two unpaid legal internships during school, he has no solid prospects. Meanwhile, his almost $27,000 in education loans will start to come due in the winter.
"Now that unemployment is more and more a realistic possibility, it makes me feel a little more on edge," he said. "They are not incredibly monstrous and not predatory loans. But it is definitely looming over me." His loans come from the federal Perkins and Stafford programs and include both subsidized ones that carry no interest during school and unsubsidized ones that build up interest debt before payments start.
He had financial aid and merit scholarships at Occidental, where undiscounted tuition this year was $41,860, not including room and board. He was employed six hours a week in campus work study jobs, most recently in the admissions office. With the lease for his off-campus apartment ending in June, he is preparing to move in with his father, who is a Presbyterian minister in Connecticut, and apply for work in the New York City area.
"It will be easier to be at home instead of staying on a friend's couch," said Herrington-Gilmore, who wants to apply to law school or graduate school in religious studies in a year or two.
He is adjusting to the idea that he probably won't land a job immediately. "The value of my education is much more than getting a job after graduation," said Herrington-Gilmore, who spent a semester abroad in Brazil. "But it is frustrating that I will be paying back all this for at least 10 years."
Beginning in her freshman year at Whittier College, Brianne O'Doherty worried that her student loans could turn into a big problem. She received substantial financial aid, got some help from her parents and often worked 20 hours a week at campus jobs, but she still managed to accrue about $35,000 in federally backed Stafford and Perkins loans.
With the economy struggling, the prospect of that debt was "alarming" and she said she intensely felt the need to quickly get a job.
A marketing and visual communications major who graduated recently, she began looking for a job in January, well before many of her classmates. She said she searched online, at job fairs and through alumni connections. "The loans were a big part of that and the need to be independent," said O'Doherty, 21. Her fallback was to move in with her family in a Chicago suburb and search for work there.
But she was recently offered a well-paying job in business development at a high-tech firm in Austin, Texas, and she is preparing to move. She said she intends to live frugally so she can pay off her loan in chunks larger than required; her goal is to repay them in five years, half the usual time.
"My loan payments will come before fancy apartments," she said.
O'Doherty, who was on the swim team at Whittier, said she does not regret passing up state schools for a private liberal arts college where the tuition this year was listed at $36,632. "All the opportunities I've had at Whittier have been amazing. I know it's a big cost and education is not cheap. But it's the price you have to pay."
Natasha Sumabat will graduate from UCLA next month even though she has to take two more classes in summer school to complete requirements for her degree in physiological science. Then the 22-year-old plans to move home to Artesia and help out at her family's flower shop.
Once the payments begin on her nearly $29,000 in federal loans, she knows, "it will definitely put more pressure on me to find a job and some kind of income." But living at home will help ease some of that and give her a chance to look for work in the healthcare field and to prepare to apply for graduate school in health administration in the next year or two, she said.
Sometimes she wonders if she miscalculated by not going to graduate school immediately as a way to avoid the job market and get a postponement on her loan payments. Other times, she feels that her graduating class will benefit the most as the economy improves.
At UCLA, she had substantial financial aid, a blend of UC scholarships, state Cal Grants and federal Pell Grants, to reduce UC tuition, which otherwise would have been $12,192, plus other fees and living costs. She worked 15 hours a week as a cashier at a campus coffee shop and as a hospital office assistant. Her loan burden rose, she said, because state budget cuts and overcrowding made it difficult to get all her required classes during the school year and she paid extra for summer courses.
"I'm glad I'm getting out now before our tuition goes up again," said Sumabat, whose younger brother is enrolled at San Diego State.
Despite some worries about the loans, she said she is confident about the future. "I'm a firm believer in positive thinking. If I put everything I have into finding a job and my interviews, I believe it will help me," she said.
Christopher Best is on his way soon to teach math in Mississippi as part of the two-year Teach for America program. And the 21-year-old economics major from Seattle is delighted.
Besides a sense of helping young people, he will also get help in paying off the $45,000 he accrued at Occidental College in federal and private loans. Teach for America participants are eligible to postpone payments on some federal loans while the organization pays the interest; in addition, it offers a $10,700 bonus over two years to help repay college loans.
"That was a big selling point for me," said Best, who had financial aid and worked on campus. The recession hit his family hard; his father lost his job as a construction project manager; his mother kept her position as an elementary school teacher. Best took out $11,000 in private loans from a credit union on top of the $34,000 in federal debt, which is a mixture of Stafford and Perkins loans.
He also held down a part-time job in a Century City wealth management firm and landed job offers in finance for after graduation that were more lucrative than the $30,000 teaching gig.
"I just discovered I wasn't sure that finance was where I wanted to be," he said. "I felt the need to give back in a way and for a little bit of soul searching. I might wind up back there in finance, but I couldn't go directly there from college."