Amanda Lien grew up in a lower income family and she, her mother and sister have chronic health issues, which made it difficult for her family to save for her college education.
Lien, a 2018 journalism alumna, knew that if she enrolled in a four-year program she would need to take out loans. She tried to limit expenses by attending community college while in high school, allowing her to graduate from Temple in two and a half years.
Despite her best efforts, Lien owes about $68,000 in debt, impacting her housing, her career and whether or not she could get a cat.
“I just remember feeling really frustrated that I had worked so hard for the last two years of high school to not have to incur so much debt and then it was still well into the five figures that I ended up graduating with,” Lien said.
Student debt has left alumni and recent and future graduates with an immense financial and mental burden. Amid renewed calls for President Joe Biden to cancel student debt, Temple University alumni and graduating seniors share how student loans impact their lives upon graduation.
Seventy percent of Temple’s class of 2020 borrowed student loans. The class of 2020 also owes an average of $39,913. Temple students who completed their undergraduate degree graduate with a median federal loan debt of $24,437, according to U.S. News and World report.
Roughly 46 million people in the United States have student debt, which presents particular challenges for students of color, first-generation students, international students and students with financial difficulties.
Student loan debt disproportionately affects Black students, because they have less intergenerational wealth than white students, according to the Brookings Institute, a non-profit public policy organization.
“[Student debt] has implications for racial justice, that has implications for other parts of our economy, like the impact of student debt on people’s ability to afford housing or homeownership or start businesses,” said Mark Huelsman, director of policy and advocacy at The Hope Center for College, Community and Justice, a research organization.
Zoraida Cordero, a first-generation college graduate, would like to have children someday, but between housing and car-related costs, financially supporting her family and student loan payments, starting a family would leave her “drowning in debt.”
“That’s where the anxiety kicks in and the reality of feeling like you’re never going to be successful,” said Cordero, a 2021 master of social work alumna. “So you’re always going to be the underdog.”
Natalie Elias, a senior engineering technology major, is anxious about student debt, but she is grateful to have a job that will help her afford the monthly payments once the federal moratorium on student loan payments ends on Aug. 31.
During the moratorium, borrowers do not have to make their monthly payments, interest rates are set to zero percent and the government stops collecting on defaulted loans, according to the Federal Student Aid website.
“It’s such a large sum of money that will have to be paid back, and it’ll just get bigger and bigger with when the interest rate starts accumulating,” Elias said.
THE COST OF HIGHER ED
As the COVID-19 pandemic subsides, inflation is increasing college tuition and fees, NBC News reported. During the height of the pandemic, universities halted their tuition increases to help enrollment.
Overall, Temple’s tuition has trended upward during the past 10 years, except for tuition freezes during the 2019-20 and 2020-21 academic years due to the COVID-19 pandemic. Additionally, the university has not increased its mandatory university fees in approximately five years.
In the 2012-13 academic year, base tuition was $13,006 for in-state students and $22,832 for out-of-state. This academic year, base in-state tuition sits at $16,488 and out-of-state tuition at $29,712.
All prices, including tuition, rise over time, wrote Ken Kaiser, senior vice president and chief operating officer, in an email to The Temple News. Thirteen percent of Temple’s budget is from state appropriations. Temple has decreased their budget by $74 million in the last two years because of increases in expenses and decreases in enrollment. Any rise in costs is covered by either budget cuts or tuition increases.
The university cannot always supplement cost increases with budget cuts because there is a need to expand compensation, benefits and services like advising and Student Health Services, Kaiser said. Therefore, tuition must be increased.
Kaiser believes that Temple students’ debt does not lay on the shoulders of one institution.
“I wouldn’t say it’s any one individual’s fault,” Kaiser said. “It’s a lot of things, I mean state funding is a small percentage of the budget and it’s gotten way smaller over the last several decades, students and families demanding more services, it’s just everything combined.”
Pangaea Saunders, a 2021 biology alumna, is enrolled in Temple’s post baccalaureate pre-health program, which costs approximately $30,000 and offers no federal financial aid, Saunders said. However, Saunders realized that accumulating student debt was inevitable and that she had to “bite the bullet” and enroll.
“I’m angry at the system as a female, Black, pre-med student, who can’t even afford to apply to medical school,” Saunders said. “We’re talking $7,000 application process, so it’s just one big hurdle over hurdles that are just easy for people with money.”
A student’s chosen area of study in college and the earnings of their chosen career also contribute to someone paying off their debt faster than, Huelsman said.
Cordero is from a working class family, with a lower wage job in the social services industry. Because of this, she has to work harder to negotiate her salary so that she can pay for her expenses, including loan payments.
As an international student from India, Ankur Khare faces additional barriers in paying his student loans. Khare graduated with his first masters degree in business administration in 2005 from the Jaipuria Institute of Management in India before enrolling at Temple in Fall 2017 and graduating in December 2018 with a second masters in business analytics.
Khare cannot borrow or refinance his loans from the U.S. Department of Education, even though he attended an American university. Instead, he must use a private international lender, Prodigy Finance, which has higher interest rates compared to U.S. federal loans.
“I can take a mortgage, I can take a personal loan, I can take a loan for my car, I can take any kind of loan in [the] U.S. right now, but I cannot take student loans,” Khare said.
TEMPLE’S RESPONSE TO DEBT
The Fly-in-Four program incentivizes students to graduate on time. Between 2013 and 2016, the program reduced Temple students’ debt by $2.4 million, wrote Conrad Muth, assistant vice president and bursar, in an email to The Temple News.
The Bursar’s Office also sends students an annual letter that summarizes their debt, so they can make financial plans.
Student Financial Services offers webinars on student financial aid. Temple allocated 18.4 percent of undergraduate and 1.9 of graduate tuition to financial aid, Muth wrote.
However, financial aid, except for grants and scholarships, accumulates student loan debt.
CAN WE CANCEL STUDENT DEBT?
While colleges and universities experienced a decline in enrollment last fall, indicating a potential decrease in borrowing, almost one-fifth of all federal borrowers defaulted on their loans, according to Pew Trusts.
Amid these economic challenges, politicians, activists and students have called on the federal government to cancel student debt. Individuals who oppose student debt cancellations say the move would be too costly, with the Los Angeles Times Editorial Board arguing that forgiving up to $50,000 per borrower could cost the U.S. Department of Treasury an approximate $1 trillion.
Huelsman thinks canceling student debt is feasible because Pell Grants, not loans, were supposed to be the main way that students finance their college education.
Recently, the value of Pell Grants, state grants for lower-income individuals, have decreased, allowing loans to become the main form of education finance. Funding for Pell Grants decreased from $1.4 billion to $1.1 billion in 2021 because of reduced congressional funding, according to the Center on Budget and Policy Priorities.
Huelsman also points to the federal government’s student loan moratorium as an indication that pausing loan payments does not upend the U.S.economy.
“We’re able to pay our bills as a country, there’s nothing that we need, we do not need to force people into debt to finance anything in this country,” Huelsman said.
For Binh Nguyen, a 2017 strategic communication alumna, the federal moratorium allowed her to catch up on her payments while her loans are not accumulating interest.
“It was a relief, knowing that now moving forward the amount that I am paying is contributing to the actual cost of my loans and not just the interest aspect of it,” Nguyen said.
Despite resources and potential solutions, the anxiety of impending debt weighs on Saunders’ mind.
“Money is the first thing I think about when I go to bed and the first thing I think about when I go to sleep and it has affected every, I mean even when it comes to registering for classes every semester, my anxiety, my fears and my rationale, how I rationalize things just goes out the window because here I am making all my decisions based off of money,” Saunders said.