Many students take out money during college, assuming that they will be able to pay it back after graduation.
However, it does not always work out that way.
Often, students find themselves in a sinkhole of debt upon graduation, and some are finding it is becoming more difficult to crawl out.
“You expect that you will land a great job right away and immediately make tons of money,” said a University of Memphis graduate who wished to remain anonymous. “By the end of my senior year, I owed a total of $7,400 to the government (federal loans) and over $12,000 in credit card debt.”
With the cost of higher education on the increase, and outstanding consumer credit climbing to an all time high at $1.5 trillion amid a nationwide recession, recent graduates already burdened by unpaid student loans are finding it more difficult when starting their professional career.
Jesse Carpenter, a licensed counselor who lives in Memphis said he is still struggling to pay off student loans he accumulated in college nearly two decades ago.
Now, at the age of 46, Carpenter’s story should be seen as a warning to students that could potentially find themselves in his situation one day.
“Don’t run up $35,000 in school debt. You don’t want to be 46 years old and still paying it off like I am,” he said.
With the accessibility of credit cards, loans, and other seemingly intangible forms of money available to college students, it is easy to see how such significant amounts of debt could accumulate.
Even for students who are not worried about financial aid payments, it can be a struggle to stay out of debt.
“I’ve been really short on funds, but I have not actually experienced debt,” said Ashley Kemp, a U of M student. “Paying for room and board is a stretch sometimes; fortunately, my tuition is paid for through scholarship.”
With the recent tuition increase, in-state, full-time students pay an estimated $1,735 each semester, and those attending from out of state pay $5,062. The escalating cost of higher education has forced many students to take time off in order to save money for their future education.
“I decided to take this semester off in order to work,” said Michael Burns, a Tiger Patrol employee. “I need to save money in order to pay off loans and other expenses so that I can continue my classes without worrying about how I will pay for them.”
Although some University of Memphis students were ineligible for scholarships as incoming freshmen, there are several departmental scholarships offered. A percentage of these are not even applied for by potentially eligible candidates.
Another often overlooked resource to aid in the cost of tuition is an assistantship. Many departments at The University of Memphis offer these to qualifying students. For example, in the Psychology department, the Cognitive Science Lab under the direction of Art Graesser is doing interdisciplinary research on artificial intelligence systems. This research has been the gateway to a significant number of grants, which have helped to aid some students financially.
“In general, an assistantship means a waiver of tuition and a reasonable salary,” said Max Louwerse, a Psychology professor at The University of Memphis.
Other helpful advice was offered by Jim Underwood, a spokesperson for AmSouth Bank.
“Students need to know where their debt payments are coming from,” Underwood said. “The main thing is to use credit responsibly. If you have to use your credit card to pay for necessities or other loans, that is a warning sign.”
