Payback time for new Mississippi State University grads

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Payback time for new grads
$17.5K is average amount of debt students carry
ELIZABETH CRISP • ELIZABETH.CRISP@CLARIONLEDGER.COM • MAY 11, 2009
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A struggling economy, tight credit and rising tuition are teaching college students some tough lessons these days.



With thousands graduating from universities and colleges across the state this month, many will find competitive job markets - and plenty of debt in their futures.

For Lawrence Simmons, who graduated from Mississippi State University last week, the reality about student loans is a stark one.

"It's one of those things where one day you wake up and you realize, 'Now I have to pay that back,' " he said.

Simmons isn't sure how much he owes. "I haven't really calculated it," he said. "I would imagine it's a good amount."

At least 60 percent of Mississippi's four-year public and private college students graduate like Simmons - with debt.

Mississippi ranks 24th in the nation for proportion of students who graduate in debt, according to the Project on Student Debt.

The average student debt load is about $17,500.

With the current economic forecast and bleak outlook in several areas of the job market, students may find it harder to start paying back those loans.

Simmons earned a degree in communication, but he isn't expecting to land a full-time job in journalism that will pay him enough to start settling his debt.

Instead, he's considering moving back home to find a general service job - maybe with some writing on the side. He also has been thinking about programs such as AmeriCorps.

"At this point, I'm just weighing my options," he said. "That's the reality I'm stuck with."

In the past 20 years, the average tuition at Mississippi's public universities has nearly tripled - from about $1,672 to $4,742 per year, not including room and board, which also have increased.

This academic year, tuition at the state's eight schools ranges from $4,423 a year at Mississippi University for Women to $5,150 at Mississippi State.

Tuition at private schools also has risen, leaving students from both sectors looking for extra money to put toward college.

"If it weren't for student loans, I wouldn't have been able to graduate college and wouldn't have the job I have today," said Jeffrey Ellis, an engineer at Northrop Grumman on the Gulf Coast.

Ellis graduated from MSU in 2006. The decision to take out student loans was made a bit easier simply because he knew he would be entering a lucrative field, he said.

"I was really confident I would get a job and be able to pay them back," he said. "It's still a monthly expense I wish I didn't have to pay, though."

Betty Moncure, director of financial aid at Jackson State University, said her office has been busy providing exit counseling for those about to graduate.

The staff pays special attention when advising on debt management.

"We give them all the knowledge every good borrower should have," she said.

On Thursday, a steady stream of graduating seniors lined up outside her office.

"We always make sure to do this whether it's an economic hard time or not," she said.

The counselors tell students what's ahead. They show them the payment calculator and figure out their initial payments, so they know what they are about to get into. They tell the students to contact their lenders or seek advice from a reputable source, like the school, if they are struggling to pay.

"Hopefully, we won't see any problems. Hopefully, everything is positive," she said. "But we want to make sure they know what to do if they are having difficulties."

Students can put off paying back their loans while they continue seeking advanced degrees. Meanwhile, their debts grow.

Sarah Kocher, a student in the master's of business administration program at Millsaps College said she has "no idea" how much debt she will have when she graduates from the one-year program this month.

"I'm supposed to be figuring that out right now," she said. "I know it's a lot."

She knows she has a job at the college through this summer. After that, she's not sure, but she'd like to find a job in human resources.

Kocher's dad handled the student loan process for her when she sought her undergraduate degree. As a graduate student, she's been on her own.

"I guess when I decided to enter the (MBA) program, I wasn't really aware of any other options," she said. "I didn't really look into anything else because student loans seemed like the thing you're supposed to do."

That sentiment is echoed across campuses.

"All of my friends and my roommates - pretty much everyone I know has student loans," said Katie Truitt, a senior at the University of Southern Mississippi.

Truitt's story is a bit different. She hasn't had to take out any student loans yet, but it is something she worries about.

She was planning to graduate in December this year but may have to go through May 2010. The extra semester prompted her father - maybe half-threateningly - to ask her to pay her own way.

"If that happens, I know I'll have to take out a student loan," she said. "He probably won't end up making me pay, but either way I'm very grateful that I haven't had to up to this point."

Experts say part of the problem when students seek out loans is they may not know all of the options available.

While many students seek out federal programs, statistics show the percentage of all undergraduate students who took on private student loans jumped from 5 percent in 2003-04 to 14 percent in 2007-08, according to data released as part of the National Postsecondary Student Aid Study last month.

Financial aid experts typically agree private loans should be used only as a last resort, but one in four private student loan borrowers in 2007-08 didn't use federal Stafford loans that year, the NPSAS showed. Stafford loans are available to nearly all students, regardless of income.

"These data are troubling because private student loans are more like credit cards than financial aid, and have very little in common with federal student loans," Lauren Asher, acting president of the Institute for College Access & Success, said in a statement. "Too many students are missing out on federal loans and going straight to one of the riskiest borrowing options."

To comment on this story, call Elizabeth Crisp at (601) 961-7303.