Susan Lanzillo, associate director of financial aid at FSU, reported that 80 percent of 2014-15 graduates who began as first-time students at Framingham State graduated with debt.
The average debt of students who graduated in the 2014-2015 academic year was $29,500.
According to Finance Professor Francis Kemegue, the average debt of a Massachusetts student who graduated in 2014 was $29,391. “FSU seems to be just around the state average.”
Lanzillo said 57 percent of students receive some type of scholarship or grant provided by FSU.
She said FSU gives out approximately $12 million in grants annually, both need-based as well as scholarships, and the university itself funds about 20 percent of that.
Lanzillo added 71 percent of the loans taken by students at FSU are Federal Stafford Loans and Framingham State provides students with just over $40 million in financial aid annually.
Kemegue said student loans are important because ultimately, they enhance the community by providing education which would not have been funded otherwise.
He said, “The objective of students’ loans is for the government to improve the quality of the workforce and therefore promote economic growth. … Student loans help the government achieve its objectives.”
According to Kemegue, “Debt is not always a bad thing.” He said if students utilize their debt to provide themselves with a college education, then this should result in graduates “earning a decent income,” which would then allow them to successfully repay their debts.
Student loans affect borrowers the same way that any other debt would, according to Kemegue. When individuals are forced to “service” their loans, this causes people to reconsider and or limit major purchases such as cars or houses, he added.
He emphasized the importance of career preparation, “Defaults happen when students do not find jobs, or find low-paying jobs. Not finding jobs may be either due to the economy or due to insufficient career preparation.”
Framingham State is doing its best with “progressively extending our efforts in students’ career preparation,” he said, adding FSU has been “doing our share” to assure that students are ready to enter the job market.
Keith Gilbreath, a financial professional at AXA Advisors, said the student loan debt crisis is likely to have a significant impact for decades.
“Not only do students graduate with an amazing amount of debt to start their professional careers, but this debt pushes them back years, if not decades, in their pursuit to save for retirement,” he said.
Gilbreath added as an advisor, he meets with people who are still repaying their student loans at the age of 40 and “that is from 20 years ago, when debt wasn’t as rampant as it is now.”
In regards to loan companies, Gilbreath argues there should be some type of “clear filter for safeguarding students.”
Gilbreath said student loans should be regulated based on major or area of focus in order to ensure graduates will be able to realistically pay their loans based on their estimated income.
“If a student chooses to pursue a career that has a mean income of $50,000 a year, that is fine, but to allow them to take on $150,000 of debt is crippling,” he added.
According to Gilbreath, one of the major reasons graduates have difficulty paying student loans is due to the fact that student debt percentages have gone up, and wages have not increased appropriately.
“Tuition costs have outpaced historic inflation and wage growth by almost 2 to 1,” he said.
Many students are concerned such a high percentage of graduates are burdened with significant loans.
Freshman Hannah Kane said, “It’s alarming because if I’m so surprised at the number here at this school, I can only imagine how other students around my age are feeling with the tuition of their schools being much more expensive than FSU’s.”
Sophomore Sohail Kapida said he was surprised. “I personally think FSU is one of the most reasonable and affordable schools out there in Massachusetts, but I’m a commuter, so I’m not too sure how much it would cost for living at FSU.”
According to Tyler Clapp, a junior from New Hampshire, “The only thing that would surprise me in today’s day and age would be graduating with no student loan debt. FSU may be a small state school, but it still comes with a price tag, and it’s pretty disappointing that kids are still graduating with such a large amount of debt.”
He added, “Finally, for my sixth semester, I became a Massachusetts resident, and get in-state tuition now, but the price is still a lot because I don’t get any grants or scholarships – just those federal loans that I’ll have to pay back.”
Clapp said his parents hold him responsible for all of his loans and payments for school. At the end of this year, he will owe $64,027 in Sallie Mae loans and $15,608 in federal student loans.
“I understand FAFSA thinks my parents will contribute $20,000 per year for school, but they simply can’t, and they need to stop assuming they can,” Clapp added.
According to The Economist, in June of 2014, U.S. student loan debt exceeded $1.2 trillion.
Senior Corey Sousa worries this crisis may lead to a recession. “Just like the housing bubble, I wonder, ‘Could the student loan bubble burst by giving all these kids these loans and letting them build up? What is going happen if millions of those kids can’t pay it back?’”
In regards to the national student loan debt crisis, freshman Melissa Sybertz said, “I think it is corrupt that college in a lot of ways can be considered essential to securing a stable job and that the rates to attend are on the rise. We need a new system that doesn’t put newly graduated young adults in the horrible financial position that so many of them find themselves in.”
Emily Biegner, a Class of 2015 alumna, said, “Going to Framingham definitely helped me to not take out as much in loans, as I have siblings and friends that went to private schools and have as much as $20,000-$100,000 in loans. That’s what makes me feel lucky.”
Biegner compared loan payments to a mortgage, saying it’s necessary but difficult to pay for on top of “all of life’s other expenses.”
Right now, she is doing one year of service for AmeriCorps. She said, “I can forbear my loans and upon completion of my year, they will pay the interest, which is awesome.”
Gilbreath said the most important strategy to successfully pay off one’s student loans is to have a plan. His advice to students is to “attack” the loans with interest rates that are the highest because they can be very costly.
“You can do this by either paying them off first or refinancing them to a lower rate through one of the major banks that are increasingly doing this for students,” he said. Gilbreath added students’ debt reduction strategies have to benefit their future selves.
Senior Christopher Bentley said, “The thought of how much money I owe definitely gives me anxiety. It is very discouraging to finish college and begin my adult life with such a huge debt hanging overhead. It is hard enough to try to afford rent and living expenses without the loans included. I feel that I have to be very careful with my spending and plan my savings.”
Kaila Braley, a Class of 2015 alumna, said, “After graduating and getting a job, I have a couple of payment plans through loan services, but managing it hasn’t been as difficult as I expected. Whenever I’ve had a problem or the monthly payments were too much for me, I called the services and they were very helpful in getting me plans based on my income that I can easily afford.”
[Editor’s Note: Kaila Braley is a former Editor-In-Chief of The Gatepost]