Debt Be Not Proud
On tonight's CBS Evening News, our colleague Sharyn Alfonsi looks at the higher cost of higher education, and how more students are being driven into debt. Here's a preview. - Ed.
I went to Ole Miss, so it was all about classes in the Grove, tailgating on Saturdays and perfecting the art of smuggling bourbon into football games. (Key words: Ziploc bags and masking tape).
I had such a great time in Oxford that it's amazing my four years there didn't turn into five or six. The reason I ultimately moved into the real world was simple: I was sick of being broke.
I remember putting my debit card into the ATM, selecting WITHDRAWL, $20, and then waiting. One of two things would happen next. If you were lucky, you'd hear the delightful sound of money cranking towards you. If you weren't lucky, you'd get a disappointing silence and a more disappointing message on the screen: INSUFFICIENT FUNDS.
Being cash-strapped in college has always been part of the deal. But these days, going deep into debt is becoming just as common. Among students with loans, the average debt since 1993 has doubled from $9,250 to $19,200. That's a 58 percent increase -- after accounting for inflation.
What's going on? Tuition at public colleges has increased 57 percent. But the maximum amount students can borrow from the federal loan program hasn't risen a dime in a decade. It's stayed at $23,000. The result? Students are taking out private loans — and lots of them. There's been a 734% increase in private loans over the last decade.
Renita Burns has her share of private loans. She's a junior at Temple University. When I met her, she was explaining to me why her grade-point average had dropped "sooo much" — from 3.8 to 3.5 … Hardly a reason to call the disciplinary council! She is a smart, attractive and a very motivated student. She is also — like a lot of other middle-class students — drowning in debt. Renita estimates she will graduate with more than $30,000 of debt — a large portion of that from private loans.
Renita told me she worries that when she graduates she won't be able to take the job she wants (in journalism, God help her!) because she won't be able to pay back her loans. That would be shame. Journalism could probably use a few less bourbon smugglers and a few more honors students.
