By Sarah Henry
The average graduate’s debt reaches almost $15,000 by the time they graduate. Students seek grants, work opportunities and saving strategies to manage debt some anticipate will last their entire careers.
“My education is infinitely more valuable than the dollars that I am putting into it,” graduating senior Elise Buchbinder said when speaking about her decision to attend the University of Wisconsin-Madison, knowing she would finish with an enormous debt. “I disagree with the system, and I’m not happy with being in debt—it’s debilitating at times,” Buchbinder said. “It is what it is, and I’m confident that my degree and my experiences will help me get a job that I am able to reasonably pay back what I owe.”
Buchbinder is graduating with a degree in philosophy with certificates in global culture and integrated liberal studies. After graduating, she plans to spend five weeks in South America before she starts looking for a job.
There are currently 18,000 undergraduates attending UW-Madison who have taken out federal loans, UW-Madison Financial Aid Director Susan Fischer said. According to the UW System memo prepared for the Board of Regents, the average debt of borrowers was $24,717 in 2009-’2010, and the average debt of all graduates was estimated at $14,597.
“We are obligated to award everything someone is eligible for,” Fischer said.
Still, the dollar signs attached to higher numbers than many students have ever seen poses the question: How much aid should students accept?
“The common wisdom out there is you shouldn’t borrow more than what your first year’s salary will be, total,” Fischer said. “I say borrow as little as you need. Just because we’re offering it to you does not mean you should take it.”
But for Buchbinder, the federal loans she was offered were not enough. On top of her enrollment as a full-time student, Buchbinder spent 10-20 hours each week working for the UW Athletic Department.
Even while working, Buchbinder will graduate with debt of almost $60,000—almost three times UW-Madison’s average debt.
“I’m also getting some financial support from my parents—whenever they can put $25-$50 in my account for food, they will,” Buchbinder said.
But she does not rely on them.
“I adopt [my debt] as my own, even if they say they want to help me pay it back.”
Buchbinder will have a standard grace period of six months from the time she graduates before she is required to begin repaying her debt, Fischer said.
Those who graduate with debt repay the U.S. Department of Education, which must know the address, and other information, of debtors until the loans are repaid, Fischer said.
Buchbinder expects it will take her 30-40 years—or what may be her entire career—to pay back her UW-Madison debt.
Other students, however, expect repayment to take much less time.
Graduate student Hossein Panahi has relied on federal and private loans to fund his doctoral degree in sociology, which he hopes to earn in 2014.
Panahi hopes to repay his loans through working as both a teaching assistant and a residential advisor, although that is an option most undergraduates do not have.
Also a sociology major, junior Jake Dwyer expects to graduate in spring 2013 with $17,500 in federal loan debt, or roughly one-third what Buchbinder will owe. He hopes to pay this back within three years after graduation.
Despite graduating with thousands of dollars of debt, many students—like Buchbinder—feel the education they will have received from UW-Madison will be well worth the money.
“I think the cost of [going to school] at Madison just goes with how amazing the school is,” graduating senior Stefanie Dulak said. “It’s worth it.”
Though she feels confident in her decision to go into debt for her degree in philosophy with certificates in global culture and integrated liberal studies, Dulak and other students would like to see changes made within the financial aid system for future students.
“Reducing interest rates while you’re in school would be helpful,” Dulak said.
President Obama recently made limiting interest rates on student loans an issue in his re-election campaign, but Republicans question how the President wants to pay for any changes.
Dwyer would like to see student debt eliminated, for example, if someone enters a career related to the degree he or she earns.
Buchbinder sees the future more realistically, though.
“In a better world, policies that reward not only academic achievement, but [also] public service would be a good incentive system [for students to receive financial aid],” she said.
“In a perfect world, my office would be out of business,” Fischer said. “We’d be doing something else.”