Clarification: This editorial used the 2009 Project on Student Debt numbers to determine that an average AU student would have about $41,000 in debt. The Project on Student Debt has more recent numbers of which The Eagle was not aware. According to the organization's 2010 numbers, the average student debt at AU is $36,206, a number provided by AU's Financial Aid Office.
Our generation is faced with a brutal reality. When we leave our campuses, we’ll be taking a huge part of college with us: our student debt.
We know everyone at AU suffers from a little math-phobia. But bear with us for a few paragraphs while we demonstrate just how debilitating student debt can be.
The average AU student — we’ll call her Sam — graduates around $41,000 in the red, according to the Project on Student Debt's 2009 numbers. Let’s say she wants to pay this off in 20 years. At an interest rate of 7.5 percent, Sam would need to pay $330. Every month. For 240 months in a row.
But Sam was able to score a job with a nonprofit. Her salary is $40,000, exactly the average for international relations majors, according to the Wall Street Journal.
Still, her student debt payments would take up more that 10 percent of her monthly income, and that’s before taxes. Add that to $1,000 a month rent, utilities and other expenses, and it looks like Sam is going to continue her college diet of Ramen and Hot Pockets for the next two decades.
And if she wants to shell out $150,000 for law school — we’ll let you do the math.
These depressing numbers that students like Sam face are what spawned last week’s student protest in front of Sallie Mae, the primary originator of student loans.
Of course, like many protests, there were few tangible solutions to the problem. But as students formed human barricades in front of every exit, the growing frustration about the cost of higher education was clear. And it is certainly a legitimate one.
President Obama has issued a student debt proposal to ease the difficulty of paying back loans. Yet most commentators agree this is largely a stopgap measure. While we wait for a more convincing and permanent response from our elected officials, we look to our school to fill the void.
Some may claim that this a problem largely rooted in a lack of personal responsibility. Shouldn’t students look at available majors, their own financial resources and expected salaries before choosing where to go to school and how much to pay for it?
While we don’t want to ignore the role of smart choices, The Eagle believes students must be presented with the proper information if smart choices are to be made.
How many 18-year-olds can truly comprehend what $41,000 of debt really means? If the current levels of student debt are any indicator, not many.
Here, AU should take the lead.
We think the University should play a role in helping its applicants understand the financial burdens they may incur. Imagine if every applicant that would incur more that $15,000 of debt received a phone call from a University financial counselor to explain their fiscal reality. Potential students might have the opportunity to step back from the euphoria of college acceptance letters and truly make an informed decision.
It’s not that far-fetched. Barnard College financial aid directors started a similar procedure in 2006. The current director even told a prospective student, who would have had to take out $140,000 in loans, not to attend the school, according to an October TIME magazine article.
Yes, this might not be in the direct financial interest of the University to implement a similar policy. But as a nonprofit university dedicated to “development of thoughtful, responsible human beings,” AU should welcome being held to a higher standard.
Our university also has an obligation to prepare its students for the financial realities they face. While there Personal Finance (FIN-200) is available for Gen Ed credit, we see no reason why this course should not be required for all AU students.
AU’s other academic requirements teach practical skills they will need in the real world. English. Math. Financial Ed is just a logical and desperately needed next-step.
Student-debt isn’t going away. And in the years ahead, a lot of us are going to need all the help we can get. AU, we’re looking at you for a hand.
