OPINION
WEDNESDAY, MARCH 30.2005
WWW.KANSAN.COM
PAGE 7A
A SHADENFREUDEN WORLD
Financial debt growing trend for college students
MINDY OSBORNE
mosborne@kansan.com
The latest trend for college students isn't a pair of Crocs or quoting from "Napoleon Dynamite." It's getting into debt.
A study published last year by the State Public Interest Research Group suggested that increasing tuition rates, higher borrowing limits on
government loans and a new surge of low-income students have pushed college graduate's debt burden higher as they borrow more to subsidize their undergraduate educations. The study also said that while the rising cost of college education grew by 40 percent, the median family income increased by only 12 percent.
Maybe that is also why it's not just less-fortunate students who need to take out loans now. By 2000, 46 percent of students from the top income bracket reported borrowing money to help pay for college which is a sharp increase from 1992, when only 24 percent in this bracket borrowed money, according to government figures. In all brackets, the percentage borrowing at least $25,000 rose from seven to 26 percent.
But even when borrowing from the government, students need to be knowledgeable. Recently, there has been an increase in the number of unsubsidized, as opposed to subsidized, loans offered by the federal government. In the former, interest accumulates while the student is still enrolled in a university and is then 'capitalized' — or added to the total — upon graduation. In the previously more common subsidized loan, the state pays the interest on the student's behalf while he or she is attending school. When the student finishes their studies, the graduate is only responsible for the initial amount borrowed.
What's more, the situation does not look bright for anyone taking out a government loan. Currently interest rates are set at 2.75 percent. Just recently, Alan Greenspan issued a statement indicating the government's willingness to further step up rate increases. Previously the increases came in quarter increments but now fearing inflation, they warn that steeper increases could be coming ahead. Higher tuition rates and fewer scholarships can be seen at the University of Kansan just like any other university in the country.
During the 2002-2003 school year, University students have received more than 10,800 scholarships but during the 2003-2004 school year, only 7,650 scholarships were allotted. Now the 2004-2005 school year has seen an increase of $318 per semester for resident undergraduate students taking 15 hours. Non-residents taking 15 hours a semester had a $557.25 increase. And, thanks to a last-minute save by Student Sentate, we averited another tuition hike intended for the College of Liberal Arts and Sciences.
Part of the problem is that credit card companies see college students as a prime target.
Therefore, when government loans and scholarships aren't enough, students turn to credit cards as an alternate source of spending power. But, this can prove just as detrimental if not handled properly.
That is because they are most likely not going to be able to pay off their balances every month and therefore, incur interest. So these companies hawk their wares at basketball games or in the Union, they offer cards but student's don't understand exactly what they are getting into.
The average undergraduate has $2,200 in credit card debt, according to Nellie Mae, the nation's largest student creditor. This is a result of all the charges and fees that come with a lot of the credit cards offered to students. For example, a finance charge is an interest charge, which can be as high as 20 percent, on the unpaid portion of your bill each month or an annual fee, where some companies charge yearly membership fees of anywhere from $20 to $100. Therefore, the longer students wait to pay the cards off, the worse it gets. By sticking to minimum payments it would take a student more than 12 years and $1,115 in interest to pay off a $1,000 bill on a card with an 18 percent annual rate.
The University has taken some measures to protect us from ourselves. In 2003, Provost David E. Shulenburger issued a press release that adopted a policy on credit card solicitation where none could take place on campus "the week before and the two weeks following the first day of each semester. Educational material on the use of credit shall be included in the orientation programs for incoming students...the issuer shall provide to students information on the responsible use of credit cards and the risks of credit card use."
Perhaps college students have gotten into this mess because they have no formal education in financial matters. While 37 states have policies that encourage or require students to receive instruction in consumer education, only 14 mandate financial literacy training in high school. Essentially we are expected to learn from our parents or trial by fire.
It is important to keep a few things in mind when dealing with credit cards and loans. Read all application materials carefully, especially the fine print, in order to be familiar with the terms of the agreement. Also consider using a debit card instead of a credit card. Money is deducted directly from your checking account, so you can't spend more than you actually have. And lastly, pay bills to keep finance and other charges to a minimum.
- Osborne is a Dunlap, Ill., junior in journalism and international studies.
LETTER TO THE EDITOR
Student Sentate's resolution on marriage ban oversteps bounds
Nick Sterner would be smart to follow his own advice.
"We are elected to represent students," Sterner, KUnited presidential candidate said in a Mar. 17 The University Daily Kansan article.
Unfortunately his actions show that he is doing anything but that. The passing of this resolution calling on University of Kansas students to vote against the ban on gay marriage is an attempt by Student Senate to get students to represent the Senate.
Democracy works best when ideas and policies develop from the substratum upwards. It is a clear violation of this principle when the government tries to influence the votes of its constituents.
Can one ever imagine the chaos that would result if the United States Senate started passing resolutions recommending which presidential candidate one should vote for? It is absolutely
absurd and citizens would just not stand for it. And yet, it is not all that different from what the Student Senate just did.
One must wonder how this resolution cannot be about personal ideology. Sterner's contention that it would violate students' rights is plainly disproven by the simple fact that it would not violate anyone's rights that they do not already have. It is really a pretty transparent move to make a strong, yet mostly likely futile point before the upcoming Senate presidential election.
All in all, I doubt that this resolution will affect the April 5 vote much. And I seriously doubt that this will set an unfortunate precedent for any other governing body. But all the same, Student Senate did overstep its bounds this time and regardless of how much money they spend on sidewalk chalk, I for one will not be voting for Sterner for president.
Andrew Soukup Lakin sophomore Linguistics
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LANG'S PERSPECTIVE
Doug Lang/KANSAN
AS I SEE IT
This is it, seniors, indulge in responsibility-free life
Now what? What happens next? Where do we go from here?
For you, near-graduate, it seems that all you have are questions. Yes, with the close of spring break so ends the fantasy. The denial that you lived in through February and March has come back to slan
BOB JOHNSON bjohnson@kansan.com
you in the face. No job, no money and only the foggiest and most distant of possibilities lined up for post-graduation. My dad's friend's brother works for a pharmaceutical company, and I think they are looking for people.
The day we always knew would come has finally arrived on the doorstep. The real world stares us dead in the eye, seniors, beckoning us to come hither with its bony finger like the grim reaper sent from our uncertain future.
With May comes the end of our lives as we have known them so fondly for the last four years. The clock is ticking, and with every second we grow closer to a time when all of our freedoms will be stripped away and replaced by cubicle walls and water coolers. Something must be done to delay this Armageddon, to decelerate the onset of cell phones attached to our belts and assigned parking spaces. Who really wants to recap last night's "Survivor" episode with his co-workers while waiting for the budget meeting to start? Not I, my friends, and I suspect not many of you.
from our duty as the undergraduate elderly to slack off in our conventional commitments and enjoy life. We must embrace our senioritis and let its charms dictate our actions in these precious days.
Senioritis is a deadly disease for which there is no
So, seniors, what is left for us?
Saddest of all, basketball is over. Those senior players did not deserve to go out like that, in the first round to a school that none of us had even heard of until Selection Sunday. For those of us who came to this hallowed institution nearly four years ago alongside Keith, Wayne, Aaron and Mike, this tournament's loss was not only the end of a basketball season, it was the end of an era and the anticlimactic culmination of our college careers.
vaccination. Even the most dedicated students fall victim to the lures of laziness when a college degree is on the horizon. Suddenly the president of this or the treasurer of that shivers at the sight of a library, but can recall with flawless clarity which "Seinfeld" reruns ran on TBS last week.
But we cannot let this unfortunate fact deter us
Traditional early risers have turned nocturnal, refusing to skip a night out for fear of what they might miss. I am here to say that these things are all OK. Let us channel what others label as sloth into the most memorable two months of our college careers. As the sun comes out and The Crossing fills up, let us bask in our lack of responsibilities and soak in the sunlight of our free hours. It is true that life will never again be the same, for better or for worse.'
That is precisely why it is time to take advantage of every opportunity that comes along to relax and enjoy being a Jayhawk for these spare moments we have left. This is a call to arms, ladies and gentlemen, a sounding of the bugle from atop Mt. Oread.
As seniors, we owe it to ourselves to leave our mark on this University as one of the greatest classes to ever swagger down the hill. This is not a defined movement with one clear purpose; rather, it is individualistic in nature; but ultimately glorious in its celebration of all that it means to be a senior at the greatest school in the land.
Make it your personal mission to enjoy your last days to their fullest extent. You are making every one of your fellow classmen proud. Stand tall and party hard, senior. It's not over yet.
- Johnson is a Edmond, Okla., senior in journalism
Free All for
Free for All callers have 20 seconds to speak about any topic you wish. Kansan editors reserve the right to omit comments. Slanderous and obscene statements will not be printed. Phone numbers of all incoming calls are recorded.
Call 864-0500
How do you expect Delta Force to adequately meet our students' needs when they can't even draw an equilateral triangle?
If you've got an iPod on campus, watch out. There's 800 million of you, and I'm gonna steal one of them. No way I am paying 300 bucks when all these idiots are walking around with free ones.
I'm just curious to know if I'm the only one who spent his entire spring break watching "Judge Judy."
Quit publishing KU basketball articles. I'm getting depressed.
I'd like to give a big thanks to the front page reminder as to why I'm not watching my Jayhawks in the NCAA Tournament. As if we didn't already know!
Dear University of Kansas, 14th Street is not open, and you promised it would be open by the end of March. You have two days to meet your deadline. If you do not, the scholarship hall children will have to write a lot of angry letters. That is all.
♦
Keep discrimination out of Kansas. Vote no on the gay marriage amendment April 5.
To all the people with kegs, I've got you beat; I just snuck a puppy into Oliver.
Short skirts on a warm spring day make me happy.
I hate that the Free For All is buried at the bottom of the page. In other news, Xange and the KU Student Senate have the exact same logo.
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Is anyone on campus a 34-D? Because if I can't find anyone on campus to give my bras to, I'm going to burn them.