Section A·Page 6
The University Daily Kansan
Friday, February 27, 1998
Loan debts accompany degrees for many graduating students
By Gerry Doyle
gdoyle@kansan.com
Kansan staff writer
Sixty percent of graduating seniors across the country are graduating with debt, and the University of Kansas is no exponent.
Almost 20 percent more students take out loans during college than three years ago, according to the U.S. General Accounting Office. The average amount borrowed also rose by more than $3.000.
Although more students at the University have been taking loans to finance their education, the increase has not been that dramatic, said Brenda Maigaard, associate director of the Office of Student Financial Aid. About 40 percent of students at the University graduate with the help of some
financial aid. Of the 40 percent, the average student with loans graduates with $13,345 in debt, she said.
About 14,342 students at the University had loans in 1997, down from 1996, in which about 15,727 students had loans, said the Office of Institutional Research and Planning.
Maigaard said the number of students with loans had slowly increased during the past 10 years, but the number varied with enrollment.
"It's been very gradual," she said. "I think the nationwide increase emphasizes the importance of education. When people leave school, get an entry-level job and suddenly have debt, it has a big impact on their lives."
Maiguard said the increase in loans probably was because of the
increased cost of education. The Office of Student Financial Aid has a debt counseling program for students concerned about their loans and credit.
The U.S. General Accounting Office reported that only 42 percent of college seniors had loans in 1992-93, and that 60 percent of college seniors had loans in 1995-96. The average debt for students at public institutions was $11,554 and about two-thirds of them worked more than 20 hours a week.
According to the Office of Financial Aid, 2,339 of last year's 5,749 KU seniors graduated with the help of loans. The lion's share of the loans were in the College of Liberal Arts and Sciences, which had 1,221 Business and engineering followed the CLAS with 183 and 186 students with loans, respectively.
Students in liberal arts begin professional life with an average starting salary of $23,370 and those with loans have an average debt of $13,445, according to the Division of Student Affairs.
The prospect of being in debt after graduation wasn't a pleasant one, said Scott Unekis, Manhattan senior. Though loans were extra financial responsibility, they allowed him to go to college.
As a degree becomes more important for getting a job, attending college at any cost becomes more of a reality, he said.
"This trend can't be very good." Unekis said. "It's hard enough just starting out fresh out of college. But you can't get anywhere without a college degree. The cost of college is rising, and you have to go, but how do you pay? That's the problem."
Higher ed proposal may lower loan rates
Deal would cut interest to 7 percent
The Associated Press
WASHINGTON — A Clinton administration compromise offered this week would reduce the interest rate on college student loans while assuring lenders a greater return than promised under a 1993 law.
Vice President Al Gore and Education Secretary Richard Riley announced the offer at a White House briefing. They released a Treasury Department report showing that unless changed, a plan due to take effect in July would cause banks to quit providing the federally guaranteed loans.
"We will insure that more students can afford to go to college and that lenders can afford to make the loans that will get them there," Gore said.
Treasury said it would take lenders about five years to turn a profit under the proposal.
The government is expected to guarantee more than $24 billion worth of new loans this year to more than 51/2 million borrowers. The new proposal is subject to congressional approval.
The issue was politically delicate. The administration did not want to be seen as caving to pressure from banks after backing a formula change in 1993 intended to make college cheaper. Nor could it afford to anger students.
The interest rate on student loans now combines the rate on 91-day Treasury bills with a fixed markup. That produces a current student-loan rate of 7.8 percent during five years.
Starting in July, the 1993 law requires a switch to longer-term, higher-rate Treasury bills while allowing a smaller markup. Students would pay 7 percent.
The return to lenders, says the
Treasury Department, would be slightly more than half what it is projected under the current formula. Banks would earn less than what they need to break even in the first year but would make a slight profit during five years.
If the presently scheduled changes were to stand, the return to lenders would have been cut by a third.
For a student borrowing $12,000, the drop to a 7 percent rate would mean $650 in interest savings in 10 years, about $65 a year, the administration said. For a student borrowing $20,000 for a masters degree, savings would amount to $1,050 in 10 years. For a student borrowing $60,000 for a professional degree, the savings would amount to $3,200 in 10 years.
"Combined with the White House proposal to reduce upfront fees on student loans, this proposal will deliver education at a lower cost to millions of students," said Ivan Frishberg, student loan specialist
with the U.S. Public Interest Research Group, a consumer organization.
Patty Cinelli
spokeswoman for the American Bankers Association.
Gore: Announced better loan rates for college students.
said no one there had seen the report. Although it is encouraging the shortterm bill would be kept, she said: "As you keep playing with the profitability of these loans and the degree of regulation, more and more institutions are going to have to pull out of the business.
"That can knock some institutions out, depending on what their margin was already," she said.
Faye Christenberry, librarian at Watson Library, plays with her two dogs, Thea and Bonnie. Bonnie, left, was adopted by Christenberry after she saw the dog in the Kansan on Feb.
19. Photo by Tara Bradley/KANSAN
Front-page puppy finds new home
Bonnie, the 8-week-old Australian Shepherd puppy who broke hearts when she appeared on the front page of last week's Kansan, has been adopted by two University employees.
Mel Desart, librarian at Spahr Engineering Library, and his wife, Faye Chayeberry, reference librarian at Watson Library, adopted the puppy Feb. 19, the same day her picture appeared in the paper.
"Bonnie's now quite happily being a typical little puppy, chewing on whatever's handy, and otherwise generally terrorizing Faye," Desart said.
Bonnie turned up at the Lawrence Humane Society shortly after her birth. Desart said.
He said the relationship between Bonnie and their other dog, Thea, also an Australian Shepherd, was still a little shaky.
"But on the whole, they've warmed to each other better than Faye and I could have hoped for," Desart said. Bonnie's picture accompanied the story "No more puppy love," which announced the Humane Society's "Prevent a Litter Month" program.
Jeremy M. Doherty
ey, you don't do summer for fun. You do it to catch up.
To get ahead. But you knew that. So if it's time to take care
of business and you're heading home to Chicago for the summer, do it at the University of Illinois at Chicago. Our summer session's got more courses than ever and since we're a four-year research university, chances are they'll transfer easily back to your school. It also doesn't hurt that tuition is a great deal and applying is easy. So, what are you waiting for? Call us.Send e-mail. We'll send you what you need to get started. Come on,you can take it.
For information about the UIC Summer Session call 800-625-2013 or, in Chicago, (312)996-9099. Or, send us e-mail at: summer@uic.edu
UNIVERSITY OF ILLINOIS AT CHICAGO