THE STUDENT VOICE SINCE 1904
THE UNIVERSITY DAILY KANSAN
PITCHERLIFTS TEAM'S SPIRIT
West Coast player finds
place on Kansas' field
PAGE 18
WEDNESDAY, MAY 7, 2008
STUDENT SENATE RECEIVES GRADES
Outgoing administration's platforms reviewed
>> PAGE 3A
WWW.KANSAN.COM
VOLUME 118ISSUE 146
CAMPUS
Mindy Ricketts/KANSAN
Piles of left-behind books clutter a study table inside the Watson Library stacks. Regina Kuhmann, a service desk assistant at Watson, said that the library gets much busier during finals." This time of year everyone returns their books," Kuhmann said.
Libraries prepare for finals rush
As finals week approaches, students are filling the campus libraries in search of a quiet place to study. Both Watson and Anschutz will extend their hours during finals week to accommodate students. The libraries will also try to ease students' studying with cocoa, coffee and lemonade. Rebecca Smith, KU libraries director of public relations, said the libraries see a definite increase in students during finals.
FULL STORY PAGE 10A
ASSOCIATED PRESS
DEATH TOLL IN BURMA INCREASES
More than 22,000 reported dead after cyclone FULL AP STORY PAGE 4A
index
Classifieds...4B
Crossword...6A
Horoscopes...6A
Opinion...7A
Sports...1B
Sudoku...6A
All contents, unless stated otherwise
© 2008 The University Daily Kansan
GENERATION DEBT
SOME CREDIT COUNSELORS THINK TODAY'S STUDENTS WILL HAVE MORE DEBT THAN ANY GENERATION SINCE WWII
BY ANDY GREENHAW agreenhaw@kansan.com
Adding in the compounding interest on his unsubsidized loans, the Independence junior figures he will owe about $288,000 when he begins his career as a dentist in 2011.
Kolby Lanning has borrowed $55,000 in student loans to finance his first three years at the University of Kansas. He will have borrowed $200,000 more by the time he completes his senior year and dental school at the University of Missouri at Kansas City, Mo.
A growing dependence on borrowing from private lenders has compounded the situation as these lenders make it easy to get larger loans that come with higher-interest rates than federally insured loans. Private lenders are now becoming harder to find as the economy and new federal legislation are forcing a growing number of them to suspend their student loan programs.
“It's hard to believe your debt can add up that much in such a short amount of time,” Lanning said. “I guess I never really took the interest into consideration.”
As college tuition and living costs continue on a steady, upward spiral, Lanning will graduate into what some credit counselors are calling "Generation Debt," which is made up of students who financed their college educations by taking out ever-increasing amounts of student loans.
According to the KU Office of Financial Aid, the accumulated student loan debt the average KU student carried after graduation grew from about $13,700 in 1996 to more than $20,000 in 2007. The report does not include private loan debt.
Robert Baker, Lawrence credit counselor for the Housing and Credit Counseling Institute, said the increase in student borrowing was one of the reasons "a lot of people think this generation will have more
The College Board reports that private borrowing made up about 25 percent of student loans in 2007 — up from 6 percent in 1997.
A growing number of students are maxing out what they can borrow from government loan programs and are turning to private lenders to foot the rest of the bill, Baker said.
debt than any generation since World War II."
"Students in today's society have a 'buy now, pay later' approach," he said. "There's a reason the government caps its loans. It wants you to find other ways to pay for your education besides borrowing so that by the time you graduate, you don't become an indentured servant to debt."
The financial aid office estimates that the total cost of living and tuition is about $60,000 for an in-state KU student who started attending the University in 2004 and plans to graduate this year. For out-of-state students, it was about $90,000. It estimates that the average cost of living and tuition for KU freshmen who enrolled this year and plan to graduate in four years has risen to about $72,000 for an in-state freshman and about $113,000 for an out-of-state freshman.
Joan Weaver, associate director of the financial aid office, said her department limited the amount students can borrow through the University based on the estimated cost of living and tuition: $17,400 per year for in-state students and $26,908 per year for out-of-state students.
FEDERALLY INSURED VS.
PRIVATE LOANS
Weaver said her department processed both federally insured loans from the government and alternative loans from private lenders.
FinAid.org reports that Congress raised its cap last July on how much students can borrow in federal loans. Undergraduates can now borrow up to $31,000 and graduate students can borrow $42,000 more. No student can borrow more than $73,000 from the government. These loans are either subsidized — interest doesn't start accumulating more debt until after graduation — or unsubsidized — interest starts compounding more debt as soon as students borrow. Interest
Kolby Lanning Junior
Borrowed:
$55,000
Plans to borrow:
$200,000
Added interest upon graduation: $33,181
Total debt upon graduation: $288,181
Added interest over 10 years: $159,371
Total to repay over 10 years: $415,996
Future career: Dentist
Projected salary: $136,000
Monthly income: $11,333.33
Monthly payments: $3,476 for 10 years
Payments eat up 30 percent of monthly income
$288,181
rates on the government's unsubsidized loans are fixed at 6.8 percent and, starting in July, its subsidized loans will be fixed at 6 percent.
Private loans come with higher, unsubsidized interest because the lenders carry more risk — the government won't reimburse the lender if a student defaults on his or her loan. Private loans that don't go through the University are unregulated and unmonitored by the government. Students can borrow as much money
SEE GENERATION DEBT ON PAGE 4A
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