More and More Women Are Drowning In College Debt
Erika Civitarese knows about hard work - and making ends meet. As a teenager in small-town Massachusetts, she logged up to 40 hours a week at an Auntie Anne’s pretzel shop so she could afford clothes and car insurance. In her spare time, she raised money for survivors of domestic violence. Erika figured she’d keep working after high school and apply for college once she’d stockpiled enough funds for tuition. But her guidance counselor, she says, urged her not to put her future on hold.
In March 2013, Erika got the letter that changed her life: The University of Massachusetts at Amherst, the crown jewel of the state’s public school system, wanted her. And they were offering what looked like a near full-ride - more than $22,000 in financial aid, just shy of the school’s $23,697 yearly in-state cost. The package was a mix of a scholarship, grants, and federal loans, but the particulars didn’t really register with Erika, then 17. “I was like, cool, lots of money,” she says. “Tuition and fees, housing, and meal plans - the aid I got covered it all.”
That summer, she spent the last of her savings on books, linens, and a mini fridge for her dorm room. “I was pumped!” she says, until a few weeks before school started, when her mom logged on to Erika’s financial-aid account to find that more than $10,000 of her money had vanished. A frantic series of phone calls to UMass revealed that Erika’s aid had been adjusted due to a small property sale on her parents’ tax return. (The initial offer had said the money was subject to eligibility.) Erika pleaded, telling the aid office that money had gone toward medical bills for her father, a construction worker who’d had an accident. But the school told her there was nothing it could do, she says - and suggested she take out a private loan. Now committed to going to college - whatever it took - Erika borrowed $7,100 with a sky-high 11 percent interest rate. (UMass says it exhausts all other financial-aid options before suggesting students take out private loans.)
Four years later, Erika is set to graduate with a degree in communications. But her debt has snowballed to $38,851 and she expects it will be around $42,000 by the time she leaves school. “It’s scary to think how the interest will just keep building,” says Erika, now 22. “If I’d known I would owe this much, I definitely would’ve delayed college and gotten a job.”
“I’ll be working more hours than I’d like - working nights instead of having a life with my friends - to pay off these loans.”
- Erika Civitarese, 22, University of Massachusetts at Amherst
Student Debt: $38,851
After Erika’s grant money - not to mention her work study - was yanked before she arrived on campus freshman year, cutting her aid nearly in half, she followed the advice of the financial-aid office and took out private loans. She’ll soon have a BA in communications ... and crushing debt she’s already worried about defaulting on.
Getting Hit Close to Home
It’s no secret that students can rack up debt at costly private universities. What is shocking: 61 percent of this country’s indebted women didn’t go fancy. Like Erika, they attended public colleges, according to an analysis of government data by Mark Kantrowitz, publisher of Cappex.com, a website that helps students make informed college decisions.
Used to be, not-for-profit state universities were a vital part of the American dream, engines of upward mobility that guaranteed young people from all backgrounds access to education and opportunity. Now, that opportunity comes with sticker shock. The average public student graduates with around $27,000 in debt, a figure that has more than tripled in the last 25 years.
The most obvious reason is the skyrocketing cost of tuition, which rose more than 200 percent between 1997 and 2016. One culprit: States are cutting public-school funding; per-student spending decreased by 21 percent between 2008 and 2014 alone, according to a report by Young Invincibles, an advocacy group for Millennials. This has created an unprecedented mess, with the neediest students paying for the cleanup, quite literally. As young scholars help finance their local public universities with loan money, the schools themselves “are replacing lost revenue in part by accepting more out-of-state and international students, who tend to be better-off and pay higher tuition rates,” says Kantrowitz. To entice these kids, colleges dangle a dwindling number of scholarships and grants in their direction and make expensive campus upgrades.
Walk around UMass at Amherst - which in 2015 accepted more out-of-state than in-state students for the first time in its history - and you’ll see a new multimillion-dollar “football performance center,” a structure that’s meaningless to struggling students like Erika but that helps attract better players and alumni money. Adding to the frustration: The football team can’t manage to fill its stadium.
“Getting my living expenses covered is a continuing struggle for me. I couldn’t afford a textbook freshman year and would have failed the course if a friend hadn’t loaned me hers. I opted out of having a meal plan last semester to save money.”
- Kara Freise, 19, State University of New York at Fredonia
Student Debt: $20,120
In high school, Kara lived in a homeless shelter. She left for college without a dollar to her name. Last summer, the double major in music therapy and psychology slept on friends’ couches so her entire Pizza Hut paycheck could go to school bills. She expects to owe around $40,000 by the time she graduates.
The True Cost of College: $24,610
Compared with typical fees at a private university, the price of public-school tuition sounds like a sweet bargain - until you factor in housing, food, books, transportation, and other real-life expenses. The average full-time, four-year, in-state student’s college bill for the 2016–2017 school year was a no-joke $24,610. (Source: The College Board)
A Public Problem
Shrinking state budgets are only part of the issue, as Morgan Atteberry, now 21, learned when she arrived in 2014 at the University of Georgia on a state-administered HOPE scholarship. “Being a UGA Bulldog had been my dream since I was little,” she says. So had becoming a pharmacist. To that end, she says, her adviser suggested an overwhelming course load, including chemistry and pre-calculus.
“In retrospect, my classes should’ve been spread out,” says Morgan. With endless work, she failed pre-calc and lost HOPE (which covered about 80 percent of her tuition and requires a 3.0 GPA). In order to stay in school, she abandoned her yearned-for career and switched to special education, taking out some $12,000 in loans. Cruelly, the swap may leave her in debt longer: The average special ed teacher makes $58,000, while pharmacists can pull in $122,000.
In cases like Morgan’s, the rules seem clear-cut - keep up your GPA and keep your money. But the truth is murkier, according to the University System of Georgia’s latest data. Nearly 60 percent of HOPE scholars at UGA lose their funding, with only 19 percent of those earning it back. “An interesting thing about these scholarships is that they wouldn’t work unless a substantial number of students lost them,” says William Doyle, PhD, associate professor of public policy and higher education at Vanderbilt University. “They are designed to get people in the door. The positive is, more people go to college. The negative is, a decent number of them lose funding.” (UGA says it focuses on students’ academic success, not their finances. “We don’t look specifically at how you can retain HOPE,” says Rahul Shrivastav, PhD, the school’s vice president for instruction.)
It’s not just state aid that dries up. Colleges insist they don’t front-load their own scholarships. “But look at the data that shows students get more financial aid in their first year than they do in later years,” says Sara Goldrick-Rab, PhD, author of Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream. “Some colleges are behaving badly.”
The fallout lands squarely on the shoulders of poor, inexperienced teenagers. Once enrolled, they’re rarely advised on how to keep their aid, which can be yanked for frustrating or confusing reasons (one bad grade, the slightest change in family income). And while federal law mandates student loan counseling, colleges often deliver it via a 20- or 30-minute e-course. The result: 37 percent of students underestimate how much they really owe, according to an Iowa State University study; 13 percent don’t know they have loans at all. What’s worse, often students aren’t alerted that they’re about to lose their aid until it’s too late. This is a critical problem, since as little as $1,000 in revoked funding puts them at higher risk for dropping out, per the Education Advisory Board.
“Clearly, the goal is not to actually help students,” says Goldrick-Rab. “The goal is to say you helped them. This is not the system we would build if we wanted ordinary people to get through college.”
Left to their own devices and eager to graduate, students borrow more and
more (Morgan’s estimated eventual total: $30,000). But those who drop out are in the worst position of all. Without a degree, they’ll be less likely to find a job or to pay back their loans - and defaulting can ruin their credit, hobbling them financially for years to come.
“Look at these kids, the problems they face, the debt they graduate with,” says Max Page, PhD, a UMass at Amherst architecture professor and founding member of the Public Higher Education Network of Massachusetts. “The irony is that the smartest kid might be the kid who reasonably says, ‘I can’t go. I can’t go into debt. I can’t take that risk.”
“I feel a lot of shame. I lose a lot of sleep. I’m working up to 50 hours a week on top of school, doing homework on my phone. I feel like I’m stuck in a system that isn’t built for success. There is always a roadblock and, beyond that, another roadblock. But I don’t want the debt without the degree - when I walk across that stage, it’ll be because I want to say, ‘You didn’t break me.’”
- Tiara Burtin, 22, University of Missouri at St. Louis
Student Debt: $54,200
Tiara worked hard to secure enough aid to go to college. She lost a large chunk of her money sophomore year, after debilitating endometriosis left her unable to attend classes regularly, affected her grades and credit hours. Determined to graduate, she took on tens of thousands of dollars in loans.
Living in Limbo
Owing money doesn’t just cause financial angst - it puts futures on hold, causing...
21 percent of borrowers to postpone getting married.
28 percent to delay starting a family.
43 percent to move back in with their parents after graduation.
54 percent to take a job outside their field of study.
55 percent to hold off on buying a home.
62 percent to defer saving for retirement.
(Source: American Student Assistance 2015 Survey)
The Aid Quagmire
Questionable school practices aside, even the most careful budgeters can get lost in the financial-aid labyrinth, says Goldrick-Rab. “This is an enormously complicated system that a PhD might have trouble navigating.”
It starts with a fat acceptance letter - one of life’s great thrills - that often includes a difficult-to-decipher financial-aid letter, which may not even distinguish between free money and what needs to be paid back with interest. “These letters can be so deceiving,” says Paula Bishop, CPA, a college financial-aid consultant in Bellevue, Washington. “I’ve had more than one client say to me, ‘Look, I have a free ride!’ But it’s not a free ride. It’s a $30,000 loan.”
In 2013, the U.S. Department of Education (USDE) implemented the Financial Aid Shopping Sheet, a document that demystifies the cost of a college (including tuition and living expenses) and delineates grants, scholarships, and loans. The sheet makes crystal clear what a student or her family will owe. “It was a godsend,” says Bishop.
According to the USDE, more than 3,200 colleges now use the sheet. But when Cosmo reviewed a random selection of 2016–2017 financial-aid letters provided by the College Funding Service Center in Waterford, Connecticut - which helps students navigate financial aid - we found that 19 of 30 state universities claiming to use the Shopping Sheet actually weren’t.
Then there’s the Free Application for Federal Student Aid, or FAFSA, a form students must submit each year to secure government loans, which are typically low-interest. Administered by the USDE, its algorithms can overestimate how much a family can contribute toward a child’s education. And FAFSA verification, a vetting process that happens after aid letters have been sent out, may squeeze students’ aid further. In an awful twist, “economically disadvantaged students are about 20 percent more likely to be selected for verification,” says Lindsay Page, PhD, who has studied FAFSA.
Celeste Villalobos, 20, is well-acquainted with FAFSA’s shortcomings. Right before her freshman year at the University of California at Riverside, Celeste got notice that her family was on the hook for $6,191 - the amount the government calculated they could afford, based on their income. This was news to her parents, a supermarket-warehouse worker and a home health-care aide who already had a son in college. Despite Celeste’s filling out her FAFSA correctly, the government erred in calculating the family’s expenses, according to Maira Hernandez, at the time Celeste’s counselor at Bright Prospect, a nonprofit dedicated to helping low-income kids go to college. “These kinds of mistakes are happening more and more to public school students,” says Hernandez. Celeste says her FAFSA misinterpretation doubled the amount of the high-interest private loan she had to take out to cover her parents’ bill. (This is on top of more than $10,000 in federal loans she’s on the hook for.) Now a junior, she’s working the register at McDonald’s - and estimates that that $6,191 will cost her $13,000 by the time she pays it off.
"I spent seven months living out of my car in 2016. I joined a gym around the corner from school, so I could shower and change. I was working as a teacher's aide. No one knew what I was going through."
- Tanisha Saunders, 27, California State University at Dominguez Hills
Student Debt: $19,744 (plus $3,700 in credit-card debt)
She wants a degree more than anything, but after several attempts to graduate - she sometimes worked three jobs while attending school full-time - what Tanisha has instead is overwhelming debt. Unable to afford rent, she's now staying with relatives, commuting two hours to and from campus each day.
Why Women Rack Up More
Working long hours - at McDonald’s or elsewhere - isn’t the answer, says Alan Byrd, dean of enrollment services at the University of Missouri at St. Louis. “This whole vision of working your way through college is almost unrealistic at this point. We have students with two jobs who can’t make their monthly payments. Even with a full ride, they can’t buy toiletries or eat on the weekends.”
Worst off are women. The downside of their hard-won educational equality - they now comprise 56 percent of undergraduates in the U.S. - is an unequal share of the debt burden. Women take on more and bigger loans than men, according to a new report by the American Association of University Women. And because college-educated women in full-time jobs earn about 25 percent less than their male peers do, it takes them longer to pay the money back.
Real solutions will require reform of just about every part of the financial-aid system. Progress has been glacial but hopeful. This year, Senator Elizabeth Warren and Congressman Joe Courtney reintroduced a bill that would allow people with federal loans to refinance at current interest rates, lowering their monthly payments. And in July, Maryland restricted scholarship displacement, the sketchy practice of schools stripping financial aid from motivated students who seek supplemental scholarships elsewhere.
Some universities are also stepping up. UGA has instituted smaller class sizes for certain courses, including - too late for Morgan Atteberry - pre-calc. (Failure rates dropped from 33 to 14 percent over the fall 2016 semester.) Nearby Georgia State University gives students who lose HOPE scholarships and agree to academic interventions $1,000 to help them try to reclaim funding.
Also fighting are everyday women: Florida International University student Alexis Calatayud, 23, who lost $12,000 in scholarships after her freshman year, has worked with her school to create a warning system for students on the cusp of losing aid.
In March, Erika Civitarese testified before the Massachusetts Legislature in support of free public college education - an idea that’s being introduced in some form in cities and states around the country, including San Francisco, Tennessee, New York, and Rhode Island. “We hear a lot that ‘college is an investment,’” she told the committee. “So why aren’t we investing ... [in] these institutions that we want [students] to thrive in?”
Slated to graduate this month, Erika will soon be back at home, waitressing at a local café. She wants to work at a record label or as a DJ - goals that would require moving to a city, “where I’d have to pay rent and car insurance and utilities ... and my loans,” she says. With her dreams on hold, she feels stuck: “I did not go to college to end up living with my mom and serving coffee.”
“In the school’s eyes, my parents can help pay for college. They can’t - their money goes to rent and food. The only way I can afford my private loan is to start paying it off while I’m still in school.”
- Celeste Villalobos, 20, University of California at Riverside
Student Debt: $16,694
An aspiring social worker, Celeste believes her federal-aid application was misinterpreted, forcing her to take out a high-interest private loan. In addition to class, she works up to 16 hours at McDonald’s on the weekends to pay off her debt and avoid more loans.
Student Loan SOS
The best way to deal with debt: Accrue less. Or if you’re already in deep (no judgment), learn to work the repayment system. Here’s how to stay solvent.
If You Need Money...
Apply for an under-the-radar scholarship. Websites like AAUW.org and Scholarships.com act as databases for private aid, including scholarships just for women, says Sara Goldrick-Rab, PhD.
Get the best advice. Make sure your academic adviser knows you need to maintain your aid. Visit her before enrolling in classes every semester to discuss how difficult and time-consuming each course will be.
Seek emergency cash. Some colleges are creating emergency funds for students facing illness, family deaths, and more. “These are often held by individual departments in addition to or instead of the financial-aid office,” says Goldrick-Rab. Start by checking with the dean of students or student affairs.
Think beyond financial aid. If you’re really struggling, try applying for the earned-income tax credit or government-run programs like food stamps, says Goldrick-Rab.
If You Owe Money...
Work in public service. Spend 10 years in a government or tax-exempt nonprofit job - while making on-time monthly payments - and your remaining federal student debt will be forgiven. (Less amazing: President Donald Trump has threatened to abolish this policy.)
Refinance. Consolidating your loans - federal and private - with a lower interest rate (aim for less than 5 to 6 percent) can lower your monthly payments. Shop SoFi.com or LendEDU.com for the best deals.
Adjust your monthly bill. Go to StudentLoans.gov and check if you qualify for an income-based repayment plan, which will cap your federal loan payments at 10 or 15 percent of your salary (meaning, you won’t have to pay more than you need to live on).
Set up automatic payments. Some lenders offer interest rate reductions of 0.25 or 0.5 percent if you do. Call your loan service provider to check.
Ask your employer to chip in. Some companies now offer student-debt assistance. Aetna, for example, matches up to $2,000 a year in loan repayments. Not at your job? Ask HR to consider launching a program.
Nab your tax breaks. You can deduct up to $2,500 of interest on your federal tax return. (Sites like TurboTax .com make this as easy as a few clicks.)
This article was originally published as "Caught in the College Trap" in the September 2017 issue of Cosmopolitan. Click here to subscribe to the digital edition.
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