College debt load rising, but some graduates work to avoid itJames McKeown, who graduated Saturday from the University of Minnesota Duluth, escaped debt through a combination of scholarships, good planning, hard work and craftiness.
By: Jana Hollingsworth, Duluth News Tribune
James McKeown and his zero-debt status is a rarity among 2012 college graduates, as loan burdens grow in the region and across the country.
McKeown, who graduated Saturday from the University of Minnesota Duluth, escaped debt through a combination of scholarships, good planning, hard work and craftiness — knowing students with little-used meal plans and a willingness to share.
But for most students, college presents a grim financial prospect, with cuts to the federal Pell Grant program, the possible doubling of Stafford loan interest rates, and other student-aid cuts looming. Roughly three-quarters of graduates receiving degrees from UMD, the University of Wisconsin-Superior and the College of St. Scholastica this month probably carry debt, based on numbers from 2010.
The latest figures show Minnesota ranked fifth in the nation and Wisconsin ninth for the percentage of students with debt upon graduation.
And that debt? It’s a big number.
UMD students who took out loans graduate with the highest average debt among Minnesota public schools, at a whopping $31,000. UWS trails with about $24,000 and the private St. Scholastica averages about $41,000.
Tuition has increased at three times the rate of inflation in recent years, said Tricia Grimes, a policy analyst with the Minnesota Office of Higher Education.
“It’s increased faster than health-care costs,” Grimes said, and federal and state grants have not kept up.
At the same time, loan limits have increased, so students are borrowing more — and poor economic conditions have pushed more students toward higher education.
“That’s compounded by the fact that students getting out are having a difficult time finding work in this economy, and that makes it harder to repay loans,” Grimes said.
But McKeown and three other students who graduate this weekend from Duluth colleges have learned ways to shave debt and avoid building it in the first place. They emphasize careful spending, avoiding credit cards, working multiple jobs and taking advantage of scholarships. The less-ethical methods used by a few show the lengths to which some have gone to avoid big debt. Here are their stories.
Few nights on the town
St. Scholastica biology major Kyle Akervick graduates today after four years of college owing $8,300, thanks in part to scholarships, savings and work. And that’s from a school that costs $30,000 to attend next year for tuition alone.
The Duluth native credits a steady stream of work — lately, two jobs at a time — since he was a pre-teen. He has also volunteered for several years, which he says helps you figure out early what you’re interested in and looks good on scholarship applications.
At St. Scholastica, he’s worked in the health center and as a resident adviser, and he’s funneled his wages straight to tuition payments.
“I actually never saw a dollar of that money,” Akervick said. “In the past two years I’ve slowly depleted funds saved from middle school on.”
Akervick never switched his major and volunteered at a hospital to make sure his biology path was well-chosen. Though he has a car, his parents have chipped in to help him meet those costs, and he lived at home his freshman year to save money. He and his friends forgo weekend nights on the town to hang out at homes, and he makes use of his apartment kitchen to cook instead of eating out or ordering in.
“I know I don’t have the money,” he said. “And I don’t have a credit card. Don’t even go that route.”
Free meals and coupons
UMD graduate Andrew Johnson is carrying about $10,000 in debt. It’s taken him six years to get his degree because he took time off from school to work to pay off his first two years. He also took classes at Lake Superior College, earning less-expensive credits that he knew would transfer to UMD.
He’s paid his way through grants, loans, scholarships and work, but he’s gone easy on loans.
“Work to live more comfortably, and don’t rely on government loans,” Johnson advised. “Someday you have to pay them back. You don’t realize that when you sign up for them. At least, all of my friends didn’t.”
The ardent coupon-clipper has had a host of jobs, all at places where he can eat a free meal during his shift. He worked overnights at a group home, where he studied until he went to class in the morning, and he continuously checked out textbooks from the UMD library instead of buying them. Though it’s not legal, he’s always lived in houses with more roommates than stated to landlords to lower rent. He also admits to selling plasma occasionally.
Working overnights on weekends stopped him from spending money.
“When you do that, you’re not going to the Reef or Grandma’s,” Johnson said. “You sacrifice a lot of social connections, but it’s time not paying off loans. I’m trying to save every penny.”
The sociology major from New Brighton, Minn., said his parents helped out “in a pinch,” but he tried to make his own plans and pay his own way as much as possible.
“I will have to be on my own the rest of my life,” Johnson said. “I might as well get this figured out right away.”
‘Kind of stingy’
St. Scholastica graduate Kelsey Trewick is moving right into the college’s doctoral physical therapy program, and she does so about $16,000 in debt. She’s always been a saver, she said, and paid for college with a combination of scholarships, loans, parental help and her own savings. She, too, has worked through college as a volleyball referee, lifeguard and resident adviser.
“I’m kind of stingy,” she said, and that has helped keep her finances in check. “Be conscious about what you spend. Try to put some of it away in a place where you can’t touch it.”
UMD graduate McKeown, who has no debt, triple-majored in math, music and statistics. He relied on a hefty amount of scholarships, along with grants to pay for school, and worked throughout. He didn’t take out any loans. His living expenses, including rent for the house he shares with four others, are paid through work he does as a musician on weekends, and this year, from work he did as a researcher at the University of Washington last summer.
“I live cheaply, but a lot of it was scholarships,” said McKeown, a Bemidji native who will enter a doctoral math program at the University of Miami next. And a lot of it was having a “good plan.”
“Schools will always tell you you don’t need to know what you’re doing coming in,” he said, “but I have so many friends on a six, seven, eight-year plan to get their bachelor’s degree. That’s what happens if you change majors.”
Academic advisers can do a lot to help steer students in the right direction, said Susan Darge Lombardo, director of academic advising for UMD’s College of Education and Human Service Professions.
And it’s better to talk about possible major changes sooner rather than later, she said.
“We work together to help the student make a good plan, and we can catch faulty thinking in the sequence of courses,” she said. “If a student does that, it solves far and away the majority of problems and helps prevent problems.”
One key to saving money is graduating in four years to get out into the work force and avoid a fifth year of tuition, books and living expenses without a paycheck, said Eric Berg, vice president for enrollment management at St. Scholastica.
Applying for scholarships throughout college is also a smart move, he said, along with “doing your very best to minimize loans, even if that means living like a pauper in college.”
Tips for reducing college debt in school and after