For students across region, some hope to handle crushing college debt

Curtis Jackson expects to graduate from the University of Delaware with a degree in foreign languages, hopes of becoming a rock musician - and $60,000 in debt.

The 19-year-old sophomore is considering taking a year off school to work and save money, just to keep up with rising college costs.

"I don't expect to find a job with my degree at all," he said. "The way that I see it, I'm kind of just digging a hole."

On Wednesday, at the University of Colorado in Denver, President Obama outlined a plan to help millions of borrowers lower their payments and consolidate their loans - and help students like Jackson fill in some of that hole.

Across the Philadelphia region, at Temple University and Drexel University, at the University of Pennsylvania and Rutgers University in Camden, students outlined stories of crushing debt that they fear could follow them for decades.

"It's always risky to take out loans. It's going to come back to haunt you," said Caity Collins, a 19-year-old sophomore at Temple who owes about $13,000.

Obama's plan offers some mental relief, she said. But she has an aunt who was 43 before she finally paid off her college loans. And that's worrisome.

Obama said he would use executive power to provide relief in two ways:

First, he'll accelerate a measure that cuts the maximum repayment on student loans from 15 percent to 10 percent of discretionary income. The White House wants that to take effect in 2012 instead of 2014.

About 1.6 million borrowers could be helped.

Second, the president's plan will let borrowers who have both a direct government loan and a loan from the Federal Family Education Loan Program consolidate their payments. The interest rate on the consolidated loan could be up to 0.5 percent lower. That could help 5.8 million more borrowers.

"When a big chunk of every paycheck goes toward student loans instead of being spent on other things, that's not just tough for middle-class families," Obama said, "it's painful for the economy and it's harmful to our recovery because that money is not going to help businesses grow."

In Pennsylvania, the White House estimates, more than 60,000 current students could lower their monthly payments, and more than 232,000 borrowers could reduce their interest rates and simplify payments by consolidating their loans.

"I think it'll help some students," said William Cutler III, an emeritus professor at Temple who studies the history of American education. "The students who will more likely benefit go to public universities like Temple, where students are less affluent, and more likely to rely on public sources of funding."

During the last 80 years, he said, a college degree has become a prerequisite for a middle-class job. That wasn't true during the Depression of the 1930s or even the rough economies of the 1970s.

Graduates are finding that a degree that was once a ticket to a well-paying, fulfilling career is often not enough to land a job.

Unemployment rates for recent graduates have risen sharply in the last two years, and starting salaries have dropped, according to a study by the John Heldrich Center for Workforce Development at Rutgers University.

Government figures show that one in three people ages 20 to 29 was unemployed in 2010. In Philadelphia the situation was worse, with barely more than one in two on a payroll.

That's harming the ability of students to repay their loans. Last year, borrowing students left college owing an average of $24,000.

In Pennsylvania, students at four-year public and private schools graduate with an average $27,066 in debt, according to the Project on Student Debt. In New Jersey, students carry an average of $22,731 in debt.

New data from the U.S. Department of Education show a rise in the default rate: Nearly 9 percent of borrowers who entered repayment in 2009 had defaulted by the end of 2010, up from 7 percent for those entering repayment in 2008.

During the last 30 years, the average cost of tuition and fees at American colleges has nearly tripled. Paying for college has become the typical family's second-largest investment, behind the mortgage. A new College Board report shows in-state tuition and fees at four-year public colleges rose an average 8.3 percent this fall.

Students need money to pay for those increases. But not all students see Obama's plan as positive.

Zac Byer, 23, a Penn Law school student, said it "may help in the long run, but sends the wrong message in the short run. The message is that you can borrow money and make personal decisions without having to face the full repercussions."

He believes the plan will encourage people to pursue expensive degrees without knowing if they can afford them. He expects to graduate with about $125,000 in loans.

"It was my decision to take the loan," he said, and "the monetary implications should be my burden to bear."

Overall, in 2010-11 the average annual in-state tuition and fees at public, four-year colleges reached $7,605, up from $2,119 in 1980-81, according to a Pew Research Center study. That's a 259 percent increase. At private schools, the cost grew from $9,535 to $27,293, a 186 percent increase.

Ashley Taylor, a 19-year-old Rutgers-Camden student, plans to cut her schooling to part time and get a job, so she can pay tuition and a $6,000 loan.

Taylor, who hopes to become a pastry chef, finds her new financial responsibilities daunting.

"It's just like a brick to the face," she said. "You really have to grow up quickly and understand all these responsibilities that just come hurling toward you."

For many students, the increases in college cost translate directly to debt, an average $34,430 per borrowing graduate in 2010-11, according to FinAid.org, a website that studies student aid.

Sarah Kenyon-Dioso, a junior prelaw major at the University of Delaware, expects to face $1,900 in loans when she graduates in 2013 - rising to $150,000 after law school.

She's so frightened by that prospect that she sacrifices now. For instance, she commutes to school, so she can avoid paying for on-campus housing. And she forgoes having a meal plan.

She's happy for the help from the Obama administration, she said, but still expects it will take 20 years to pay off her college debts.

"Make the barriers less - make it less complicated to get into college, to graduate from college," she advised. "No 22-year-old wants to have $50,000 over their head after the day they graduate."

By any measure, young people are having a tough time launching their adult lives.

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