Financial debt complicates students’ lives

By Emily Steinhardt

Even though she has a full time job and is working more than 40 hours a week, Katie Ferrara, 25, of Downingtown Pa., is barely breaking even when it comes to paying her debt and other bills due to college.

Ferrara attended Neumann University from 2009 to 2013 and majored in nursing.

“I payed no money upfront because I didn’t have anything to pay with,” Ferrara said. “I had $80,000 in scholarships and yet I was still approximately $110,000 in debt when I graduated.”

College debt forces Ferrara to make hard decisions like what bills will she pay first because there isn’t enough money to pay for everything. “I have to be really careful about the things I buy and the things I do,” Ferrara said.

A long sigh escaped her lips as she talked about the frustrations that come with not being able to save any money at this point.

“It causes me a lot of anxiety,” Ferrara said. “I have seen it in a lot of my friends too. After all, money is the forefront of everything we do.”

Ferrara is not alone.

According to The Institute For College Access and Success, approximately seven in 10 seniors (68 percent) who graduated from public and nonprofit colleges in 2015 had student loan debt, with an average of $37,172 per person. This is a four percent increase from the average debt of 2014 graduates.

America’s Debt Help Organization reports that $3,000 of student debt are accrued every second while the total U.S. student debt is $1.2 trillion.

A survey conducted online in Feb. 2016 by research agency TNS on behalf of Citizens Bank found 59 percent of the millennials polled have “no idea” when they will be able to pay back their student debt. More alarming was the fact that 15 percent of those polled by TNS said they weren’t sure what their student loan balance was, and more than a third didn’t know what the interest rate is on this debt.

According to The College Board, the cost of college has increased 13 percent for public four-year colleges, and 11 percent for private nonprofit four-year college in the last five years.

“The long-term cost of college continues to be a major challenge for Millennials, even after they have established themselves in the workforce and significantly improved their credit from where they were when they started school,” said Brendan Coughlin, president of Consumer Lending for Citizens Bank.

Coughlin thinks that as this generation of college graduates start to contemplate future life events like home purchases and retirement, it becomes increasingly important for them to take control of their college debt, whether through refinancing or other tactics that can help them limit its impact on their overall financial health.

According to LendEdu, the Class of 2016 was the most indebted class in history.

This is having a crippling effect on economic activity, says Barbara O’Neill, a specialist in financial resource management for Rutgers University.

“A lot of things are being postponed. You’ve got what you call a crowding-out effect, people only have so much money,” she said. “There’s a lot of business activity that isn’t taking place. It’s a drag on everything.”

Fewer people are buying homes and cars, O’Neill says, because large portions of their income are being eaten up by student loans.

According to Federal Student Aid, an office of the U.S. Department of Education, there are plenty of different types of repayment plans borrowers can take advantage of to pay back their debt. These plans are based on the type of loan they received and how much they borrowed.

Before a loan enters repayment, a borrower will be contacted by a loan servicer, which is an organization that manages loans and collects payments on behalf of the loaner. The loan servicer helps select the repayment plan that works best for each person.

Today, Ferrara is a registered nurse and is working in the home health section.

“My goal in life is to continue advancing in my nursing career as well as get my masters degree and eventually start a family and buy a house,” Ferrara said.

Unfortunately, Ferrara explained that as she’s been looking for a masters program she’s found she can’t afford any right now.

Ferrara said she hopes to be able to travel more in the future, when she’s more in the clear with her debt. “I really want to go to Ireland, Scotland, and really the whole UK area as well as travel the country,” Ferrara exclaimed.

Contact Emily Steinhardt at

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