Sharon Wight considers herself lucky.
Her parents helped pay for college at what was then IPFW, and she makes regular payments to gradually reduce debt from thousands of dollars in student loans.
“I currently have debt from graduate school loans,” said Wight, 33, an adviser in the School of Education at Purdue University Fort Wayne. “I just went under the 5K mark (in February). I started at $21,000, give or take a couple hundred.”
Many students aren't so fortunate.
The cost of higher education continues to climb, and experts say the effects are worrisome. Debt levels also are rising, and more than 10% of borrowers in the U.S. have defaulted on student loans, according to a 2019 report from LendEDU, a website that allows consumers to compare financial products such as loans.
In Indiana, the default rate is 14.24%. That's the fifth worst in the U.S., according to the report, which reflects the 2016 fiscal year.
Federal student loan payments that are late by 270 days – about nine months – are considered in default. Standards for default on private loans vary by vendor.
“The consequences of student loan default can be severe, like having your tax refunds, Social Security benefits or wages garnished,” the LendEDU report says. “Your credit score will be severely damaged and you may have to deal with a lawsuit, a debt collector and, in rare cases, U.S. Marshals if you fail to address the issue.
“Unfortunately, as colleges continue to raise tuition rates, and with outstanding student loan debt in the United States at an all-time high of $1.6 trillion, student loan default only figures to be a growing issue.”
Debt is also an issue not going anywhere.
The Institute for College Access and Success launched its Project on Student Debt in 2005 and each year publishes a study that highlights data on trends in borrowing. The most recent study in September found average student debt among graduates of public and private nonprofit colleges is again on the upswing.
About 65% of seniors who graduated in 2018 had debt when they graduated, the study says, and those students owed an average of $29,200 – 2% higher than the 2017 figure.
Rates of debt vary among states and students at different colleges across the U.S., but the Institute for College Access and Success study says high-debt states generally are concentrated in the Northeast, while low-debt areas are typically in the West.
In Indiana, 57% of 2018 graduates left college with debt, researchers reported. Among those, the average debt was $29,064 – down about $500 from the year before, but up about $2,000 from 2010.
Neighboring states Illinois (66%), Kentucky (64%), Ohio (60%) and Michigan (59%) each have higher percentages of graduates with debt. All except Kentucky – $28,435 – have higher average amounts of debt held by graduates.
Michigan is highest among the group, with more than $32,000 in average debt.
Average debt in 2018 ranged from $19,750 in Utah to almost $39,000 in Connecticut, according to the study.
For Wight, who earned undergraduate and graduate degrees in communication, graduating with some debt was expected. She said her family was “right on the bubble” – with an income not enough to completely foot the bill for college but also too high to receive much financial aid.
For her first year of college, Wight's father filled out the FAFSA – the government's Free Application for Federal Student Aid – and they received a $250 loan. He never submitted the application again, she said.
“My parents lived below their means for many years, and I think that is the only reason why they were able to save for college for me,” Wight, a North Side High School graduate, said in an email. “If they had lived a life equal to what my dad was making, I am sure they wouldn't have been able to. But I also feel like if something had gone wrong (like the 2008 recession, or the pandemic today), plus other personal issues within my family, that we were one step away from my parents not being able to afford it.”
Lindsay Ahlman, associate director of research and knowledge management at the Institute for College Access and Success, points to positive aspects of borrowing to pay for college – earning the degree to kick-start a career, for example.
And while debt pay off for many, many other students struggle to repay. That can have long-term effects on their financial situation.
“Way too many students struggle to repay their loans,” she said. “Too many students do carry untenable amounts of debt.”
The Institute for College Access and Success tracks data by college, and the report shows most students who graduate from universities in northeast Indiana graduate with five-figure debt loads.
The average debt ranges from about $27,000 for Purdue Fort Wayne to nearly $42,000 for Indiana Tech graduates. Manchester University (87%) had the highest percentage of students graduating in the area with debt, which averages about $34,000.
College administrators know students sometimes struggle with the high cost of securing a degree. They say they work with students to manage payments and to try to find scholarships and other financial aid.
“Students need more help, and we need to provide that help,” said Judy Roy, executive vice president for finance and administration at Indiana Tech, where yearly tuition is about $27,000 for full-time undergraduates.
About 90% of students there get some kind of financial aid, she said, and some “funded scholarships” – money comes from donors – can cover much of the cost.
Ruth Stone, Purdue Fort Wayne vice chancellor for development, said almost three-quarters of the university's 10,000 students receive some form of financial aid.
Roy, Stone and others caution that while colleges and universities can help point students toward financial aid opportunities, much of that work should be done before students arrive on campus.
“The best place to start is really the FAFSA,” said Ahlman, of the Institute for College Access and Success.
She and other administrators said scholarships, grants and loans can come from anywhere – church groups, American Legion posts, banks, nonprofits and the government. It's possible some students miss out on funding because of that, but it's difficult to determine how much is left on the table.
Students sometimes don't apply for help because they don't know how or are intimidated by the paperwork, Ahlman said.
“I think schools have a role to play,” she said.
Guidance counselors at schools in Fort Wayne talk to students about financial aid, and districts hold regular meetings to help them and their parents fill out the federal aid application.
It's not easy to find all the necessary information, however.
Wight said she worked in the North Side guidance office while she was enrolled there. She had access to books outlining grant and scholarship opportunities.
“But those books were so hard to figure out, some of the scholarships seemed like they hadn't been updated in years,” Wight said. “I am sure students today have similar struggles – again, I was lucky.
“My education was worth it in the long run. I truly believe in education, and I have always loved learning.”
About this project
The cost of college has continued to increase, taking those who earn a degree years to pay down the debt. The topic has even been a talking point for those campaigning for U.S. president, so The Journal Gazette staff decided to take an in-depth look at the financial realities of higher education with a three-week series of stories on “Diplomas & Debt.”
• Why getting a college degree has become such an expense, including the stories of some graduates with loans to repay.
• Should parents feel obligated to contribute to their children's college costs, even if it means saving less for their own retirement?
• Financing a college education and a look at one debt-forgiveness program.
• A look at proposals politicians and congressional lawmakers have offered to make higher education more economically reasonable.
Coming May 24
• The debt repayment requirements for loans taken to finance college can affect the options graduates can consider when it's time to buy a home.
• Some students who bypass college and instead opt for trades training can find fulfilling jobs with decent salaries.
• Tuition assistance programs employers offer are popular.