In Student Loans Weighing Down a Generation With Heavy Debt, the New York Times introduces yet another debt-doomed borrower: Kelsey Griffith, 23, borrowed $120,000 to earn a marketing degree from Ohio Northern University. She’s working two restaurant jobs and will move in with her parents while looking for a marketing job.
Her father, a paramedic, and mother, a preschool teacher, have modest incomes, and she has four sisters. But when she visited Ohio Northern, she was won over by faculty and admissions staff members who urge students to pursue their dreams rather than obsess on the sticker price.
“As an 18-year-old, it sounded like a good fit to me, and the school really sold it,” said Ms. Griffith, a marketing major. “I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”
Ninety-four percent of students who earn a bachelor’s degree borrow to pay for higher education — up from 45 percent in 1993, according to a Times analysis of Department of Education data. This includes federal and private loans.
Elite colleges with big endowments can offer generous financial aid — and a degree that’s valuable in the labor market. Ohio Northern charges $50,000 a year for a degree of moderate economic value. “Pursue your dreams” is a cruel hoax being played on 18-year-olds and their financially naive parents.
Only 38 percent of payments on federal student loans are being paid, down from 46 percent five years ago, the Times reports. Some borrowers are still in school. Others have deferred payments. Some have defaulted.
Forty percent of recent college graduates have delayed a major purchase, such as buying a car or a home, because of college debt, estimates a Rutgers study. Only half of the surveyed graduates had a full-time job.