Posted on October 20 2010 by Andrew Kelynack

Wake Tech addresses surge in student debt

RALEIGH — Blake Leonard appears to be the type of student Wake Technical Community College administrators had in mind for a speakers series on financial management. Leonard, 24, a part-time student from Raleigh studying construction management, has racked up $6,000 in loans, so far.

“I hope to have a well-paying job when I get out of school, so I’m not really worried” about paying back the loans, Leonard said. But, noting the sluggish economy and his own loss of an engineering job two weeks ago, he added: “Anything can happen.”

Leonard may or may or not have reason to worry, but Wake Tech administrators want to make sure students such as he are not getting in over their heads. He is not the only Wake Tech student whose big debts could be a drag on career dreams. In the past three years, the number of Wake Tech students taking out loans has doubled, according to Wake Tech spokeswoman Laurie Clowers.

Wake Tech President Stephen Scott sees it as a troubling trend. He said community college students traditionally have not left school with as much debt as students at four-year universities.

Scott blames the economy. The typical Wake Tech student has been a part-time student, he said. In the past, they have covered their education expenses through income from their jobs and grants.

“But now, because of the rise in unemployment, we’re seeing more and more students who are having to get loans in order to live,” Scott said. “It’s not so much so they can’t pay for their education – they’re using it for living expenses.”

The rising tide of debt so concerned Scott that he sought to start a speaker series on financial planning. The venture got a big boost Tuesday when RBC Bank came through with a $20,000 donation to underwrite it.

Clowers said concern about debt is more pronounced at Wake Tech than at some other Triangle higher education institutions – even if grads at those institutions leave school with even higher debts.

“Duke medical grads may come out of school with a $100,000 debt, but they are going to come out and get jobs with six-figure salaries,” she said. “We train people to be policemen and electricians and automotive technicians and chefs and cosmetologists. These types of professions may not necessarily come out and make six-figure salaries.”

More and bigger loans

The average Wake Tech student took out $3,515 on average in new loans last year, according to Clowers. From the 2007-08 school year to the 2009-10 school year, the number of students with loans more than doubled, rising from 1,994 to 4,053, Clowers said. In that time, the total indebtedness for Wake Tech students almost tripled, from $5.5 million to $14.2 million.

“More students are taking out loans, and each student is taking out more loans,” Clowers said.

It’s a nationwide problem. President Barack Obama has targeted student debt as a major concern in his higher education policy. According to the White House website, about two-thirds of graduates take out loans with an average student debt of more than $23,000.

“This debt is particularly burdensome for graduates who choose to enter lower-paying public service careers, suffer setbacks such as unemployment or serious illness, or fail to complete their degree,” the website says.

An Obama administration initiative aims to lighten this burden. Among the resources the initiative offers struggling students is a provision that, after July 1, 2014, new borrowers taking part in the income-based student loan repayment program will be able to cap their student loan repayments at 10 percent of their discretionary income. If they keep up with their payments, they will have the balance forgiven after 20 years, according to the White House website.

Public service workers – such as teachers, nurses, and those in military service – can get debt forgiven after just 10 years. More than 1.2 million new borrowers are projected to qualify and take part in the program, the website says.

Workshops planned

Details of the Wake Tech speaker series have yet to be worked out, but the workshop series will probably start early next year, Scott said. It will be entitled “RBC’s Dollars and Sense” and will include at least four sessions.

“We’re going to teach students how to do a budget and how to borrow money correctly and when to borrow money, how to purchase cars and homes and even how to plan for retirement,” Scott said.

He said that the classes will be for students but that a lot of people in the working world could probably use them, too. He added: “People spend more time planning for a vacation of one week than they do planning the rest of their lives.”

Get the biggest news in your email or cellphone as it’s happening. Sign up for breaking news alerts.

Similar Posts:

Share

Leave a Reply