Two-thirds of students borrow to pay for college. One in 10 have
loans of $35,000 or more. Do you have to go broke to get a B.A.?
Not with these moves you don't.
When Jessica Barba was deciding where to go to
college, she didn't factor how much she'd have to borrow into
the equation. She knew that her parents could afford to contribute
only a few thousand dollars and that she'd have to make up the
rest. But all the Virginia native could think about was how much
she wanted to live in New York City. "I was 17 years old,"
says Barba, now 26. "The idea of going to school in New York
seemed like the coolest thing in the world."
So
when Barba got the nod from New York University, she accepted—even
though she'd have to take out more than $100,000 in loans over
four years to pay for it. Even though she'd have had to borrow
only half as much if she'd gone to the University of Chicago or
Pittsburgh's Carnegie Mellon, where she was also accepted. But
neither school was in New York. And at 17, "the difference
between $50,000 and $100,000 didn't register," she says.
"It all seemed like a lot of money."
Exactly how much sank in soon after Barba graduated
in 2001. Working at a nonprofit, Barba took home $1,800 a month—not
nearly enough to cover loan payments of $900 a month while paying
for food, clothing and rent on a New York City apartment. Her
parents had to step in. Currently they're shelling out $2,000
a month to pay off loans and grad school bills for Jessica and
her two younger brothers. Says John Barba, 59, a school psychologist
in Oakton, Va. who drives his late dad's 13-year-old Buick and
watches his expenses closely: "It's a drain—like having
a second mortgage."
Welcome to the new reality of paying for college—and
the crushing debt that often accompanies it. With tuition rising
more than twice as fast as inflation and grants shrinking as a
share of the financial aid pie, more and more students feel forced
to borrow ever larger amounts to pursue their college dreams.
From 1993 to 2004, the median federal loan for new graduates jumped
63% to more than $16,000. One in 10 students at private college
owe more than $40,000. And that's not even counting how much Mom
and Dad borrow to help pay the bills.
