National student loan debt crisis hits home for Arkansas graduates

By Katie Beth Nichols and Haley Ruiz

A post-secondary education is sold to Americans as a guaranteed path to success and eventual financial freedom, but for some, the cost is greater than they expect.

“My second year of college, I went into my advisor’s office and I just had a mental breakdown,” Molly Ballard, 29, of McGhee, Arkansas, said. “I just started crying. I was so overwhelmed by all my jobs and school and finances all at the same time.”

Ballard, now a teacher at Parson Hills Elementary in Northwest Arkansas, had nearly $54,000 in student loan debt upon graduating from the University of Arkansas in 2012 with a degree in education. Ballard’s amount of debt is abnormal — average Arkansas student loan debt was $26,800 in 2016 and nationwide it was $32,731, according to Federal Reserve data. Yet Ballard’s dilemma is commonplace. Nearly 44 million people are contributing to the $1.5 trillion student loan debt crisis in the United States, according to data from the Federal Reserve.

This is more than Americans’ auto loan debt, which is about $1.1 trillion, and credit card debt, which is about $977 billion, according to Federal Reserve data and CNN Money.

Since August, a team of journalism students from the University of Arkansas has set out to discover how student loans affect current and former Arkansas students during college and after graduation. The students found people made sacrifices large and small: going on less vacations, delaying in buying cars and getting married. They found some groups are hit harder than others. For instance, women carry nearly two-thirds of the nation’s student loan debt, according to a 2018 study by the American Association of University Women.

Ballard said she was forced to make major sacrifices due to her $54,000 in student loan debt, which means a monthly payment of $625 — a payment large enough to pay for a vacation for a family of four every year with money left over. Her father was pursuing his Ph.D. at the same time she was in school, so she was on her own when it came to finances.

She said she knew her payments would be high, but she did not realize how much it would affect her life and daily decisions. Her most recent financial sacrifice was not getting a new car when she needed one.

“I ended up getting a $500 car just to get by,” Ballard said.

Ballard had four jobs during her time at the University of Arkansas. She worked at the Mount Sequoyah gift shop, in the UA Jean Tyson Child Development Center, UA Transit and Parking and the Build-A-Bear Workshop in the Northwest Arkansas Mall.

The majority of the money was used for living expenses rather than tuition or loan repayment.

Another recent UA graduate does not regret going to school and taking out loans because otherwise, she would not have been able to get a degree – one that is invaluable to her.

Chelsey Burton, 26, a first-grade teacher at Owl Creek School in Fayetteville, said she does not have regrets racking up about $40,000 in student loan debt. Burton attended the University of Central Arkansas for two years but dropped out because she could not afford it, she said. During her years off, Burton said the idea of saving for college seemed insurmountable. So without student loans, Burton said she would not have been able to get a degree and pursue her calling as a teacher.

“I don’t think I realized at the time, when I was taking out those loans, what an impact they would have in my life long-term,” said Burton. “I just saw it as a necessary evil.”

Burton worked through college until she got married. Her husband does not have student loan debt, but she still encounters challenges, she said. There is not as much money to put toward savings or a college fund for their child, which they consider ironic given her debt load. Burton said she and her husband have less money to give back to the community, and they budget less money for going out.

“We have to sacrifice in other areas because I have to make loan payments every month,” Burton said. “I would say the biggest part of our life that’s been affected is the day to day stuff.”

Lexie Kerr, 29, of Van Buren, is a student pursuing an online Master of Social Work from the University of New England. She is about $100,000 in debt. Kerr said she received academic and dance scholarships while pursuing her bachelor’s in animal science and minor in equine science at the UofA, but she dropped out amid questions about her career path.

When Kerr re-enrolled, she did not receive much financial aid. For graduate school though, Kerr is getting assistance from the Department of Veterans Affairs because her dad is a veteran, she said. This debt burden affects Kerr in many ways. She does not take vacations, has had a second job in the past and is making payments on loans that are still in deferment, in an effort to minimize what she owes, she said. She works at a company she co-founded, Courage Therapeutic Riding Center, a facility with equine-assisted activity for individuals with special needs.

Kerr’s student loan debt burden became a more obvious burden after she was in a car accident and needed to buy a new truck. Kerr could not obtain a loan for a new truck, so she bought one from her dad, she said. Kerr said she also had difficulty paying rent, She decided to purchase an RV, and she was required to have a cosigner for the RV loan because of her high debt level, Kerr said.

There are other things Kerr cannot do because of the student loan debt. Kerr said she didn’t have enough money to buy food and diapers for a friend who was struggling.

“(My friend’s) been having a rough time,” Kerr said, “but that month I already made my payment. That money is already gone.”

Individuals who have debt can see a negative impact on their credit score, which can either harm their likelihood of receiving loans in the future or increase the cost of borrowing.

Sean Hill, 27, has about $52,000 in debt.

Hill had a scholarship that paid for almost all of his associate’s degree at Northeastern Oklahoma A&M. He received Pell Grants when he transferred to the UofA, but he did not have funding to cover textbook costs or living expenses. Hill said he worked at least five nights a week all four years of college on top of a full course load.

Hill’s student loan debt impacted his career path. He needed to get into the workforce and start making money immediately because some of his loans did not have a long grace period after graduation, Hill said.

Hill has a bachelor’s degree in animal science, but he is a closing agent at Lenders Title Group in Fayetteville.

“A lot of those companies that are based around animal science wanted several years of experience,” Hill said, “and I just didn’t have that fresh out of school.”

Hill said student loans affected his debt-to-income ratio and credit score, so he had to have another person cosign a mortgage loan when he sought to buy a house, he said. He also needed a cosigner to buy a new car after he was in a car accident.

“My credit is damn near perfect,” Hill said, “but that debt-to-income ratio hinders you, and they don’t tell you that upfront.”

Hill and other borrowers said they decided to not make too many concessions within their lifestyles in order to repay their loans sooner. Hill said he does not want to sacrifice more than he already does and live paycheck to paycheck because of his debt.

“That’s part of why I only make a little bit over the interest payment,” Hill said. “It’s because I have a budget where I can live comfortably. I can go on vacations, and I can afford my car payment and my house payment.”

Jan Rogers, a 40-year-old special needs specialist from Helena, Arkansas, graduated from the UofA in 2001 and is still feeling the repercussions from her decision to take out student loans in college.

“I only pay $165 a month, which isn’t a lot, but if I applied that to my house payment every month, our house would be paid off by now,” Rogers said.

She said she thinks her social work degree was worth the money, but that it is disheartening when she sees her friends and coworkers who did not attend college making the same amount as her without student loan payments each month.

Joel Doelger 64, a counselor at Credit Counseling of Arkansas in Fayetteville, said that people come to credit counseling for student loan and other debts for a multitude of reasons.

“They’re just stuck,” Doelger said. “They’re either spinning their wheels or they have their heads stuck in the sand because they just don’t know where to go.”

Doelger said that many people feel this way and are not adequately prepared for the real cost of college.