Student loan debt necessary for some, but not others
By Haley Ruiz

College students across the country have utilized different resources to pay for their higher education, whether it be loans, scholarships, federal aid, working through school or getting help from family members.

But with many individuals relying on loans to finance their education, the student loan debt crisis is impacting more people every year. Over 44 million borrowers in the U.S. collectively owe about $1.5 trillion, according Federal Reserve data.

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 CNN Money.

The average student in the U.S. in 2016 had $37,172 in student loan debt, according to College Scorecard data. The average for Arkansas in 2016 was $26,800.

“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 Chelsey Burton, 26, a first-grade teacher who is about $40,000 in debt. “I just saw it as a necessary evil.”

Chelsey Burton said she does not regret taking out loans because otherwise, she would not have been able to get a degree.

“For me, it’s invaluable even though I have to make those payments,” Chelsey Burton said. “I feel very called to (teaching).”

Some demographics are more affected by the debt crisis than others though, such as students at historically black universities and women.

Arkansas has four historically black universities: Philander Smith College, University of Arkansas at Pine Bluff, Shorter College and Arkansas Baptist College, according to College Scorecard data. All four institutions have a higher median debt than the national average of $9,185.

Additionally, women have more student debt than men, both nationally and in Arkansas, according to College Scorecard data. Nationally, females averaged $12,000 in student debt in 2016, while men averaged $11,000.

Student loans hinder some individuals from contributing to their savings or retirement, financially helping a friend, obtaining loans to pay for a car or house, pursuing a graduate degree or working in their ideal career field.

Lexie Kerr, 29, 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 undergraduate degree at the University of Arkansas, but she dropped out because she did not know what she wanted her career to be. When Kerr reenrolled, she did not receive much financial aid, she said. For graduate school though, Kerr is getting assistance from the Department of Veterans Affairs because her dad is a veteran, she said.

Kerr said she completed a year of her Master’s in Counseling at the UofA but had to leave because of a family emergency. After she left, she cofounded Courage Therapeutic Riding Center and needed an online degree plan. She could not find an online counseling program she thought was legitimate, so Kerr switched to social work, she said.

Kerr said student loans have prevented her from buying food and diapers for a friend who was struggling.

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

Kerr said she also had trouble paying rent, so she decided to put an RV on the property of Courage Therapeutic Riding Center. Kerr said she needed a cosigner for the RV though, because she had so much debt.

Another example of how Kerr’s credit impacted her is when she needed a loan for a new truck after hers was totaled. Kerr could not obtain a loan for one, so she bought one from her dad, she said.

Kerr 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.

Another college graduate dealt with a situation similar to Kerr’s.

Sean Hill, 27, is about $52,000 in debt. He 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 said his debt-to-income ratio has caused issues with obtaining a loan to purchase a house. He had to have a cosigner, he said. Hill said he also needed a cosigner for a new car after his was totaled.

“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 has a Bachelor’s Degree in Animal Science, but he is a closing agent at Lenders Title Company 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 his student loan debt impacted his career choice. 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.

Chelsey Burton said when she was younger, she too was denied a bank loan for a car. A friend’s parent loaned her money. Also, Chelsey Burton attended the University of Central Arkansas for two years, but she dropped out because she could not afford it, she said.

Chelsey Burton said she did not save money for school during her years off because saving that amount of money seemed insurmountable to her.

“Paying for tuition is several thousand dollars and I had bills to pay,” Chelsey Burton said. “I was sustaining my regular life, like making car payments and rent. I just knew that when the time came I would have to go back to taking out loans in order to finish.”

Chelsey Burton finished her degree at the UofA. She said she transferred schools because she had friends in the area.

Chelsey Burton worked through college until she got married, but now that she is married (to someone without student loan debt), she encounters different challenges, she said. There is not as much money to put toward savings or a college fund for our child, which is the irony of the whole situation. Chelsey 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,” Chelsey Burton said. “I would say the biggest part of our life that’s been affected is the day to day stuff.”

Others have benefitted from their lack of student loan debt in that they were able to start businesses or pursue their dream job.

Omar Kasim, 24, is the owner and founder of Con Quesos and Juice Palm in Fayetteville. He received a full-ride to the UofA and has $0 in student debt.

Kasim said if he graduated from the university with a lot of debt, then he probably would not have started his businesses.

“If I had debt I needed to take care of,” Kasim said, “a smarter choice would’ve been to go work for someone or another company and try to reduce that as much as possible, if not eliminate it altogether.”

Ryan Burton, 29, is the owner and founder of Burton’s Creamery. He is married to Chelsey Burton. He paid for college through scholarships, working during the summers, and he received financial help from his parents. Ryan Burton has $0 in student debt.

Before going into the ice cream business, Ryan Burton was in a band, he said.

“Initially, moving to Nashville to do music was a very ‘I have no idea what’s going to happen type thing,’” Ryan Burton said, “so if I had a lot of debt, that’s probably not a path I would have pursued. I probably would’ve done something that could immediately start bringing in an income.”

Ewald Visser, 25, is an employee at Readerlink, the main book distributor to Target, Walmart and other large non trade outlets. He paid for college through working, scholarships and receiving financial assistance from his family. Visser has $0 in student debt.

Visser said he has friends who are still repaying their loans.

“I can see that it’s something that weighs on them,” Visser said.

Some individuals had similar ideas as to why so many students graduate with debt.

Kasim said it is hard for students to see how much debt they are accumulating because they do not have to start repaying it until after graduation.

“All throughout school, you should work on paying that loan down so you don’t have this big hurdle that you just can’t overcome,” Kasim said. “If you have to pay for everything along the way, you wonder about how bad you want a college education.”

Chelsey Burton said some students do not understand how much their education costs if their parents are paying for it and may mess around in school because of it.

Kasim and Chelsey Burton said not everyone needs to go to college because society needs people with vocational and trade skills, like welding and dentistry. They also said the system is overpriced and that many students do not comprehend the loan process. They said there should be a better way of educating high schoolers about higher education without pushing them to go to college.

Some borrowers have 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.”

Kerr said she realizes her job choice is impacting her lifestyle and ability to pay back her loans.

“I’m in a job that I’m choosing that’s making less money than if I went out and got a corporate job,” Kerr said. “This is what I’m supposed to do. I’ve never once thought I need to go get a job in corporate or in a bigger industry or in an office or something. I know we’re just going to keep growing, so I’m not going anywhere, student loans or not. I’m not ready to give up.”

Sources:

Omar Kasim – founder/owner of Con Quesos and Juice Palm
Email: omar@kasimventures.com
Instagram: @misterkasim (how we scheduled interview)

Lexie Kerr – cofounder and operations director of Courage Therapeutic Riding Center
Phone: 479-883-9468

Ewald Visser – employee at Readerlink
Phone: 479-685-8897

Ryan Burton – owner/founder of Burton’s Creamery
Email: burtonscreamery@gmail.com

Chelsey Burton – first grade teacher at Owl Creek School
Phone: 903-278-9055

Sean Hill – closing agent at Lenders Title Company
Phone: 479-790-6304