The Journal Gazette
Sunday, May 24, 2020 1:00 am

Borrowing delays plans

Many don't consider what they owe while in school


Physician assistant Michelle Saylor of Fort Wayne says barely a decision in her life lately hasn't been impacted by student debt.

It colored the timing of her and her husband C.R.'s marriage and their ability to buy a house. Day to day, the couple decide what they can afford based on debt payments of more than $2,000 a month, more than many area residents pay for their mortgage.

The couple's debt includes loans to earn undergraduate degrees and about $45,000 in loans Michelle took out to pay for graduate school.

“I think I didn't totally take into stock how much money I would owe at the time,” she said.

Many college students don't, studies show. And their lives after getting a degree are often financially and personally strained.

According to a Federal Reserve analysis, consumers between the ages of 24 and 32 owed $1.6 trillion in student debt as of 2019, about a half-billion more than all Americans owe on credit cards.

The debt is affecting substantial aspects of their lives – from their ability to buy a house, what they pay for auto insurance, whether they can get credit at reasonable rates or at all and even what kind of jobs they get, the analysis found.

The study found additional factors also at play in decisions on home purchases – increases in the cost and smaller numbers of homes on the market after the Great Recession.

But Tony Didier, a Fort Wayne Realtor, said young homebuyers often have to scale back the price of homes they consider or delay a purchase because of college debt. 

“I have friends who waited to buy a home until their student loans were completely paid off because they had a variable rate and wanted to pay them off as fast as possible. They put one person's income totally toward rent and living expenses and the other's income 100% to student loans,” he said.

One finding from a survey sponsored last year is that many college graduates are living at home with their parents – 14 million of those aged 23 to 27 – because they can't afford to live on their own.

Cameron Cooper, 30, of Fort Wayne graduated from Taylor University in Upland in 2013 but lives with his mother – mostly because he helps her care for her chronic health conditions. Cooper majored in communications and ministry but had trouble finding a job in those fields. Instead, he took a job as a cook at an area high school.

Cooper hasn't always been able to make his monthly loan payments, and still owes $25,000. He said his wages have been garnished and so have his income tax refund checks.

With the onset of the coronavirus pandemic, he was laid off. That means he'll likely fall further behind, he said.

Asked if he would like to get an apartment or buy a house, Cooper said, “Yeah, that would be good. That would be awesome. With my age now, that's becoming a little frustrating.”

Because of the economic fallout caused by the coronavirus, relief is being granted to some borrowers – a suspension of principal and interest through Sept. 30 for federal loans held by the Department of Education and application of any payments after March 13 to principal.

Still, for many borrowers, the need to pay off debt impacts how quickly they can accumulate net worth, a Pew Research Center study found as early as 2014. At age 40, those with debt then had an average net worth of $8,700. Those without were worth an average of $64,700.

And, a report by the policy think tank New America finds high debt load, or defaulting on student debt, can lead to lower credit scores. That can impact the ability to get credit cards, or ones with lower interest rates, and mean higher auto insurance premiums.

The ability to get certain jobs also can be affected, when a prospective employer checks job candidates' credit scores prior to hiring, the report found.

Douglas Hess, director of financial aid at Purdue University Fort Wayne, said debt varies among students who attended public and private colleges. About 66% of public college graduates compared to 75% of private college graduates have loan debt.

Public college graduates in 2017 averaged $26,900 debt, while private graduates averaged $32,600, according to the College Board. A standard repayment period is 10 years, and the clock starts ticking six months after graduation.

Some graduates face more debt because programs of study cost more, Hess said, and some students take longer to complete a degree.

Those who don't complete a degree may end up taking a lower-paying job and still have debt payments. Graduates may feel they must take a job outside the field they thought they'd enjoy to afford debt payments or postpone graduate school.

The impact of financial aid after graduation rarely comes into consideration by students, Hess said. 

Saylor is living with the consequences.

She and C.R. spent 15 months saving for last September's wedding, and she has been doubling up on payments on her loans while saving for a down payment on a house to lighten the couple's debt load that lenders consider. 

Saylor and her husband recently expected to close on a home – it was new construction, but, at two bedrooms and two baths, the home was not as large as they might have liked, she said.

But an employment-related issue arose, and for now, Saylor said, they are staying put.

About this project

The cost of college has continued to increase, taking those who earn a degree years to pay down the debt. The topic has even been a talking point for those campaigning for U.S. president, so The Journal Gazette staff decided to take an in-depth look at the financial realities of higher education with a three-week series of stories on “Diplomas & Debt.”

May 10-11

• Why getting a college degree has become such an expense, including the stories of some graduates with loans to repay.

May 11

• Should parents feel obligated to contribute to their children's college costs, even if it means saving less for their own retirement?

May 17

• Financing a college education and a look at one debt-forgiveness program.

May 18

• A look at proposals politicians and congressional lawmakers have offered to make higher education more economically reasonable.


• The debt repayment requirements for loans taken to finance college can affect the options graduates can consider when it's time to buy a home.

• Some students who bypass college and instead opt for trades training can find fulfilling jobs with decent salaries.

• Tuition assistance programs employers offer are popular.

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