CMU student debt climbs $10,000 over five years

Students who graduated from Central Michigan University in 2009-10 accumulated an average debt of $26,615 in student loans.

According to the Office of Institutional Research, the average debt has increased by more than $10,000 since 2005 when it was $16,537. For the 2008-09 school year, the average CMU student’s debt was $24,236.

About 70 percent of CMU students borrowed money last year, according to OIR figures.

There are many factors that are responsible for the increasing debt, said Diane Fleming, associate director of Scholarships and Financial Aid. Michigan’s economy is the main reason, because many parents have lost their jobs and have not been saving for their child’s college education, she said.

“Unfortunately, the concept is out there that somehow there will be money for my education,” Fleming said. “But the fact is that there is not enough free money in the country.”

Even when students are approved for a loan, the problems continue, she said.

An expensive problem

The concept the current student generation has is a very expensive one, Fleming said.

“Students are borrowing more than they need,” she said. “They don’t understand the consequences of debt in the future.”

When too much money is taken out from a loan than what is needed to pay for college expenses, the extra money is placed on a refund card and given back to the student. Although the advisers say to put the money back into savings, many students view the card as “free money” and spend it on whatever they please, Fleming said.

“Refunds are supposed to go towards off-campus living expenses,” Fleming said. “Not to pay off credit card bills or to buy high-tech devices.”

Clinton Township freshman Tanika Owens admits she originally encountered that problem.

“Last year when I got my refund money I spent it on an iPod, macbook and other things,” Owens said. “But now I learned my lesson and know that it is important to save it, especially with the added interest.”

Student debt nationwide

Student debt has replaced credit card debt as the highest debt source nationwide.

“What a student does not realize is that once they graduate and after they find a job, what they live on is their salary after loan money,” Fleming said. “If you’re looking at $500 a month, that’s money that could have gone towards a car payment or mortgage.”

Mark Kantrowitz, publisher of FastWeb and FinAid.org, wrote a student aid policy analysis paper on the Notice of Proposed Rulemaking on Program Integrity: Gainful Employment.

He said in the report that key areas of concern are the impact on low income and minority students, especially Pell Grant recipients. The paper also identifies more than a dozen other issues or errors in the NPRM.

Fleming said the Scholarships and Financial Aid office utilizes several practices each year to aid students with the increasing problem.

“We try very hard to let students make decisions about even attending CMU,” Fleming said. “To take out 10,000 dollars freshman year is unrealistic,” Fleming said.

The office gives financial aid presentations to seniors in high school and also meets with students and parents at orientation.

“I realize that if I want go anywhere in life that I have to lose money somewhere in the process and when I get old and rich I’ll just pay it off then,” said Chesaning sophomore Jenna Rickerd.