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For Disadvantaged Students, College Debt Leaves No Margin for Error

Instead of lifting students up into lucrative careers, higher education—and its high costs—can be an anchor for many of them.

April 29, 2022
A photo of Serena Puang smiling in a field of sunflowers.

Serena Puang

A photo of Serena Puang smiling in a field of sunflowers.

Serena Puang

From the age of 15, Dannielle Summerlin knew she wanted to be a therapist, so she majored in psychology. She borrowed between $15,000 and $20,000 each year to cover her tuition, first at Berry College in Georgia and then at nearby Shorter University, where she transferred halfway through her degree.

When she signed a promissory note each year to take on more debt, she was always struck by the size of the loans. “That’s so much money,” she would think out loud. “I hope I can pay it back one day.” 

Anytime she expressed hesitation about taking out loans, she said, everyone from her financial aid counselor to her mother was quick to reassure her. Psychology is such a versatile degree, they would tell her, and once you graduate, you’re going to be making good money, and you can pay it back within years. 

She believed them. 

Many students take on debt based on the belief that hard work and a college degree will help them earn financial stability and enough money to pay off the loans, said Mark Huelsman, director of policy and advocacy at The Hope Center for College, Community and Justice at Temple University. He has been researching the causes and consequences of student debt and its impact on racial inequity for about a decade. Around 39% of all undergraduates took out student loans in 2017-18, according to a report the U.S. Education Department released last year. About 41% of graduate students took out loans. As of December, about 43.4 million Americans owed $1.6 trillion in federal student loan debt, according to the Education Department.

Whether or not to take out loans is just one of the daunting decisions students face. And other decisions—such as if or where to go to college, what kind of loans to take on, and what academic major to pursue—all have financial implications. Students, especially those who are first generation undergrads or from low-income or immigrant families, may lack essential guidance to help them navigate these decisions, which affect their life trajectories in many ways—from career choices to financial stability.

“I’ve been in crisis mode since 2016. I wasn't getting any jobs that were better than like $15 to $17 an hour. Right now, I'm making $17 an hour and still living paycheck to paycheck.”

Dannielle Summerlin

Personal circumstances, inflexible repayment schedules, and social stigma surrounding higher education—the pressure to earn a college degree—leave some students with no margin for error: They need to, or feel that they need to, attain a degree as quickly as possible and then immediately earn enough money to repay the student debt they incurred. But in the end, they often still struggle to repay the loans. 

Disadvantaged students are also navigating a higher education system that is built on rules and assumptions that are highly racialized and don’t reflect reality, Huelsman said. “The assumption is that all college students are certainly well off, and they're from families that can support them,” he said. “We don't recognize in our public policies that life happens to people.” 

Summerlin's post-college reality failed to stack up with what she was told about the ultimate payoff of earning a degree. A bachelor’s degree in psychology wasn’t enough for most jobs in her field. She needed a master’s. Speaking of the advice she’d been given during college, she said, “Now I know it was a giant lie.” 

Upon graduating in 2015, Summerlin worked as a therapist for a drug addiction clinic, assisting 40 patients per week. She was overworked and soon burned out. After working several other jobs, Summerlin knows now that she wants to be a sonographer—a career with a median annual salary of almost $78,000—but because of her debt, she can’t afford to go back to school. She already has a degree, so she doesn’t qualify for grants that would help her pay for another one. 

“I’ve been in crisis mode since 2016,” Summerlin said. “I wasn't getting any jobs that were better than like $15 to $17 an hour. Right now, I'm making $17 an hour and still living paycheck to paycheck.” 

Changing Colleges and Degree Programs Comes at a Cost

Transferring schools, as Summerlin did, as well as changing majors and being unsure about career choice are common. Fewer than half of college students earn a degree within four years, and about a third will have changed their major at least once, according to a 2017 report from the National Center for Education Statistics. When students change majors, they have to take additional classes, which means they often add to their college costs and the amount of time it takes them to earn a degree. 

Most students—70% of undergraduates and 58% of graduate students—receive some financial aid, according to the Education Department. But financial aid may not provide enough help for the students with the most need. Individual financial aid is calculated under the false assumption that parents will offer significant help to pay for school, wrote Sara Goldrick-Rab, founder of the Hope Center for College, Community, and Justice at Temple University, in The Atlantic. Goldrick-Rab is the author of the book “Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream.” She also is a professor of sociology and medicine as well as the president of the Hope Center. 

Instead of getting financial help from their families, some students are actually sending money home. Goldrick-Rab’s research team found that 11% of financial aid students said they sent at least $50 per month to help their families, and 14% spend more than 10 hours per week caring for older family members or younger siblings. About 22% of U.S. undergraduate students—roughly 4 million people—are in school and raising children, according to a 2021 report from the Institute for Women’s Policy Research.

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After a semester of art school, community college classes, and then delaying her education to care for her sick mother, Christine Athens worked and used credit cards to pay for living expenses when she returned to school. She was 27 when she enrolled at the University of Miami, which was her third college experience. She ultimately graduated from the private college with $100,000 in student debt. 

She had originally planned on joining the Peace Corps upon graduating in 2017, but instead, Athens kept her bartending job to make ends meet as she considered her next steps.

“It’s more about survival,” Athens explained. “When my student payments rolled around, they wanted around $850 a month, which was fine at first, but it was beginning to tap into my savings a little bit. So I had to take on extra shifts.” 

Athens eventually transitioned into copywriting, but during the pandemic, she fell behind on her student loan payments. 

“I had to choose between eating and paying rent sometimes,” Athens said. After several calls to her loan servicer, she got her payment lowered, but it was still more than she could afford. At one point, Athens missed three months of payments. Then, she said, her loan servicer called or emailed her, her parents, and even her sister multiple times a day—actions that she said negatively affected her mental health.

Athens said she is caught up on payments now and has even paid off about half of her loan. But the impact of this experience still follows her. She said her credit score was ruined, and it’s making it difficult for her to find a new place to live. 

“It wasn't that long ago that debt-free higher education was the norm.”

Mark Huelsman

Director of Policy and Advocacy, The Hope Center for College, Community and Justice at Temple University

Beyond the economic impact of debt, like what Athens is facing, students also face social pressures to be on the same career paths as their peers. Moe Angulo graduated in 2021 from Embry-Riddle Aeronautical University in Prescott, Arizona, with a degree in aeronautics and hopes of working as a commercial airline pilot. He was concurrently completing flight training and his bachelor's degree, but in his junior year, the training became too expensive—between $45,000 and $50,000 total. Many of his classmates built up their flight experience for additional certification by becoming paid flight instructors after graduating. But because of the training costs, Angulo took a customer service job at GymShark, a fitness apparel company, after graduating. He has since moved on to work as a flight coordinator for a private jet charter company.

“I literally avoided talking to most people that I graduated with,” Angulo said. He said he was one of a small number of first generation, low-income students at his college. About 23% of those enrolled at the school receive federal Pell Grants intended for low-income students.

Former classmates and mentors didn’t really understand why he wasn’t flying anymore. Becoming a commercial airline pilot requires multiple certificates. To attain the required training for certification, Angulo said he would need about $18,000—and he’s already $230,000 in debt. “It's just something that I don't have saved up,” he said. “Quite honestly, it's almost hard to even save up with my own living expenses.”

Mounting Student Debt with No Degree 

Some students decide to leave college when the costs get too high. Chandler Hoffert, 23, completed one year at the University of Cincinnati College-Conservatory of Music, transferred to Johnson University, and then transferred back into CCM’s music production program. On top of tuition and living expenses, he also had to pay for books, software, and instruments. He figured the expenses were worth it because he was building a network at CCM and he was counting on music production turning into a lucrative career. Within three weeks of transferring back to CCM, he got an unexpected job offer and decided it made more financial sense to take it than finish his degree. 

In creative degrees like music, graduating with debt means “diving into a starving artist kind of world,” Hoffert said.

“You're grinding to afford to live and feed yourself,” he said. “To add on crippling college debt as a starving artist is not something that I wanted ever.”

Hoffert said he is glad he went to college. He made important connections and believes he wouldn’t have his current job without it. He also has around $12,000 in debt, which he said is much less than his college peers owe. And although he lacks a bachelor’s degree, he is working in the creative fields he studied.

Many students who don’t finish their degrees are not so lucky. They may have less debt when they leave, but they are less likely to pay off what they owe. They often see the balances increase over time instead of decrease, according to The Institute for College Access and Success. “Borrowers who complete their programs typically pay down 6% of their debt after four years, with those who had attended public and nonprofit colleges seeing double digit decreases in debt,” according to TICAS.

Not completing a degree also puts workers at a disadvantage when it comes to employment rates and lifetime earnings. 

These disadvantages hit Black students particularly hard. They are more likely to have some college education but no degree. The nation’s overall six-year graduation rate was 63% by 2019, according to the Education Department. The rate was 26% at for-profit institutions, which Black students disproportionately attend. And students who attend for-profit colleges, whether they complete programs of study or not, “see the largest growth in their loan balances,” according to TICAS.

“Black borrowers tend to borrow more often and borrow in larger amounts,” said Tisa Silver Canady, founder and director of the Maryland Center for Collegiate Financial Wellness and the author of “Borrowing While Black.” “At the same time, they graduate less often, earn less after graduation and experience more difficulty in repayment.” 

Even when Black students graduate, their debt load may dictate their career options. Black borrowers who graduate may not be able to afford to work in the field they studied due to low wages, Silver Canady said. This may cause shortages in critical jobs like teaching or social work. 

The debt disparities exist for Black students throughout their post-secondary experiences. “You're entering the higher education system at a deficit because you have to borrow more,” said Silver Canady. “And then when you're coming out of the higher education system—if you graduate—you have lowered earnings and an increased level of debt to pay off.” 

The racial disparities in wages and student debt load indicate that college is actually worsening the wealth gap for Black millennials, some say. According to a report from Georgetown University, white people have an outsized share of what are considered “good jobs” and get paid more at them at every level of educational attainment, which also perpetuates a racial wealth gap. 

Organizations such as the NAACP are advocating for student loan cancellation to help alleviate the burden of debt, and some HBCUs and predominantly Black institutions have used pandemic stimulus funds to waive student debt and fees. But those are short-term fixes.

“When people talk about student loan cancellation, they say ‘You need to pay back what you owe,’” Silver Canady said. “What they fail to account for is the fact that some people who are advocating for cancellation have already paid back what they borrowed plus interest and still owe.” 

According to Silver Canady and Huelsman, the Hope Center’s director, solutions have to involve fundamentally rethinking the individualized nature of higher education and debt. Canceling student debt may help those who are struggling now, but to avoid recreating the problem, Huelsman said, the U.S. needs to invest in public higher education, raise wages, and strengthen worker protections. 

“It wasn't that long ago that debt-free higher education was the norm,” said Huelsman. “It would take some investment for us to get back there, but we've done it before.” 

“We asked generations of Americans to trust us when it comes to going to college,” he said. “For too many people, that has been a broken promise.”

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