For students entering college during the recession, the question is not so much “Can I go to college?” but, “Can I afford it?” With banks shutting doors on families because of tighter lending restrictions and requirements, students are now struggling to afford a secondary education.
While some students luck out by finding loans through banks, state grants and scholarships, some may inevitably have to face a heartbreaking reality: dropping out of college.
A student’s experience with the recession
When junior Shane Sletten came to St. Thomas, he never thought that he would be thrown into the financial whirlwind that has been his life since early last spring.
Sletten’s father, a construction worker, was laid off about a year-and-half ago because of the recession. As a result, Sletten had to find a way to pay tuition while dealing with parental unemployment on his financial status.
“He’s 48 now and in the construction world your work expectancy is really until you’re about 50 and then they can just hire some new guy to do the exact same work,” Sletten said. “He has no other training besides construction, so he’s like, ‘What do I do, work at Wal-Mart?,’ which is a sad fact that I think a lot of Americans are facing.”
Starting in February, Sletten began his battle with different banks to secure a loan that would, in the end, keep him at St. Thomas. As several months went by and rejections from banks piled up, it seemed that there was little hope.
“They didn’t accept [my dad] because he didn’t have income,” Sletten said. “He had unemployment, but it wasn’t stable. The bank is looking for an income that they can trust and know that you’re going to be making it.”
Sletten’s father lost both his job and health insurance, which eliminated Sletten’s insurance, too. During the summer months, Sletten had no insurance and had to seek emergency medical care that ended up costing $5,000.
As the summer was coming to a close, Sletten was able to secure a loan through Wells Fargo. But he also had to pay off an outstanding $8,000 from the spring semester, which came out of his father’s savings.
Just before the loan was cleared, Sletten was at his lowest, most panicked point when he thought he might not be able to come back to St. Thomas.
“There was one day that I thought I would have to quit school and that was horrible feeling,” Sletten said. “It’s like getting held back in elementary school. It’s just tragic; just to be behind on credits and then graduate not with my class and my friends.”
Because St. Thomas requires that all students have health insurance, Sletten joined the 900 students who have opted for the $429 health insurance this year through St. Thomas.
St. Thomas by the numbers: debt, financial aid and retention
A survey conducted by U.S. News & World Report magazine on debt load of the class of 2008 reported that St. Thomas ranked No. 8 nationally with an average debt of $34,869 among the 68 percent of graduates who incurred debt. St. Thomas was ranked No.11 last year and No. 12 two years ago.
“We have seen an increase number of students filling out the free application fee for Federal Student Aid,” said Kris Roach, director of admissions and financial aid. “We have also seen an increase in the number of students requesting special circumstance consideration.”
“Special circumstance” consideration includes situations such as layoffs, foreclosures, struggling small business owners or anticipated medical expenses.
“The truth is that during the cycle of a whole year things can change and that’s when, even during the course of a year, they should come to us and bring to our attention circumstances that are changing,” Roach said. “We need to see the actual documentation, then we can recalculate it even midyear. In some instances, we are able to come up with additional aid midyear.”
A bulletin from the St. Thomas news service reported a 72 percent graduation rate, up from 71 percent the previous year.
The retention rate, the number of returning students from one year to the next, has shown consistent numbers from fall 2004 to fall 2009. But there was a slight dip from 2007-2008 that could be as a result of the recession. But while the rate dipped from 87.7 percent in 2007 to 85.5 percent in 2008, it climbed back up to 88 percent this year.
Roach said the financial aid office strives to keep students at St. Thomas.
“We are really taking things one year at a time and hoping to be able to help people see their way through a year and return and find their way to graduation,” she said.
President Obama and Sen. Franken seek aid for college students
On Sept. 17, the U.S. House of Representatives voted in favor of the biggest overhaul of college aid programs since the 1960s, which was included in Pres. Obama’s campaign promises.
The bill, approved 253-171, will end subsidies for private lenders, boost Pell Grant for needy students and pay for community college reforms and more.
If passed by the Senate, the bill would save taxpayers an estimated $87 billion, according to the Congressional Budget Office. The bill would increase Pell Grants for needy students from $1,400 to $6,900 over the next decade.
On Sept. 12, Sen. Al Franken spoke at the University of Minnesota to discuss abolishing the Federal Family Education Loan in favor of direct loaning.
“Direct lending slashes administrative costs by cutting out the middleman and lending directly to the student,” Franken said.
In his campaign, Franken proposed a tax cut that would help Minnesotans seeking a college education. He said it would cost taxpayers $48 billion over five years and would cover up to $5,000 for five years to a student in a family earning up to $200,000 per year.
Searching for further aid?
Students looking for additional aid should watch for the monthly newsletter ScholarTips sent out by the financial aid office. It gives lists of various scholarships from outside donors that include general and major-specific scholarships.
“Last year, our students brought in over $1.8 million in what we call ‘outside scholarships,’” Roach said.
Sletten aims to combat his financial woes by looking across the Pacific for international studies in Japan, where his loan will be enough for five classes and room and board. At St. Thomas, the same loan would have barely gotten him through only two classes.
Sletten is also working three jobs. He works on-campus in the cafeteria and with Journalism ThreeSixty, a program that works with high school students interested in journalism. He also has an outside job working security at the Metrodome during Vikings games.
Though Sletten was one of the lucky ones who survived his bout with the recession, he realizes that many more are in the same position he was in.
“My advice would just try to stick it through,” he said. “It’s a lot of pressure, especially applying for loans. It’s tough, but you can’t skip out on an education.”
Matt Linden can be reached at email@example.com