BLOOMINGTON — Sylvia Zukowski only works two jobs now, down from the four she had when she returned to college for a second undergraduate degree.

After her first time through Illinois Wesleyan University, the 28-year-old turned her business degree into a consultant’s job in Chicago. But the career didn’t work out, and she returned to IWU to study social studies so she can teach history.

Zukowski, the daughter of Polish immigrants from Carpentersville, is a first-generation college student who has taken out $90,000 in student loans despite cashing in her 401(k) to keep the amount manageable. Repayment will start mere weeks after she graduates this year, even though she doesn’t have a job lined up.

The average American who carries college debt is trudging forward under about $24,000 of it, an American Student Assistance study said as of the first quarter of 2012. While the majority of borrowers are under 30, a significant chunk of the estimated $1 trillion in nationwide student debt is borne by older students. Some 2.2 million loans are held by those over age 60, according to the Federal Reserve Bank of New York.

Student debt now lurks on the horizon for students of all ages, and it’s a challenge for older or returning students who either need a loan or want to pay them. For Zukowski, approval for her newer loans was harder to come by because of how much she’d borrowed and her previous education.

“I don’t necessarily have any more anxiety over (loans), but I definitely did throughout this process,” Zukowski said. “Getting student loans is sometimes a lot more difficult than people think once you’re a returning student.”

For Zukowski, one principle above all others guided her borrowing: Don’t do it unless absolutely necessary. Cashing out her retirement contributions was better than taking out a loan, she said.

Sallie Mae is one of the country’s largest suppliers of student loans, and its loan default rate – about 3.2 percent in September – has been falling, spokeswoman Nikki Lavoie.

The company tries to work with borrowers to preserve their credit standing and avoid default, and supports reform efforts that would allow student loans to be discharged in bankruptcy – and option banned since 1976.

Vicki Sangster, 51, of Decatur, hopes a new career in health information technology will bring steady income to avoid default on the loans she owes. Jobs like managing data and finance for medical institutions are likely to be plentiful and stable, she said

One of eight siblings, she helped her only daughter through school and worked a variety of jobs, including a current part-time gig at UPS, before starting classes at Richland Community College in Decatur.

“I want to get those loans paid back as soon as possible, but I wouldn’t say it’s worrisome for me, because I’m the type of person who, if I need to pay something, I go get another job,” said Sangster, who didn’t provide the specific amount of money she owes. “I don’t like owing people or being behind. I do what I need to do to make it work.”

As of 2010, the default rate at Richland was 13.9 percent, down from 17.2 percent the previous year. It’s never gone higher than 18 percent.

Donna Curtis of Decatur also is at Richland, with a goal of becoming a registered nurse at age 50. It’s a big change from a previous career at GTE in Bloomington, where she presided over the closure of two offices before she was laid off herself in 1992.

She stayed home to raise her kids, eventually remarrying Larry, who returned to school himself in 1978 after retiring from the U.S. Navy.

“I said, ‘I don’t want to work at Target the rest of my life,’ and he said if something happened to him that he wanted me to have something to rely on,” she said. She’s taken out $7,000 student loans to help pay down her tuition costs of about $30,000.

Curtis said the traditional model of employment – go to school, get a lifetime career in one place, and then retire – has been changed by the behavior of companies and the economy. The scarce number of high-paying jobs in Decatur makes it likely she’ll move after she completes her education, she said.

“Nobody stays in the same place anymore,” Curtis said. “Here in Decatur, you work in a factory or you get minimum wage jobs. People can’t afford to support their family on minimum wage jobs.”

Larry moved back to Decatur after Hurricane Katrina wiped out his home and his livelihood in Louisiana. He’d become a registered nurse himself after he left the Navy, paying $300 per semester tuition at Arkansas State University and learning from instructors who were mostly younger than he was.

His retirement benefits will mean his wife can afford to repay large amounts quickly, he said, but that isn’t an option for everybody.

In fact, he said there are few practical options for those who can’t find a job or can’t make enough money to repay the loans. “The only way you can get out of (them) is to die,” Curtis said.

Richland advises its students through the loan process, said spokeswoman Lisa Gregory.

“While we continually strive to appropriately advise students about the loan repayment obligations through the financial aid and degree completion process, it is the unfortunate reality that sometimes students are not successful,” Gregory said. “For those many students who are successful in the completion process, the area economy may not have job opportunities available to them. At times, default is a result.”


FYI

In addition to your school’s financial aid office, information about or relief from student debt is available at:

-- Project on Student Debt (loan limits): http://projectonstudentdebt.org/files/pub/2012-13_loan_terms.pdf

-- National Consumer Law Center: www.studentloanborrowerassistance.org/

-- U.S. Department of Education (loans and Pell grants): http://www2.ed.gov/fund/grants-college.html

-- American Student Assistance (nonprofit): http://www.asa.org/basics/default.aspx

-- Consumer Financial Protection Bureau: http://www.consumerfinance.gov/students/repay/

-- National Student Loan Database System: http://www.nslds.ed.gov/nslds_SA/


 Default rates

Following are the student loan default rates for loans that came due between Oct. 1, 2008, and Sept. 30, 2009, and went into default before Sept. 30, 2011:

University of Illinois-Urbana 2.5%

Illinois Wesleyan University 2.5%

Bradley University 2.8%

Illinois State University 3%

University of Illinois-Chicago 4.2%

Eastern Illinois University 4.8%

Southern Illinois – Edwardsville 6.6%

Northern Illinois University 7.4%

Southern Illinois-Carbondale 8.1%

University of Illinois-Springfield 8.5%

Western Illinois University 10.7%

Illinois Valley Community College 13.2%

Chicago State University 15.2%

Heartland Community College 16.6%

Parkland College 18.1%

Illinois Central College 24.7%

SOURCE: U.S. Department of Education

 

 

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(27) comments

outoftowner
outoftowner

I believe it would be a mistake to allow student loans to be discharged through bankruptcy. Lets face it, you can't repossess an education. If student loans are allowed to be discharged through bankruptcy, that will only make the loans more risky and likely make it harder for students to get the loans and result in fewer student loans being issued. I don't believe the lenders are going to assume the greater risk involved if the loans can be discharged through bankruptcy.

justnotrite
justnotrite

Why on earth would someone with existing student loans go to an expensive school like IWU? It would have been a wiser choice to go to a state public univ. that has lower costs. Even for the first degree!!

Chadwick Snow
Chadwick Snow

My thoughts exactly. There are less expensive yet comparable educational experiences elsewhere. Some of this financial burden is by choice and not circumstances. It would be more interesting if the article had focused on someone attending Eastern, Western or ISU where student loan debt had become a burden following graduation.

Indycars
Indycars

Thoughts of an ICC Graduate/ISU Graduate who paid his own tuition/expenses while turning wrenches to get through Undergraduate School with $500 in debt borrowed at a local bank: I would have agreed with your position until I noted the "less expensive schools" identified have higher default rates than IWU and Bradley, the two schools with the highest historical tuition rates in Central Illinois. The best value educators, the Community Colleges, Heartland and ICC are among the worst defaulters. Perhaps, in Colleges as elsewhere, students get what they pay for. Or, perhaps these the higher priced schools generally get better students who have economic success after school is out.

BC
BC

Student loans are a no risk for lenders, the government backs them. The lender collects the interest, but is guaranteed the base funds. If the student is in default eventually they will take their tax refunds for repayment. Student loan debt is nothing new ask most doctors how long it took to pay off their student loans.

chicago1963
chicago1963

$90,000 in student loans to get a bachelors degree in business?? Now racking up more loans to be a history teacher?? Obviously didn't learn anything about business when she was in school. And no, this is not typical of most students. A small minority get that far in debt mainly by using their student loans for other things, like paying for a car or paying credit cards. My guess is she will be a chronic bankruptcy declarer.

MidWestMike
MidWestMike

Discharging student loans through bankruptcy - what kind of idiocy is this? Surely this must be a Socialist sponsored idea since the lack of personal accountability is first and foremost on their minds; goes to their core believe that "someone else" should pay for me.

Indycars
Indycars

Kids who borrow more than they can afford to pay back with hopes of bettering themselves should carry the burden of college debt the rest of their lives. Financial institutions and insurance companies on the other hand should have the opportunity for do overs with public funds.

Walter
Walter

Why is there no truth in lending for college loans? How about each University explain the realized opportunities and average income expectation of their graduates in each and every ciriculum. Universities are remarkably irresponsible in the selling of education, and they do not explain to the student that the degree is not a ticket to success, rather hard work is the ticket to success. If manufacturers make a product that doesn't work, class action, if Doctors don't deliver, malpractice, if retailers lie, small claims, but schools can take $100,000 from someone and give them absolutely nothing of marketable value and they have no expectation to deliver a value. It is a crime on America of major proportions that universities take so much money and time from our youth and deliver so little..

ct
ct

because for those not thinking straight at 18 yrs old, any document or discussion will be ignored....

Interested
Interested

There is a thing called the library and another called the Internet where people can research job opportunities and income for various majors/fields of study. If someone goes after a degree with no demand in the job market it is not the fault of the school offering it.

observer123
observer123

That's not the point. Sure people can research it but some of these schools are extremely off base when they tell students about their job prospects. They say things like "90% of our graduates have jobs after they graduate from our school" but 50% of those kids are working at daycares, restaurants, or other dead end jobs.

Walter
Walter

That is not the point, some schools do have success in students finding jobs and some do not, even in this job environment. Schools and society are telling high school students to get a college degree and it is sure fire success, so borrow the easy money, have a good time. Well it isn't a surfire thing. You are suggesting a person who can't figure out a $90,000 debt going into a starter job should have gone to the library and find out college graduates can't get a $100,000 job. It is the Universities that are assisting these kids in getting these loans, so they should assist them in telling them there is no job in their cirriculum or the jobs start at $35,000. Remember the days when kids 'worked' their way through school, and then were oddly competent to start a job at graduation. Most graduates aren't prepared for the job market.

annieoakley
annieoakley

Since the government guarantees these loans, who eventually pays for them if they go in default? And can we really blame the student when our corporations keep leaving to feed a 3rd world country under the guise of free trade?

I was always under the impression that the best way to go to take care of yourself and family is to get a college education. With all this debt, and very few perspective employment opportunities I am beginning to wonder. Without the education we are screwed but with it, a lot of graduates i know aren't even working in the field they went to school for.

The banks have these students by the gonads. Either way you look at it, the tax payers end up paying a portion of these loans off.

mats
mats

College is a pathetic joke in this country anymore. It IS. A business. Bottom line. And a terrible one..
It is an industry, a complete charade and a colossal waste of money.
If we cared about education, really truly cared, then we would have a much better system that wasn't based on profit!
And congress should be ashamed for perpetuating the lie. And yes they should bail out the many who were duped by the system with unethical loans for unnecessary "education".
http://speedyloansearch.com/

chicago1963
chicago1963

spoken like a true fast food worker.

ct
ct

We need to start targeting student loans to worthwhile careers.

Offering far less money to those going into worthless tracts like The Italian Renaissance.

And then offering much higher borrowing rates and stricter loan terms to schools with high default rates to force those schools to offer better programs or have students go elsewhere. Force the schools to compete on education rather than creating fun times for students with fitness centers and plush dorms and billiards classes.

We do the same thing when lending for other goods...

moderndaycowboy
moderndaycowboy

Yes, because that's an extremely intelligent thing to do. Perhaps you should read this:
http://schoolsofthought.blogs.cnn.com/2013/01/04/my-view-what-will-you-do-with-an-english-degree-plenty/?hpt=hp_c3

Interested
Interested

Sorry, your reference is put together by the director of the Humanities school at a university. Do you really think he would give an honest appraisal of the marketability of the degrees produced by his peers? Working in the business world, I can tell you few people get jobs here with these types of majors.

moderndaycowboy
moderndaycowboy

Interesting. I work in student services, and have for over 13 years. I've heard countless fortune 500 recruiters say the exact opposite of what you are saying: the business world loves liberal arts majors. What they tell me supports exactly what the author siad. Working in the business world in B/N isn't exactly what I would call reflective of the actual business world.

WalterK
WalterK

FYI, this is what politicians are talking about when they say "affordable higher education for everyone". They don't mean that schools would make themselves affordable in reality. They mean that the criteria for accessing student loans will be easier and the interest rates will be low (1-2% I think).

Eventually this "credit addiction" will stop because there will be nothing really to loan (granted with FIAT system we are just trading paper and not gold, but I digress...).

As for the real world value of a college degree, I would say that I can easily identify those that have gone to college and those that haven't. If you don't get anything out of your college education, you are indeed wasting your time and not taking advantage of the wealth of knowledge made available to you. Granted, "tenorship" is a terrible idea because we should not allow our professors to stop competing and gaining knowledge themselves.

Anyway, our politicians keep solving problems by just borrowing more money or just printing from from recycled paper. Not a sustainable solution.

Responsibleone
Responsibleone

The Liberalization of America continues.....spend with abandon and few consequences if the student does not pay it back......

electedface
electedface

Student debt is stunting the growth of the economy. Student loans have increased by 275% over past decade. As the next generation graduates from college, they are plagued by insurmountable debt that places demands on their income, limiting their ability to spend their earnings in ways that stimulate the economy.

http://www.youtube.com/watch?v=mRA9ndc1pCM

One Who Knows
One Who Knows

Sylvia should have taken a class in personal economics.

over50
over50

Get a job with a senator or representative then you don't have to pay the loan off. It is forgiven.

observer123
observer123

Student loan debt is a serious problem in this country and is severely hurting the younger generations but this girl deserves no sympathy. You go to college once, ring up a ton of debt, get a job, then decide you want to go back to IWU to get a teaching degree in a field that will be damn near impossible to find a job in. History teachers are a dime a dozen and to chose IWU again when you could go to ISU for a fraction of the price is ignorant.

New Nana
New Nana

Student loans CANNOT be discharged in bankruptcy and I agree should never be an option. There are many many school choices and to choose a college you cannot afford is just ridiculous. Also there are LOTS of grants out there that nobody ever takes the time to apply for. Young people now have NO CLUE what it's like in the "Real World" of paying bills, etc. This young woman chose a school she couldn't afford to begin with. There are many people who pay on student loans for a very long time...it's a bill...all a part of "life",

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