KANSAS CITY, Mo. (KRT) – Jennifer Fugett got through the University of Kansas with just $3,500 in student loans.
A paltry amount, compared with the $18,900 the average undergraduate now borrows, according to Nellie Mae Corp., which provides federal and private education loans.
But the 22-year-old will join those repaying big-time loans when she marries in October. Her fiance, Phil Goetz, graduated in May from Washburn University with a law degree and $65,000 in student loans.
They estimate they will pay $375 to $400 a month – for 30 years – starting in November.
“He made me aware of what I was going to get into,” Fugett said, laughing. “I still feel real good about getting married.”
The amount of money students are borrowing to attend college has shot up during the past five years, according to a Nellie Mae survey.
With recent big tuition increases and with Congress talking about boosting loan limits, the amount of student debt is expected to continue to grow.
The average undergraduate debt has increased 66 percent, from $11,400 in 1997 to $18,900 in 2002, the survey found. Students attending graduate school borrowed an extra $31,700, up 51 percent.
Law and medical students drove up the average graduate level of borrowing. Their average accumulated debt was $91,700.
“Education is very expensive,” said Sandy Baum, an economics professor who is co-author of the Nellie Mae survey. “Someone has to pay for it.”
As state governments have cut funding to universities, Baum said, students and their families have picked up more of the cost.
Also, she said, more students are taking advantage of the unsubsidized Stafford loans the federal government introduced in 1992.
Those loans, which accumulate interest while a student is in school, have opened the door for all students, not just those with a financial need, to take out federally guaranteed loans.
Nellie Mae’s random survey drew responses from 1,280 persons who began paying their loans between 1998 and 2001.
Eighty-six percent of the respondents were undergraduates. As in previous Nellie Mae surveys, the vast majority “appreciated the fact that they had the opportunity to go to college and they said the loans made it possible,” said survey co-author and Nellie Mae Vice President Marie O’Malley.
Only about one-third said they felt overburdened by their student loans, O’Malley said.
“So far the economic payoff on the back end is far greater than the $18,000 to $20,000 debt some people are incurring,” O’Malley said.
Kelly Young, 28, of Smithville, Mo., said she was glad she borrowed $14,000 to get a master’s degree in December 2000 from the University of Missouri-Kansas City. The degree in counseling and guidance allowed her to get a job as a career counselor at Rockhurst University, she said.
Young is paying $80 a month. She’s on a plan that calls for the amount to gradually go up.
“I’ve paid on it for two years and it seems like I’ve hardly put a dent in it,” she said.
“But for my husband and myself, it’s fine. We don’t have any problem making those payments.”
In Missouri and Kansas, financial aid directors said students apparently planned to continue their reliance on federal loans.
As of Aug. 15, the University of Kansas had received 16,106 applications for financial aid, up from the 14,990 received on that date the year before, said Brenda Maigaard, KU’s director of financial aid. Students have until Jan. 1 to apply for aid for this academic year.
The University of Missouri-Kansas City already has received 10,923 financial aid applications for this academic year, said Mel Tyler, assistant vice chancellor of student affairs for enrollment management. It received 11,878 for all of last year.
The average undergraduate debt at UMKC after four years of study is $14,642, not far from the national average. Tyler said his staff tries to provide counseling to students about how much they should borrow.
“The key is only borrowing to meet your educational needs, not borrowing money to eat pizza and stuff like that,” Tyler said.
The federal government offers a variety of loans to help students through college.
The most widely used are the subsidized and unsubsidized Stafford loans.
The interest rate is the same on both. It changes annually. On July 1, the rate dipped to 3.42 percent during repayment and 2.82 percent while a student is in school or in a grace period.
With the subsidized version, the federal government pays the interest while the student is in school. To get this loan, a student must demonstrate financial need.
The government limits borrowing on a Stafford loan. For freshmen, the limit is $2,625; sophomores, $3,500; juniors and seniors, $5,500; and graduate students, $8,500 per year.
Most national education associations are asking Congress to increase those limits by about 30 percent. The limits have been the same since 1992.
Congress already has started talking about the limits as part of its work in reauthorizing the Higher Education Act. A decision is not expected until next year.
The United States Student Association opposes an increase in the limits, said Mary Cunningham, its legislative director.
“We are very concerned with the amount of student debt that folks are going into after they graduate,” Cunningham said.
The debt is becoming unmanageable for too many, she said.
Cunningham said her nonprofit wants the government to spend its money on increasing Pell grants, which do not have to be repaid, for those students who have financial need.
The National Association of Student Financial Aid Administrators is among the groups supporting an increase in the loan limits, President Dallas Martin said.”The reality is, given the current economy and circumstances, most families and students will continue to rely on some form of credit to pay college expenses,” Martin said.
It’s better to have them borrow under the more favorable rates and conditions of the federal program than from private banks, he said.
Fugett said she and her future husband appreciated the interest-rate cut that took effect in July. They think their monthly payment would have been about $600 without it.
Although the couple’s student loan debt looks daunting, Fugett said she thought it would be manageable once they both get jobs in their fields. Her degree is in graphic design, and Goetz, a 1993 graduate of Blue Valley High School, wants to practice criminal law.
Fugett said both of them were glad they went to school. She said they looked at their loans as an investment in their future.
“I absolutely believe you need a college degree to get anywhere,” she said.
(c) 2003, The Kansas City Star. Distributed by Knight Ridder/Tribune Information Services.

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