Mortgaging the future

When Patty Lasher walked across the stage at the Show Me Center Saturday afternoon, she should have felt free.

Degree in hand, the 22-year-old Pilot Knob, Mo., native should have been giddily celebrating the end of long-winded lectures, all-night study sessions and the sometimes excruciating final exams.

She should have been turning an optimistic eye to the great unknown of her wide-open future, finally able to put all of her hard work to use in the pursuit of her dream job -- a career in film.

When she finally graduated from Southeast Missouri State University on Saturday, Lasher certainly should have felt free.

But she didn't.

In her words, she felt stuck.

"I can't really go and try and get the job I really want," Lasher said. "That would take time. I've got to go right to work. I have this huge debt trailing after me."

There's the $28,000 in student loans that come due in a year. Plus the credit-card debt, that at one point was more than $5,000. Lasher's written several long-form screenplays. She even got to work as a production assistant on the movie "Killshot" when it was filmed here earlier this year.

But instead of heading out to Hollywood, she's got to be content with finding a job right now. Right here. So she can get started repaying.

"I should be happy," she said. "But I'm not really. I've got to figure out how to pay all this stuff back."

As millions of college graduates begin to enter the workplace, many will face a similar situation -- a major debt crisis they will spend much of their lives paying off.

A recent study shows that 76 percent of college students had credit cards and the average debt is $2,169. In addition, about two-thirds of all students use loans to pay for their higher education, according to the Center for Economic and Policy Research in Washington, D.C.

The average debt for students graduating in 2004, the latest data available, was $15,622 for public schools and $22,581 for private school. That would mean that some college students leave college with more than $25,000 in debt.

Debt is also a reality at Southeast. About 65 percent of undergraduate students who graduated in the fall of 2004 or the spring or summer of 2005 had at least one type of loan during the time they were there, according to Karen Walker, the university's director of financial aid. The average loan indebtedness for the Southeast undergrad is $16,064, she said.

Some local students default on their college loans. Walker said the university's cohort default rate -- the percentage of a school's student borrowers entering repayment during a specific fiscal year who default on those loans during the same or following fiscal year -- is 3.8 percent. The national rate is 4.5 percent.

Credit cards are adding to the problem, too. Many students said they use credit cards to pay for books, supplies and even class fees. Considering that the average interest rate for a standard, variable-rate card is 13.7 percent, according to Bankrate.com, that can compound the situation by late payments.

"A lot of these bills are surprising," said Stephanie Long, a 19-year-old freshman from St. Louis. "Room and board is really expensive, especially meal plans. I just got my first credit card. I plan to pay it off as soon as I have the money."

Debt affects students in numerous ways, according to Michael Devaney, a professor of finance at Southeast Missouri State University. It affects the majors students choose, for one. Debt makes getting a job -- a good job -- quickly very important.

Devaney believes college debt has affected students when they choose majors. It turns people away from the liberal arts, which tend to lead to jobs that pay less than, say, a future in business.

"Primary and secondary education professions are low paid," Devaney said. "If you've got the debt, you've got to pay it off. So students have got to be more conscious of employment. More students are looking for the quick payoff."

So instead of a student choosing something they're most interested in, they may choose something that will make them more money.

But it's the cost of an education, Devaney said, and it's still more profitable to have a college degree than not. College graduates earn more money, are less likely to be injured on the job and more likely to continue to see their salaries increase.

"If you're doing something physical, your salary peaks early," he said. "If you're a college graduate, your salary peaks late."

According to the U.S. Census Bureau, high-school graduates earn an average yearly salary of $27, 975. A college graduate -- with a bachelor's degree -- can expect to earn $51,644, according to the census.

Not that those facts are very consoling to area graduates.

Layne Strattman, 22, of Cape Girardeau, is about $6,000 in debt, after her full-ride scholarship from the board of regents and the state's Bright Flight scholarship for top students.

"It didn't cover everything," she said. "It does cost a lot. Besides, my fiance has debt that's closer to the average. We'll be struggling together."

Strattman, who graduated Saturday with a degree in elementary education, said the debt her new family will face does distract from the graduation celebration.

"It's kind of like hitting a brick wall," she said. "You graduate, and you're very excited. Then, in six months, the real world is thrown at you. Job, debt. It's really growing up immediately. Faster than I wanted to."

smoyers@semissourian.com

335-6611, extension 137

A degree in debt

* As of 2004, 76 percent of college students had credit cards with an average balance of $2,169.

* Two-thirds of all students use loans to pay for their higher education. The average debt for graduating students is $15,622 for public schools and $22,581 for private schools.

* More students are borrowing. In 1993, less than half of all students at four-year colleges had student loans.

* Parents are having to borrow, too. In 2004, the parents of 15.3 percent of graduating seniors took out federal loans -- 12.3 percent at public four-year institutions and 21 percent at private four-year institutions.

* Parents are paying a lot, too. The average debt was $17,709 -- $14,056 at public institutions, $21,984 at private institutions. This data doesn't even include other forms of debt by parents, such as home-equity loans, that parents may take on to help pay for college.

Source: American Institute of CPAs, the Center for Economic and Policy Research, U.S. Census Bureau