Diploma and the debt

A decade of tuition increases has led students into a college-loan crisis

Illustration by Amane Kaneko

When Andrea Hernandez gets her bachelor’s degree from Chico State, she’ll be the first person in her family to graduate from a four-year university. The liberal-studies major—who’s minoring in Spanish and also in Chicano studies—wants to be a teacher, maybe even a school administrator or a superintendent one day.

Her goal is to eventually complete a master’s in education administration and a doctorate in education, but that plan will be a burdensome one. With the costs of tuition and books, and the student loans she’s taken on, Hernandez is facing a crushing level of debt to make her aspirations a reality.

“Our government is making it so much harder for us to accomplish our goals,” said the 21-year-old, who is entering her senior year with $15,000 of student-loan debt.

Hernandez is one of many students facing an expensive collegiate road. Indeed, the term “starving student” has never been more serious as many graduates will spend most of their lives trying to pay off the debt incurred during their college years.

“It’s really shocking to know how much debt students end up with. [Teachers] tell us all the time to go off to college and try to start building up a career, but they never really tell us how much debt we’ll have,” said Hernandez. “Many students can’t find jobs within the first year [after graduation], and it’s really hard to pay off those loans.”

According to a California State University fact sheet, the average loan debt for CSU graduates in 2010-11 was approximately $16,648. In recent months, Congress’ inaction had caused the interest rate on federal Stafford loans to automatically double to 6.8 percent. However, earlier this month President Obama signed a bill that brings the rate down to 3.86, a slight increase from the previous 3.4 percent rate.

If Hernandez continues to borrow as she has thus far, she will be roughly $20,000 in debt when she graduates. If she stays in school for a master’s degree, and then a doctorate, that balance likely will increase by another $20,000 or $30,000, or more. Based on a federal student-loan calculator, when factoring in the interest rate, a $50,000 loan paid over 30 years will cost more than $84,000.

The fact that the federal government is profiting from the burden Hernandez and hundreds of thousands of other students like her will take on post-graduation has not gone unnoticed at the Capitol. Sen. Elizabeth Warren (D-Mass.) berated Congress in a speech on June 6 for making an obscene profit “off the backs of students.” According to the bipartisan Congressional Budget Office, the federal government stands to make $51 billion this fiscal year alone.

This profiteering, as some have described it, is taking place as graduates and the unemployed compete for work in the still-struggling economy. Those who are unable to find jobs immediately after getting their diplomas often have no choice but to defer payment. Students often take out both federally subsidized and unsubsidized loans, and for the latter, interest accrues during deferment. Over time, with the loans accruing more and more interest, the minimum payment may rise to near-insurmountable heights, especially when a low-paying job may be the only employment available.

Chico State senior Andrea Hernandez has become an activist for student rights during her years as a college student. As she nears graduation, she’s increasingly worried about how she’ll pay off her student-loan debt.

PHOTO Courtesy of andrea hernandez

Hernandez receives the Cal Grant and some financial assistance from her parents with rent and groceries, has a part-time babysitting gig, and does work-study on campus. Still, she is forced to rely on these sizeable loans.

She is not the only member of her family who has struggled with the costs of higher education. Her sister, Arianna, recently dropped out of San Jose State, electing to pursue an emergency medical technician certificate at Santa Barbara City College instead of completing a bachelor’s in kinesiology. She’ll save money by living at her parents’ home in Oxnard. The hope is that the EMT certificate will be a cheaper and faster route to a sustainable career.

Hernandez is concerned about paying off her loans, and also about providing for her parents as they get older. She knows the teaching-credential program will cost money as well, and it will be some time before she’s done with school and able to find a job.

Even then, she noted, “teachers don’t make a lot of money.”

She said government officials often refer to students as “the future,” but they aren’t really working to facilitate that future. Hernandez has become passionate about working to better higher education. She began protesting in 2011, at a demonstration organized by the campus chapter of MEChA (Movimiento Estudiantil Chicano de Aztlán).

Hernandez was one of around 70 students who stood in the March rain in front of the Student Services Center to protest funding cuts, tuition hikes and administrative raises. Since then, she has been part of a number of demonstrations, including a California Faculty Association-organized march in April of 2011, lamenting the perceived death of quality education.

“I see so much potential [for] creating one of the best education systems, but unfortunately we can’t, because the government cuts our budgets first, and it is very upsetting,” she said.

Those cuts have resulted in drastic increases in the amount of fees California’s public universities charge attendees. Tuition at the CSU has risen by about 145 percent since 2004 due to declining support from the state. In the last four years alone, full-time undergraduate tuition rose by more than $2,000 annually at the CSU, from $3,048 in 2008-09 to $5,472 in 2012-13.

In recent years, even the middle class have found it difficult to pay for college. This past June, state lawmakers passed the Middle Class Scholarship Act, which will reduce fees for students from middle-income families.

This law defines “the middle class” as those earning between $100,000 and $150,000 per year. Previously, students from such families would not have received any financial aid because of their parents’ income, even if said income might not be sufficient to cover college fees. Students from middle-income families often would have to wait until turning 24—the age one is considered independent and thus able to receive financial aid—regardless of how long they had lived on their own and paid taxes.

Sen. Marty Block (D-San Diego) visited Chico State last year to lobby for a bill to help reduce tuition for the middle class.

file PHOTO by melissa daugherty

Under the new law, students whose parents make less than $100,000 will receive a 40 percent break on tuition costs at the University of California and CSU campuses, while those whose families make between $100,000 and $150,000 per year will see a 10 percent reduction, according to the California State Assembly Democratic Caucus website.

General Fund revenues from Proposition 39—which voters approved in 2012 to close a tax loophole that only benefited out-of-state corporations—will pay for the Middle Class Scholarship.

But the law doesn’t go into effect until fall 2014.

State Sen. Marty Block (D-San Diego), a former assemblyman and professor for more than 20 years at San Diego State University, visited the Chico State campus last year to champion the law. While low-income students are eligible for financial aid, and students from wealthy families can afford the current cost of tuition, students from middle-income families bear a huge financial burden, Block pointed out during a rally.

“If you’re not born into wealth and privilege, that doesn’t mean you don’t deserve an affordable higher education,” he said.

Block referenced the 1960 Master Plan for Higher Education, which set out the goals of increasing the access, affordability and quality of higher education. He’s not the only one who thinks those goals have gone by the wayside over the past 50-plus years.

Chico State associate professor Michael Coyle says the CSU is not living up to the mission set out by the master plan.

“The CSU was created to provide a free university education for all Californians who desired one, and did so for years. This vision is being slaughtered year by year now … by a model of educational thinking that absurdly expects all education to adhere to the logic and behavior of capitalism,” he wrote in an email to CN&R.

Coyle, who teaches political science and is currently on sabbatical, noted that other states, including Texas, help fund higher education through oil- and gas-production taxes. California does not collect a severance fee on oil or gas production, according to the state Department of Conservation. In fact, the state is the only major oil producer in the nation that does not collect such as fee.

If it did, the state could “once again fund university education such that any and every Californian obtains a free education,” Coyle said.

Chico State professor Susan Green has long been an advocate for quality higher education.

Photo By melanie mactavish

Doing so, he continued, would be an obvious benefit to the state.

“Think about all the tax dollars we collect in this state just based on the income of its populace. Considering that a person’s income increases if they obtain a college education, would it not make sense to provide everyone a college education? It would essentially pay for itself and more,” he said.

Past attempts at the state Capitol to put in place such a fee have failed. The latest attempt, Senate Bill 241 by Sen. Noreen Evans (D-Santa Rosa), would allow the Department of Conservation to administer a 9.9 percent severance tax for oil extraction—the majority of the funds being allocated to public higher education.

Such legislation, if passed, will make tuition more affordable and thus reduce students’ reliance on government loans. But politically active students know better than to count on Sacramento for relief.

Of course, there are opportunities for loan forgiveness, depending on what profession students are looking to enter.

Chico State history professor Susan Green offered hope for students who are interested in going into public-service-oriented careers, such as teaching.

In 2007, the College Cost Reduction and Access Act established a new public-service forgiveness program. According to the Federal Student Aid website, the loan-forgiveness program wipes away the debt that remains after working for 10 years in public service, so long as the borrower qualifies by having made 120 monthly payments. There are options for those with part-time jobs in the public sector as well.

The government also allows borrowers experiencing a financial hardship to make income-based repayments.

According to Green, who teaches Chicano studies, education is currently considered by the general population to be a benefit only for the individual, and not for society as a whole. Therefore, the general public doesn’t care about education at the moment. “There’s been a public disinvestment in education,” said Green, who is president of Chico State’s chapter of the California Faculty Association.

She acknowledged that some students may not be able to find a job in their field immediately after graduation, but that doesn’t mean they won’t ever be able to find one. Green thinks that school will help them in the long run, regardless of what they want to do.

Chico State Admissions Director Allan Bee says the university has programs in place that aid students who want to graduate in four years.

Photo By melanie mactavish

“To view education in terms of only a job at the moment assumes that the job market is never going to change. I don’t buy that,” she said.

Green believes that people—including government policy-makers—will eventually realize that college is essential to ensuring a trained and qualified workforce. As she put it, “Do we want qualified nurses in a hospital like Enloe, where anybody can go, or don’t we?”

In California, a four-year degree still promises nearly double the income of workers without one, according to a report by the Public Policy Institute of California.

The PPIC is a nonpartisan think tank dedicated to evaluating current California issues, coming up with real solutions for them, and advising state lawmakers according to its findings. A PPIC report from June 2013 examining the value of higher education in relation to growing student debt found that the state of California has been steadily reducing its financial support for higher education, while enrollment continues to go up.

The report suggests that the state should “find additional ways to make college affordable for greater numbers of Californians.” The document goes on to say that “California’s future prosperity depends on public policies that promote college enrollment and completion for increasing numbers of Californians.”

Another issue at the CSU is that, with enrollment increasing and funding declining, it’s difficult for some students to get all the classes they need to graduate in four years. Consequently, they are spending more time—and racking up more debt—to earn their degrees.

Chico State Admissions Director Allan Bee says that the university is consistently doing everything it can to prevent impaction.

“We are very focused on seeing that students get the classes they need. We have many programs and systems in place to show students from day to day how they can graduate in four years,” Bee said by email. “Sometimes, students make choices—like getting involved in clubs and internships, taking more time to declare a major, or refusing to select classes at alternative times—that can impact their ability to stay on track.

“Certainly, there are ‘bottleneck’ courses that don’t meet the demand. We have invested a lot of resources to identify these courses, expand the numbers offered, and actively advise students not to put them off until the last semester or two.”

Still, some classes remain impacted.

Aubrey Crosby, who is studying history, expects it will take her six years to graduate. She’s had trouble getting all of the classes she needs.

Photo By melanie mactavish

Green will never forget the time a frustrated student—who needed to take her class to graduate—crumpled up his open-enrollment form and threw it in her face after she informed him there was no room.

The longtime Chico State professor noted that she previously provided independent-study options for several students, teaching a few of them at a time, on her own time, so that they could complete the required coursework for a minor in Chicano studies.

The class they needed—Chicano Studies 358—was not offered at the time, though the class is offered this fall.

“Let me just open up this class section that’s not being offered, and I’ll teach it for free,” Green quipped, recalling her frustration.

Aubrey Crosby has had difficulty getting the classes she needs.

The Chico State junior is pursuing a degree in history, and hopes to be a teacher or a museum curator when she graduates. Crosby, who at one point in her academic career had been pursuing a double major (in journalism and history), expects it will take six years to complete her course requirements.

“One of the [general-education] requirements for CSU is Argumentation and Debate; and I’ve tried to get in every semester, and I still can’t get in. I’m a third-year student; it’s going to take six years to graduate, and that’s with AP credits from high school,” Crosby said.

So far, she has taken out about $7,000 in loans, and she estimates that number will climb to $11,000 by the end of this year. Crosby receives financial aid, which covers all but $300 of her tuition per year, and does work-study at the school 20 hours per week.

“My first semester, I had a job 20 hours a week; I worked from midnight to 6 a.m., and I had an 8 a.m. class, and most of the time I ended up skipping that class,” said the 20-year-old.

Crosby has continued working about 20 hours per week, but she says she’s now able to do it without affecting her grades too drastically. Facing a six-year, debt-plagued college career, Crosby said, “I feel like education should be something everyone has access to. The fact that [the federal government] is making money off of people who are in college trying to better themselves … is ridiculous and frustrating.”

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Crosby also feels that the value of her education has been diminished somewhat. “I worked for it, and I paid for it; I feel like [a degree] should be worth more.”

Green agreed to an extent, saying, “I think that quality has gone down, and that’s a hard thing to say. Faculty want to do the best possible job that they can, but we’re being encouraged to offer Scantron [tests] instead of writing, so we can let more students in the class.”

Cindy Renteria is also entering her junior year at Chico State, but she says she’ll probably need a fifth year to graduate, since some of the classes she needs have not been available. She is majoring in communications with a minor in Chicano studies. Through organizations like MEChA and Students for Quality Education (SQE), Renteria has been attempting to get more classes opened up so she can complete her minor.

SQE is a student-run organization, affiliated with California Faculty Association. Both groups are actively involved in lobbying for higher-education rights for students and faculty.

Renteria has not taken out any loans, but she is forced to consider one this year. Since she’s interested in working for a nonprofit when she graduates, paying off loans may be a challenge.

“Every student just feels now like the universities are taking money away from them,” said Renteria, “especially if they’re going to Cal State because they couldn’t afford University [of California]—and now they’re making it so we can’t even afford that.”

Renteria is concerned that her peers aren’t in tune to the political issues surrounding student-loan debt.

“Students are continuing to come in, which is good, but they don’t know what’s going on,” said 20-year-old Renteria. “It would be really good for universities to give out more info on what’s going on.”

She thinks that students would be a powerful voice for change if they knew how government issues directly affect them, particularly as it relates to their ability to pay for school.

Both Renteria and Crosby are passionate about learning, and both plan to finish school, whatever it takes.

Crosby admitted that she had doubts about attending college initially.

“I thought about not going to college for a while, because I thought, there’s no point. My friends and their parents are having a hard time finding a job, so what’s the point? I feel like a degree should be worth more than it is, and the fact that I went through all of this work to get it … I should be more valuable [in the job market].”