Ferris alumnus Andrew Gallavan said the student loans he took out during his college years are “significantly” higher than his hourly pay.
Gallavan, a graduate of Ferris’ technical and professional communications program, is among many recent college graduates whose starting salaries are less than the amount of student loan debt received over their academic careers.The Detroit Free Press recently reported that student loans now exceed credit card debt with almost $850 billion outstanding. Credit card debt is approximately at $826.5 billion, according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com.
Gallavan currently works in radio part time as a producer/technical grunt. He is also applying for a second job to gain more income in order to pay off his student loans.
Rachel Pieske, a senior in social work, said she has about 16 loans for various amounts of money. Pieske said she has plans to attend graduate school and it will take her “probably around 10 years” to pay off debt accumulated from her student loans. In addition, she said she also hopes to work within a program that will reduce her debt.
“The starting salary for social workers is between $19,000 and $40,000,” said Pieske. “Yeah, I think that my debt will be more than my starting pay.”
Nancy Wencl, Coordinator of Federal Aid Programs, said 8,979 undergraduate students at Ferris have accepted $68,587,713 in federal student loans for the 2010-11 year.
“About half of that is for fall semester,” said Wencl.
Wencl also said parents of undergraduate students are borrowing $10,614,421 in federal student loans for the 2010-11 year. Currently, students rely on Private Education Loans from common lenders such as Discover, CitiBank, Sallie Mae, Chase and Wells Fargo.
Wencl said the best loans are federal student loans, which contain fixed interest rates. The Direct Subsidized Loan is currently the lowest fixed interest rate at 4.5 percent. The Direct Unsubsidized Loan has a 6.8 percent fixed rate, and the Direct Parent PLUS Loan is at a fixed interest rate of 7.9 percent. All of these loans range from 4.5 percent to 15 percent interest.
“Our financial aid office tries to make students aware of scholarship opportunities offered by Ferris and we encourage students to search for scholarships from outside donors by using FastWeb and other web-based scholarship search engines,” said Wencl.
Gallavan said he did receive scholarships and grants during his time at Ferris. However, most of his support was from federal and private loans.
Gallavan said he had one year where he received Federal Pell Grants and scholarships.
“I only had to take $2,000 in private loans that year,” said Gallavan. “As of right now, it is looking like it will be about 20 years before I can pay off my student loans. Now as I get into my career and my pay increases, it can be less.”
Gallavan’s advice to current college students regarding loans is to “find the base pay you can expect to make out of college and factor that in when you start considering loan options.”
Gallavan urges students to apply for every scholarship they can find.
“The more debt you have now can severely limit your opportunities when you graduate,” said Gallavan. “You may not be able to take certain jobs, or move to certain places because financially, it won’t work out.”
He added, “But still, a degree is a must these days. Start early and do everything you can to position yourself for a job before you graduate.” n