Favorite

When college doesn't pay for itself 

Many former students working steadily at white-collar jobs still can't pay their loans. Should they have settled for a place at McDonald's instead?

click to enlarge Amy Peck "Property of Sallie Mae" T-shirt image
  • Brian Chilson
  • IN DEBT: Disgusted by how much she still owes Sallie Mae on her student loans, Amy Peck designed a "Property of Sallie Mae" T-shirt.

Amy Peck works a lot. Sometimes this makes her angry. Mostly it just makes her tired.

For 12 years, Peck has spearheaded outreach efforts as a salaried employee in Arkansas museums. For the past 14 years, she's been paying back the $13,465 she borrowed to obtain her bachelor's in fine arts degree from Atlanta College of Art.

Each month lender Sallie Mae deducts several hundred dollars from Peck's bank account for a payment that's roughly 30 percent interest. That means only 70 percent is actually applied against her remaining principal of $6,748. To keep up with these payments, she bolsters her $44,250 salary at the Old State House Museum with a part-time retail gig. For the past nine years, she's had to work two or three jobs, sometimes logging 70 hours a week.

Peck, 40, grew up in Louisiana. She attended college in Ohio before transferring the Georgia art college. But economically, Arkansas has suffered the most from her prolonged relationship with top college lender Sallie Mae. "If it weren't for these loans, maybe I'd buy a house. I certainly didn't expect to still be living in an apartment" this far out of college, she laments.

Peck has paid about $28,000 toward the loan of $13,465. She estimates that she has at least $10,000 to go. Her debt-load has stymied her life goals. "Working two jobs impacts my ability to meet people and date," she says. "I can't afford a house or children. I just turned 40, and I literally have no life."

Back in 1990, neither Peck nor her parents understood the policies governing student loans. Peck chose Atlanta College of Art because it seemed more studio-based than art programs at public universities. She and her parents thought they could handle the cost of a private education. "We didn't think we were borrowing extravagantly. We thought of $13,500 as a car note, paid off in five years," she recalls.

But it's not like a car note. Most students don't pay on their loans until after they've graduated, when, in most cases, interest has made the debt much higher than the original loan.

In his spring 2010 study of 199 University of Arkansas students, University of Arkansas human development professor Dr. William Bailey found that students tend to overestimate their financial aptitude. "Most students feel they can handle any sort of debt, but their responses to empirical questions indicate a high degree of financial illiteracy," he said. "There's a conflict between their confidence level and their actual knowledge. This makes sense developmentally because, without this confidence, people wouldn't do things like buy houses or have children."

But he's seen this confidence erode in recent years. "More and more, young adults are delaying these 'normal' behaviors. My junior and seniors are very concerned about the current job market and their future pay scales," he added.

The real cost of spending four to six years pursuing a degree in higher education is much steeper than tuition alone. "At the University of Arkansas, you pay about $80,000 for tuition, books and living," said Bailey. "Then you add opportunity costs to that. Instead of college, you could've worked at McDonalds for $10 an hour. That's another $80,000. So the actual costs are anywhere from $120,000 to $160,000."

According to Bailey, Arkansas's lack of high-paying jobs contributes to a high rate of student loan defaults — at 12.3 percent for public four-year colleges, it's the highest of any state. "Many graduates who stay in Arkansas can't find jobs," he said. "So they can't pay their loans, or they leave, find jobs and exercise their spending power elsewhere. They may have been educated at some cost to Arkansas, but they're buying houses and cars in other states."

Favorite

Comments (26)

Showing 1-25 of 26

Add a comment

 
Subscribe to this thread:
Showing 1-25 of 26

Add a comment

More by Cheree Franco

People who saved…

Readers also liked…

Most Shared

  • World leaders set to meet in Little Rock on resource access and sustainable development

    Next week a series of meetings on the use of technology to tackle global problems will be held in Little Rock by Club de Madrid — a coalition of more than 100 former democratic former presidents and prime ministers from around the world — and the P80 Group, a coalition of large public pension and sovereign wealth funds founded by Prince Charles to combat climate change. The conference will discuss deploying existing technologies to increase access to food, water, energy, clean environment, and medical care.
  • Rapert compares Bill Clinton to Orval Faubus

    Sen. Jason Rapert (R-Conway)  was on "Capitol View" on KARK, Channel 4, this morning, and among other things that will likely inspire you to yell at your computer screen, he said he expects someone in the legislature to file a bill to do ... something about changing the name of the Bill and Hillary Clinton National Airport.
  • Fake news

    So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.
  • Reality TV prez

    There is almost nothing real about "reality TV." All but the dullest viewers understand that the dramatic twists and turns on shows like "The Bachelor" or "Celebrity Apprentice" are scripted in advance. More or less like professional wrestling, Donald Trump's previous claim to fame.

Latest in Cover Stories

Visit Arkansas

View Trumpeter Swans in Heber Springs

View Trumpeter Swans in Heber Springs

Magness Lake, in Heber Springs, is a magnet for swans

Event Calendar

« »

December

S M T W T F S
  1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Most Viewed

  • Arkansas archeologist does his job, is asked to leave

    Amid Department of Arkansas Heritage project.
  • 2017 legislature spreads its wings

    Also, Asa on Trump, schmoozing schedule and more.
  • Tomb to table: A Christmas feast offered by the residents of Mount Holly and other folk.

    A Christmas feast offered by the residents and future residents of Mount Holly and recipes from the Times staff.
  • Dems path forward

    The Arkansas Dems can lead by doing the opposite of what the national Dems did when they reelected the same leadership in charge since the equally embarrassing losses as seen in Arkansas. Electing 75-plus-year-olds is no way to embrace the youth.
  • The sweet hereafter

    This week, the Arkansas Times falls back on that oldest of old chestnuts: a recipe issue. Being who we are, of course, we had to put a twist on that; namely, the fact that most of the recipes you'll find in these pages are courtesy of people who have shuffled off to that great kitchen in the sky, where the Good Lord is always whipping up new things in his toque and apron, running the great mixers of genetics and time, maybe presenting the batter-dipped beaters and bowls to Jesus for a lick down.

Most Recent Comments

 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation