As tuition fees continue to rise, IC students are becoming increasingly indebted
After the Ithaca College Board of Trustees increased tuition by 3.25% for the 2022-23 school year, Bianca Sessegolo gave up as a sophomore and decided to transfer to Rutgers University, where she was compared to what she was in Ithaca pays, save money gets college.
“[At Ithaca College], I pay almost exclusively in the form of loans on my behalf or on behalf of my parents,” Sessegolo said. “Especially since I’m a first-generation student going to college, we didn’t know how to do it or how it works, especially in this country … I don’t know anyone who isn’t at least a little concerned about their financials.” Future.”
Tuition and fees account for $46,610 of the college’s annual $65,527 in tuition. While college tuition is $8,425 above average $38,185 Price tag for American private colleges, the problem isn’t just for the college. America is this now the most expensive place to go to collegewith Americans now wearing a collective $1.86 trillion in student debt.
During the 2020 presidential election cycle, candidates Bernie Sanders and Elizabeth Warren popularized the idea cancel federal student loan debt. Then-candidate Joe Biden joined Sanders and Warren in pledging to pay off $50,000 in debt for students from families earning less than $125,000 and $10,000 for all students.
In six figures and three months before graduation, Senior Will Hugonnet reminisces when Biden — his favorite presidential nominee — made this promise during the election campaign. Over a year into his presidency, Biden has still not fulfilled that promise, publicly refusing to cancel the promised amount.
“If you [the Biden administration] can just spend so much money on other things like the military, why can’t they take a little bit and put it back into education funding? said Hugonnet.
The Department of Defense budget is $715 billionwhile the budget is the Ministry of Education $73.5 billion.
According to the Higher Education Act Biden has the ability Cancel student debt by executive order, which would require no action by Congress. Biden has already used his executive powers to extend the pause in student loan repayments that began under former President Donald Trump in response to the economic fallout from the COVID-19 pandemic. Student debt relief could create up to 1.5 million new jobs, reduce unemployment and improve economic opportunity, according to EducationData.org.
“It [student debt] is a big stressor,” said Hugonnet. “I don’t know how else to put it. … Some days you wake up and think about it, but there’s nothing you can do because if you don’t get the money, you can’t go here. It’s kind of a Catch 22 thing where you’re doomed if you do, but you’re doomed if you don’t.
William Kolberg, an associate professor in the Department of Economics, said one of the reasons college costs have risen so much for American students in recent years is because University administrations have increased spending to create new programs, buildings and services that attract potential students. Kolberg said some of these services at the college — such as information technology and the Center for Counseling and Mental Health Services — provide benefits to students but significantly increase spending levels.
A report from the American Council for Trustees and Alumni found that spending on student services at private colleges increased 32% between 2010 and 2018, more than spending on administration and tuition over the same period.
“You look around and you see these other schools that have all this stuff,” Kolberg said. “They worry that the students will go to another school. It’s a bit like an arms race. Every college needs to spice up because they’re worried about the other [colleges] Encouragement.”
While 92% of the college’s students receive some form of financial aid, its endowment — which brings in revenue for the college’s financial aid — is on the decline. A 2021 exam of endowments from U.S. and Canadian institutions by the National Association of College and University Business Officers found that Ithaca College’s endowment grew from $347 million to $337 million between fiscal 2019 and 2020, representing a Loss of 2.91% equivalent. The audit found that other small New York colleges such as Potsdam, Clarkson University and Alfred University had endowment declines ranging from 1% to 5%.
Junior Adam Coe said he could only attend college on scholarships and financial help. He’s had to borrow money every year for the past three years, and he still is share the cost of tuition and accommodation with his parents.
“I’m in debt like most students, luckily I don’t have too much debt,” Coe said. “Without my scholarships and the financial support I received, I could not afford the school.”
The college tuition increase was approved at a Board of Trustees meeting in October 2021. After the meeting, the Board of Trustees gives discharge an intercom post explain the increase.
“These increases, as well as those of recent years, have been conservative within our peer group of schools, while maintaining the investment in the human and capital resources needed to ensure our students are provided the best possible learning environment,” the school said post Office read.
Kolberg said potential solutions to the student debt crisis, aside from debt relief, could include capping interest rates on student loans. Depending on the level of education, the Department of Education student loans have interest rates of 3.73-6.28% at a fixed price. This means that the interest rate on the loan stays the same for the duration of the repayment.
However, some students, like Hugonnet, are required to take out variable-rate personal student loans. This means that the interest rate on the loan can change during repayment. The average interest rate on personal student loans can be anywhere 0.94 – 11.98%, depending on the lending company and the creditworthiness of the borrower. Loans with high risk of repayment are known as subprime loans, which are usually made by private lenders. This can put students with lower credit scores at risk of predatory lending since subprime loans are more difficult to repay.
“You have to be wary of predatory companies that will try to take advantage of this situation,” Kolberg said. “These are the ones who are going to say, ‘Oh, you couldn’t get a loan anywhere else? I can give you a loan.’ Then you look at the interest rate and it’s crazy. Some sort of cap on interest rates needs to be put in place to protect students in what is a pretty scary market.”
Buried deep in college Student Financial Services Website recommends three private student loan companies for students — citizen bank, Discover and Sallie Mae. All three of these companies have reached settlements with the US government after engaging in illegal banking practices such as fraud and predatory lending. Sallie Mae’s loan administration is performed by Navient, one of the most profitable private student loan companies in America. in one Settlement January 2022Navient canceled $1.9 billion in student loans after allegations that the company intentionally made subprime loans to American college students it knew would fail.
Matthew Ford, Navient’s senior corporate communications specialist, said the company denies criminal wrongdoing and has long advocated changing the student loan system.
“We have offered many options for student loan borrowers during the pandemic,” Ford said via email. “Navient recently announced an agreement with a number of Attorneys General to resolve legal matters. We have expressly denied violating any law, including consumer protection laws, or harming borrowers.”
Despite being victims of private student loan companies, most of the college’s students take out loans through the Department of Education’s Loans Department. While Biden has dumped and canceled some outstanding student loans that are owed, students like Hugonnet are buried in both public and private debt upon graduation.
“It’s really stressful,” said Hugonnet. “I don’t like to think about it … I know you can put it off until you work, so I think I have a year before I have to start.” [paying]. But it’s daunting because you leave school and you get a very basic entry-level job that doesn’t pay as much as it is.”
Staff Writer Jadyn Davis contributed to the coverage.