Roughly a decade after the great recession in the late 2000’s, millennials are still feeling the impacts — a lot of them still dealing with student loans.
A federal student aid report in the first quarter of 2018 showed total outstanding federal student loan debt at $1.5 trillion dollars, with 44 and a half million borrowers. Tonight, in a special report, I find out just how much it’s affecting at least one family in the Four States and how colleges are learning to better prepare student borrowers.
“I think it’s one of those things that nobody talks about because it’s kind of embarrassing,” says Adam Berkowicz.
Adam Berkowicz is a high school teacher, husband, and father of two. He’s also one of millions of student loan borrowers impacted by a mountain of education debt.
“I just didn’t know on the front end what I was getting myself into. And now it’s just very large payments every month on top of all the other bills we have to pay, so it’s been kind of a slap in the face,” says Berkowicz.
He didn’t realize at the time that, after a Bachelor’s and a Master’s, it would add up quickly to roughly $50 thousand dollars.
“There’s no disposable income. We try not to go out to eat, there’s no presents outside of Christmas and birthdays,” says Berkowicz.
Financial adviser Jennafer Johnson has plenty of clients in situations just like Adam and she says the decision to take out a student loan can have an impact on someone’s future.
“Their purse strings are basically in a tug-of-war, between what they’ve done in the past and now what they’re trying to do in the future, moving forward, retirement, purchasing homes,” says Jennafer Johnson, Edward Jones Financial Advisor.
So what does she suggest to break that cycle? Make a plan and stick to it.
“You want to keep chipping away for as most as possible. And this is not going to sound fun, but this is what I tell my clients: You lived in college on very little, keep living on very little. I mean, that’s probably the best recommendation I could make,” says Jennafer Johnson.
Not ideal for anyone just beginning their life — but Adam says college felt necessary to pursue the goal of becoming a teacher.
“We’re talking about a family where we have two people with full time jobs, and it’s still difficult to maintain with those student loans attached,” says Adam Berkowicz.
He paid for college 100-percent through student loans.
“I just wish there was a little more financial independence, that you didn’t feel so indebted for something that feels expected,” says Berkowicz.
And he’s not alone.
“We have probably over 50 percent of our students will leave here as a student with some sort of student loan debt,” says Becca Diskin, MSSU Director of Financial Aid.
Becca Diskin with Missouri Southern’s Financial Aid Office sees it all the time.
“You have students who know they need them, there is no avoiding it, they have to have loans to pay for college. We have other students who are really afraid of borrowing,” says Becca Diskin.
As student loan debt has become such a national issue the past several years, the university is taking steps to combat that. The school is in its second year of an experimental program through the Department of Education — the only school in Missouri — where students are counseled yearly through the financial aid office and through peer-to-peer interaction.
“We have other students who are peers, that talk about student loans and help them understand the magnitude of borrowing for 4 years, and how that adds up and what interest looks like,” says Becca Diskin.
But, it’s not the end of the world if you do have student loans.
“Helping students feel comfortable with making the best informed decision for them, is the best thing we can be doing for them. Some students really do have to borrow to get through college,” says Diskin.
“Let’s be honest, debt is debt. It’s easy to get into and it’s not always easy to get out of. But it definitely is a stigma, where if you are able to work with a financial advisor, give you some coaching, that accountability is huge,” says Jennafer Johnson.
“People need to be more upfront about it. It’s an issue that’s solvable, but it’s not solvable if people don’t talk about it,” says Adam Berkowicz.